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

</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-top: 0pt; margin-bottom: 0pt; text-align: center"><b>UNITED STATES</b></p><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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">(Mark one)</p><div>

</div><p style="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:DocumentRegistrationStatement">&#9744;</ix:nonNumeric> REGISTRATION STATEMENT PURSUANT
TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934</p><div>

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

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

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">OR</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="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:DocumentTransitionReport">&#9744;</ix:nonNumeric> TRANSITION REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">OR</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="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:DocumentShellCompanyReport">&#9744;</ix:nonNumeric> SHELL COMPANY REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</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">for the transition period from ____________to ____________</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">Commission file number <ix:nonNumeric contextRef="c0" name="dei:EntityFileNumber">001-38766</ix:nonNumeric></p><div>

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

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

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Jurisdiction of incorporation or organization)</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"><b>c/o MM Future Technology Limited&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><ix:nonNumeric contextRef="c0" name="dei:EntityAddressAddressLine1"><b>Room 2302, 23rd Floor</b></ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><ix:nonNumeric contextRef="c0" name="dei:EntityAddressAddressLine2"><b>FWD Financial Center</b></ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><ix:nonNumeric contextRef="c0" name="dei:EntityAddressAddressLine3"><b>308 Des Voeux Road Central</b></ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b><ix:nonNumeric contextRef="c0" name="dei:EntityAddressCityOrTown">Sheung Wan</ix:nonNumeric>, <ix:nonNumeric contextRef="c0" format="ixt-sec:countrynameen" name="dei:EntityAddressCountry">Hong Kong</ix:nonNumeric></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Tel: +852 36908356</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Address of principal executive offices)</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"><b><ix:nonNumeric contextRef="c1" name="dei:ContactPersonnelName">Xiangdong Wen</ix:nonNumeric>, Chief Executive Officer</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>c/o MM Future Technology Limited</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><ix:nonNumeric contextRef="c1" name="dei:EntityAddressAddressLine1"><b>FWD Financial Center</b></ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><ix:nonNumeric contextRef="c1" name="dei:EntityAddressAddressLine2"><b>308 Des Voeux Road Central</b></ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b><ix:nonNumeric contextRef="c1" name="dei:EntityAddressCityOrTown">Sheung Wan</ix:nonNumeric>, <ix:nonNumeric contextRef="c1" format="ixt-sec:countrynameen" name="dei:EntityAddressCountry">Hong Kong</ix:nonNumeric></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Tel: <ix:nonNumeric contextRef="c1" name="dei:CityAreaCode">+852</ix:nonNumeric> <ix:nonNumeric contextRef="c1" name="dei:LocalPhoneNumber">36908356</ix:nonNumeric></b></p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 25pt">&#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: 34%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Title of each class</span></td> <td style="width: 1%; text-align: center">&#160;</td> <td style="width: 32%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Trading Symbol(s) </span></td> <td style="width: 1%; text-align: center">&#160;</td> <td style="width: 32%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Name of each exchange on which<br/>
registered</span></td></tr> <tr style="vertical-align: top; background-color: #CCEEFF"> <td style="text-align: center"><ix:nonNumeric contextRef="c0" name="dei:Security12bTitle"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Common Shares, par value $0.01</b></span></ix:nonNumeric></td> <td style="text-align: center">&#160;</td> <td style="text-align: center"><ix:nonNumeric contextRef="c0" name="dei:TradingSymbol"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>MTC</b></span></ix:nonNumeric></td> <td>&#160;</td> <td style="text-align: center"><ix:nonNumeric contextRef="c0" format="ixt-sec:exchnameen" name="dei:SecurityExchangeName"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>The NASDAQ Stock Market LLC</b></span></ix:nonNumeric></td></tr> </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;<b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Securities registered or to be registered pursuant
to Section 12(g) of the Act: <b>None.</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">Securities for which there is a reporting obligation
pursuant to Section 15(d) of the Act: <b>None.</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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 13, 2023, the issuer had <ix:nonFraction contextRef="c2" decimals="INF" format="ixt:num-dot-decimal" name="dei:EntityCommonStockSharesOutstanding" scale="0" unitRef="shares">85,145,041</ix:nonFraction></span><span style="font-size: 10pt">&#160; <span style="font-family: Times New Roman, Times, Serif">shares
issued and outstanding.</span></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">Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">Yes &#9744;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<ix:nonNumeric contextRef="c0" name="dei:EntityWellKnownSeasonedIssuer">No</ix:nonNumeric>
&#9746;</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If this report is an annual or transition report,
indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">Yes &#9744;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<ix:nonNumeric contextRef="c0" name="dei:EntityVoluntaryFilers">No</ix:nonNumeric>
&#9746;</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><ix:nonNumeric contextRef="c0" name="dei:EntityCurrentReportingStatus">Yes</ix:nonNumeric> &#9746;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;No
&#9744;</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (&#167;232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><ix:nonNumeric contextRef="c0" name="dei:EntityInteractiveDataCurrent">Yes</ix:nonNumeric> &#9746;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;No
&#9744;</p><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-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: 39%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744; Large Accelerated filer</span></td> <td style="width: 28%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744; Accelerated filer</span></td> <td style="width: 33%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9746; <ix:nonNumeric contextRef="c0" format="ixt-sec:entityfilercategoryen" name="dei:EntityFilerCategory">Non-accelerated filer</ix:nonNumeric></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">Emerging growth company <ix:nonNumeric contextRef="c0" format="ixt:fixed-true" name="dei:EntityEmergingGrowthCompany">&#9746;</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; text-align: justify">If an emerging growth company that prepares its
financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition
period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. <ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:EntityExTransitionPeriod">&#9744;</ix:nonNumeric></p><div>

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

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

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

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

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

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-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: 25%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9746; <span style="-sec-ix-hidden: hidden-fact-0">US GAAP</span></span></td> <td style="width: 2%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744;</span></td> <td style="padding-left: 20pt; width: 53%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">International Financial Reporting Standards as issued by the International Accounting Standards Board</span></td> <td style="width: 20%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744; Other</span></td></tr> </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">&#9744; Item 17&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#9744;
Item 18</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If this is an annual report, indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">Yes &#9744;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;No
<ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:EntityShellCompany">&#9746;</ix:nonNumeric></p><div>

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

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

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

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="text-transform: uppercase"><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="vertical-align: top">
    <td style="width: 10%">&#160;</td>
    <td style="width: 80%; padding-left: 9pt; text-indent: -9pt">&#160;</td>
    <td style="vertical-align: bottom; width: 10%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase"><b>Page</b></span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td><a href="#a_001"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase"><b>PART I</b></span></a></td>
    <td style="padding-left: 9pt; text-indent: -9pt">&#160;</td>
    <td style="vertical-align: bottom; text-align: center">&#160;</td></tr>
  <tr style="vertical-align: top; ">
    <td>&#160;</td>
    <td style="padding-left: 9pt; text-indent: -9pt">&#160;</td>
    <td style="vertical-align: bottom; text-align: center">&#160;</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">ITEM 1.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_002"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1</span></td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">ITEM 2.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_003"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">OFFER STATISTICS AND EXPECTED TIMETABLE</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1</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; text-transform: uppercase">ITEM 3.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_004"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">KEY INFORMATION</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1</span></td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">ITEM 4.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_005"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">INFORMATION ON THE COMPANY</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">29</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; text-transform: uppercase">ITEM 4A.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_006"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">UNRESOLVED STAFF COMMENTS</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">44</span></td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">ITEM 5.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_007"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">OPERATING AND FINANCIAL REVIEW AND PROSPECT </span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">44</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; text-transform: uppercase">ITEM 6.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_008"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES </span></a></td>
    <td style="vertical-align: bottom; text-align: center">55</td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">ITEM 7.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_009"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS </span></a></td>
    <td style="vertical-align: bottom; text-align: center">61</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; text-transform: uppercase">ITEM 8.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_010"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">FINANCIAL INFORMATION</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">62</span></td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">ITEM 9.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_011"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">THE OFFER AND LISTING</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">63</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; text-transform: uppercase">ITEM 10.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_012"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">ADDITIONAL INFORMATION</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">64</span></td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">ITEM 11.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_013"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK</span></a></td>
    <td style="vertical-align: bottom; text-align: center">72</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; text-transform: uppercase">ITEM 12.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_014"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">72</span></td></tr>
  <tr style="vertical-align: top; ">
    <td>&#160;</td>
    <td style="padding-left: 9pt; text-indent: -9pt">&#160;</td>
    <td style="vertical-align: bottom; text-align: center">&#160;</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td><a href="#a_015"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase"><b>PART II</b></span></a></td>
    <td style="padding-left: 9pt; text-indent: -9pt">&#160;</td>
    <td style="text-align: center; vertical-align: bottom">&#160;</td></tr>
  <tr style="vertical-align: top; ">
    <td>&#160;</td>
    <td style="padding-left: 9pt; text-indent: -9pt">&#160;</td>
    <td style="vertical-align: bottom; text-align: center">&#160;</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">ITEM 13.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_016"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">73</span></td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">ITEM 14.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_017"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS</span></a></td>
    <td style="vertical-align: bottom; text-align: center">73</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; text-transform: uppercase">ITEM 15.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_018"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">CONTROLS AND PROCEDURES</span></a></td>
    <td style="vertical-align: bottom; text-align: center">73</td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">ITEM 16.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_019"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">RESERVED</span></a></td>
    <td style="vertical-align: bottom; text-align: center">74</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; text-transform: uppercase">ITEM 16A.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_020"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">AUDIT COMMITTEE FINANCIAL EXPERT. </span></a></td>
    <td style="vertical-align: bottom; text-align: center">74</td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">ITEM 16B.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_021"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">CODE OF ETHICS. </span></a></td>
    <td style="vertical-align: bottom; text-align: center">74</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; text-transform: uppercase">ITEM 16C.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_022"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">PRINCIPAL ACCOUNTANT FEES AND SERVICES.</span></a></td>
    <td style="vertical-align: bottom; text-align: center">74</td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">ITEM 16D.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_023"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.</span></a></td>
    <td style="vertical-align: bottom; text-align: center">75</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; text-transform: uppercase">ITEM 16E.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_032"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.</span></a></td>
    <td style="vertical-align: bottom; text-align: center">75</td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">ITEM 16F.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_024"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">CHANGES IN REGISTRANT&#8217;S CERTIFYING ACCOUNTANT. </span></a></td>
    <td style="vertical-align: bottom; text-align: center">75</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; text-transform: uppercase">ITEM 16G.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_025"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">CORPORATE GOVERNANCE</span></a></td>
    <td style="vertical-align: bottom; text-align: center">75</td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">ITEM 16H.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_026"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">MINE SAFETY DISCLOSURE<i>&#160;</i></span></a></td>
    <td style="vertical-align: bottom; text-align: center">75</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">ITEM 16I.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_027"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">75</span></td></tr>
  <tr style="vertical-align: top; ">
    <td>&#160;</td>
    <td style="padding-left: 9pt; text-indent: -9pt">&#160;</td>
    <td style="vertical-align: bottom; text-align: center">&#160;</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td><a href="#a_028"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase"><b>PART III</b></span></a></td>
    <td style="padding-left: 9pt; text-indent: -9pt">&#160;</td>
    <td style="vertical-align: bottom; text-align: center">&#160;</td></tr>
  <tr style="vertical-align: top; ">
    <td>&#160;</td>
    <td style="padding-left: 9pt; text-indent: -9pt">&#160;</td>
    <td style="vertical-align: bottom; text-align: center">&#160;</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">ITEM 17.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_029"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">FINANCIAL STATEMENTS</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">76</span></td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">ITEM 18.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_030"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">FINANCIAL STATEMENTS</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">76</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; text-transform: uppercase">ITEM 19.</span></td>
    <td style="padding-left: 9pt; text-indent: -9pt"><a href="#a_031"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase">EXHIBITS</span></a></td>
    <td style="vertical-align: bottom; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">76</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: center"></p><div>

</div><!-- Field: Page; Sequence: 2; Options: NewSection; Value: 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"><!-- Field: Sequence; Type: LowerRoman; Name: PageNo -->i<!-- 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>CERTAIN INFORMATION</b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Unless otherwise indicated,
numerical figures included in this Annual Report on Form 20-F (the &#8220;Annual Report&#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.</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">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.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Except where the context otherwise requires and
for purposes of this Annual Report only:</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Depending on the context,
the terms &#8220;we,&#8221; &#8220;us,&#8221; &#8220;our company,&#8221; and &#8220;our&#8221; refer to MMTEC, INC., a BVI company, and
its consolidated subsidiaries:</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify"><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">MM Future Technology Ltd. (&#8220;MM Future&#8221;), a Hong Kong incorporated limited company.</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <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">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><span style="font-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">&#8220;common shares&#8221; refer to our common shares, $0.01 par value per share,</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <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">all references to &#8220;RMB,&#8221; &#8220;yuan&#8221; and &#8220;Renminbi&#8221; are to the legal currency of China, and all references to &#8220;USD,&#8221; &#8220;$&#8221;, and &#8220;U.S. dollars&#8221; are to the legal currency of the United States.</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">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</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: 3; Value: 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"><!-- Field: Sequence; Type: LowerRoman; Name: PageNo -->ii<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This Annual Report contains
&#8220;forward-looking statements&#8221; that represent our beliefs, projections and predictions about future events. All statements other
than statements of historical fact are &#8220;forward-looking statements&#8221; including any projections of earnings, revenue or other
financial items, any statements of the plans, strategies and objectives of management for future operations, any statements concerning
proposed new projects or other developments, any statements regarding future economic conditions or performance, any statements of management&#8217;s
beliefs, goals, strategies, intentions and objectives, and any statements of assumptions underlying any of the foregoing. Words such as
&#8220;may&#8221;, &#8220;will&#8221;, &#8220;should&#8221;, &#8220;could&#8221;, &#8220;would&#8221;, &#8220;predicts&#8221;, &#8220;potential&#8221;,
&#8220;continue&#8221;, &#8220;expects&#8221;, &#8220;anticipates&#8221;, &#8220;future&#8221;, &#8220;intends&#8221;, &#8220;plans&#8221;,
&#8220;believes&#8221;, &#8220;estimates&#8221; and similar expressions, as well as statements in the future tense, identify forward-looking
statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-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">These statements are necessarily
subjective and involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance
or achievements, or industry results, to differ materially from any future results, performance or achievements described in or implied
by such statements. Actual results may differ materially from expected results described in our forward-looking statements, including
with respect to correct measurement and identification of factors affecting our business or the extent of their likely impact, the accuracy
and completeness of the publicly available information with respect to the factors upon which our business strategy is based on the success
of our business.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Forward-looking statements
should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of whether, or the
times by which, our performance or results may be achieved. Forward-looking statements are based on information available at the time
those statements are made and management&#8217;s belief as of that time with respect to future events and are subject to risks and uncertainties
that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements.
Important factors that could cause such differences include, but are not limited to, those factors discussed under the headings &#8220;Risk
Factors&#8221;, &#8220;Operating and Financial Review and Prospects,&#8221; &#8220;Information on the Company&#8221; and elsewhere in
this Annual Report.</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">This Annual Report should
be read in conjunction with our audited financial statements and the accompanying notes thereto, which are included in Item 18 of this
Annual Report.</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: center"></p><div>

</div><!-- Field: Page; Sequence: 4; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="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: center">&#160;</p><div>

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

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

</div><div><a id="a_002"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS</b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not required.</p><div>

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

</div><div><a id="a_003"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE</b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not required.</p><div>

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

</div><div><a id="a_004"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 3. KEY INFORMATION</b></p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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"><b>A.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>[Reserved]</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b>&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Capitalization and Indebtedness</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not required.</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Reasons for the Offer and Use of Proceeds</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not required.</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Risk factors</b></span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b></p><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Risks Related to Our Business and Industry</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><i>We have incurred substantial losses in recent
periods and may incur losses in the future.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have incurred substantial
losses in several recent periods as we have sought to expand our operations. We recorded net losses of $5,645,376, $7,050,755 and $3,181,596
for the years ended December 31, 2022, 2021 and 2020, respectively. We may incur losses in future periods. If our future revenues do not
increase sufficiently, or even if our future revenues increase but we are unable to manage our expenses, we may not achieve and maintain
profitability in the future periods.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our ability to protect the confidential
information of our users may be adversely affected by cyber-attacks, computer viruses, physical or electronic break-ins or similar disruptions.
</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our platform processes certain
personal and other sensitive data from our users, which makes it an attractive target and potentially vulnerable to cyber-attacks, computer
viruses, physical or electronic break-ins or similar disruptions. While we have taken steps to protect the confidential information that
we have access to, our security measures could be breached. Because techniques used to sabotage or obtain unauthorized access to systems
change frequently and generally are not recognized until they are launched against a target, we may be unable to anticipate these techniques
or to implement adequate preventative measures. Any accidental or willful security breaches or other unauthorized access to our platform
could cause confidential user information to be stolen and used for criminal purposes. Security breaches or unauthorized access to confidential
information could also expose us to liability related to the loss of the information, time-consuming and expensive litigation and negative
publicity. If security measures are breached because of third-party action, employee error, malfeasance or otherwise, or if design flaws
in our technology infrastructure are exposed and exploited, our relationships with borrowers and investors could be severely damaged,
we could incur significant liability and our business and operations could be adversely affected. In addition, we expect the secure transmission
of confidential information over public networks to be a critical element of our operations. Our networks, those of our third-party service
vendors, and associated clearing corporations, and our customers may be vulnerable to unauthorized access, computer viruses and other
security problems. Persons who circumvent security measures could wrongfully use our information or cause interruptions or malfunctions
in our operations, which could make our customers hesitant to use our electronic marketplaces. We may be required to expend significant
resources to protect against the threat of security breaches or to alleviate problems, including reputational harm and litigation, caused
by any breaches.</p><div>

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

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

</div><!-- Field: Page; Sequence: 5; 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"><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may pursue strategic alliances, acquisitions
or joint ventures, which could present unforeseen integration obstacles.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">These acquisitions may be
necessary in order for us to enter into or develop new product areas. Strategic alliances, acquisitions, joint ventures involve a number
of risks and present financial, managerial and operational challenges, including:</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify"><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">&#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; text-align: justify">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify"><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">&#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; text-align: justify">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As a result of these risks
and challenges, we may not realize any anticipated benefits from strategic alliances, acquisitions or joint ventures, and such strategic
alliances, acquisitions or joint ventures may in fact materially adversely affect our business, financial condition and results of operations.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If we are unable to continue to identify
and exploit new market opportunities, our future revenues may decline and as a result our business, financial condition and results of
operations could be materially adversely affected.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As more participants enter
our markets, the resulting competition often leads to lower commissions. This may result in a decrease in future revenues in a particular
market even if the volume of trades we handle in that market increases. We may not be able to attract new customers or successfully enter
new markets. If we are unable to continue to identify and exploit new market opportunities on a timely and cost-effective basis, our future
revenues may decline and as a result our business, financial condition and results of operations could be materially adversely affected.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our ability to retain our key employees
and the ability of certain key employees to devote adequate time to us is critical to the success of our business, and failure to do so
may adversely affect our future revenues and as a result could materially adversely affect our business, financial condition and results
of operations.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our people are our most important
resource and our success depends on the efforts and talent of our employees, including risk management, software engineering, financial
and marketing personnel. We must retain the services of our key employees and strategically recruit and hire new talented employees to
obtain customer transactions that generate substantially all our revenues. If any of our key employees, including Xiangdong Wen and Min
Kong, were to join an existing competitor, form a competing company, or otherwise leave us, some of our customers could choose to use
the services of that competitor or another competitor instead of our services, which could adversely affect our future revenues and as
a result could materially adversely affect our business, financial condition and results of operations. Our future success depends on
our continued ability to attract, develop, motivate and retain qualified and skilled employees. Competition for highly skilled technical,
risk management and financial personnel is extremely intense. We may not be able to hire and retain these personnel at compensation levels
consistent with our existing compensation and salary structure. Some of the companies with which we compete for experienced employees
have greater resources than we have and may be able to offer more attractive terms of employment. In addition, we invest significant time
and expenses in training our employees, which increases their value to competitors who may seek to recruit them. If we fail to retain
our employees, we could incur significant expenses in hiring and training their replacements, and the quality of our services and our
ability to serve borrowers and investors could diminish, resulting in a material adverse effect to our business.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Difficult market conditions, economic conditions
and geopolitical uncertainties could adversely affect our business in many ways by negatively impacting our future revenues in the financial
markets in which we offer services, which could have a material adverse effect on our business, financial condition and results of operations.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Difficult market conditions,
economic conditions and geopolitical uncertainties have in the past adversely affected and may in the future adversely affect our business
and profitability. Our business and financial services industry in general are directly affected by national and international economic
and political conditions, broad trends in business and finance, the level and volatility of interest rates, changes in and uncertainty
regarding tax laws and substantial fluctuations in the volume and price levels of securities transactions. The financial markets and the
global financial services business are, by their nature, risky and volatile and are directly affected by many national and international
factors that are beyond our control. Any one of these factors may cause a substantial decline in the U.S. and global financial services
markets, resulting in reduced trading volume. These events could have a material adverse effect on our results and profitability. These
factors include:</p><div>

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

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, any prolonged
slowdown in the Chinese or global economy may have a negative impact on our business, results of operations and financial condition. Economic
conditions in China are sensitive to global economic conditions. The global financial markets have experienced significant disruptions
since 2008 and the United States, Europe and other economies have experienced periods of recession. The recovery from the lows of 2008
and 2009 has been uneven and there are new challenges, including the escalation of the European sovereign debt crisis from 2011 and the
slowdown of China&#8217;s economic growth since 2012 which may continue. There is considerable uncertainty over the long-term effects
of the expansionary monetary and fiscal policies adopted by the central banks and financial authorities of some of the world&#8217;s leading
economies, including the United States and China. There have also been concerns about the economic effect of the tensions in the relationship
between China and surrounding Asian countries. Adverse economic conditions could have negative adverse effects on our business and financial
conditions. Additionally, continued turbulence in the international markets may adversely affect our ability to access the capital markets
to meet liquidity needs.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Employee misconduct or error could harm
us by impairing our ability to attract and retain customers and subjecting us to significant legal liability and reputational harm; moreover,
this type of misconduct is difficult to detect and deter and error is difficult to prevent.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Employee misconduct or error
could subject us to financial losses and regulatory sanctions and could seriously harm our reputation and negatively affect our business.
It is not always possible to deter employee misconduct, and the precautions taken to prevent and detect employee misconduct may not always
be effective. Misconduct by employees could include engaging in improper or unauthorized transactions or activities, failing to properly
supervise other employees, or improperly using confidential information. Employee errors, including mistakes in executing, recording or
processing transactions for customers, could cause us to enter into transactions that customers may disavow and refuse to settle, which
could expose us to the risk of material losses even if the errors are detected and the transactions are unwound or reversed. If our customers
are not able to settle their transactions on a timely basis, the time in which employee errors are detected may be increased and our risk
of material loss could be increased. The risk of employee error or miscommunication may be greater for products that are new or have non-standardized
terms. It is not always possible to deter employee misconduct or error, and the precautions we take to detect and prevent this activity
may not be effective in all cases.</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"><b><i>Financial services firms are highly regulated,
and the increased regulatory scrutiny over the last several years may increase the risk of financial liability and reputational harm resulting
from adverse regulatory actions</i></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; text-indent: 0.5in">In April 2019, the Company
acquired the remaining 75.1% of outstanding securities of MMBD Trading Ltd., a British Virgin Islands company (&#8220;MMBD&#8221;). The
acquisition closed on October 18, 2019, following the receipt by the Company of requisite corporate and regulatory approvals, including,
without limitation, FINRA CMA application approval, and the Company&#8217;s Audit Committee&#8217;s review and approval of the terms and
provisions of this transaction involving related parties. Following and as a result of this acquisition, MMBD has become a wholly-owned
subsidiary of the Company. In March 23, 2020, the Company acquired all outstanding securities of MMBD Investment Advisory Company Limited
(&#8220;MMBD Advisory&#8221;) for a consideration of $1,000. Prior to this transaction, all outstanding securities of MMBD Advisory were
owned by Hinman Au, a director, and 1.7% shareholder of the Company. MMBD Advisory was formed in January 2018 in the U.S. and is registered
as an investment advisor firm under the laws of the State of New York on May 7, 2018. Over the last several years, financial services
firms have been operating in an evolving regulatory environment. The industry has experienced an extended period of significant change
in laws and regulations governing the financial services industry, as well as increased scrutiny from various regulators. Penalties and
fines imposed by regulatory authorities have increased substantially in recent years. We may be adversely affected by changes in the interpretation
or enforcement of existing laws, rules, and regulations. There is also increased regulatory scrutiny (and related compliance costs) as
we continue to grow and surpass certain consolidated asset thresholds established under the Dodd-Frank Act, which have the effect of imposing
enhanced standards and requirements on larger institutions. Broker-dealers and investment advisers are subject to regulations covering
all aspects of the securities business, including, but not limited to: sales and trading methods; trade practices among broker-dealers;
use and safekeeping of clients&#8217; funds and securities; capital structure of securities firms; anti-money laundering efforts; recordkeeping;
and the conduct of directors, officers and employees. Any violation of these laws or regulations could subject us to the following events,
any of which could have a material adverse effect on our business, financial condition and prospects: civil and criminal liability; sanctions,
which could include the revocation of our subsidiaries&#8217; registrations as investment advisers or broker-dealers; the revocation of
the licenses of our financial advisors; censures; fines; or a temporary suspension or permanent bar from conducting business. Failure
to comply with regulatory capital requirements primarily applicable to our company, our bank subsidiaries, or our broker-dealer subsidiaries
would significantly harm our business.</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><i>Growth of our business could increase costs
and regulatory and integration risks</i></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; text-indent: 0.5in">Integrating acquired businesses,
providing a platform for new businesses, and partnering with other firms involve risks and present financial, managerial, and operational
challenges. We may incur significant expense in connection with expanding our existing businesses, recruiting financial advisors, or making
strategic acquisitions or investments. Our overall profitability would be negatively affected if investments and expenses associated with
such growth are not matched or exceeded by the revenues derived from such investments or growth. Expansion may also create a need for
additional compliance, documentation, risk management, and internal control procedures, and often involves hiring additional personnel
to address these procedures. To the extent such procedures are not adequate or not adhered to with respect to our expanded business or
any new business, we could be exposed to a material loss or regulatory sanction. Financial services firms are subject to numerous actual
or perceived conflicts of interest, which are routinely examined by U.S. federal and state regulators and SROs such as FINRA. Our risk
management processes include addressing potential conflicts of interest that arise in our business. Management of potential conflicts
of interest has become increasingly complex as we expand our business activities. A perceived or actual failure to address conflicts of
interest adequately could affect our reputation, the willingness of clients to transact business with us or give rise to litigation or
regulatory actions. Therefore, there can be no assurance that conflicts of interest will not arise in the future that could cause result
in material harm to our business and financial condition.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We are generally subject to risks inherent
in doing business in the financial markets, and any failure to develop effective compliance and reporting systems could result in regulatory
penalties in the applicable jurisdiction and our business could be adversely affected.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There are certain additional
political, economic, legal, regulatory, operational and other risks inherent in doing business in international financial markets. These
risks include:</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify"><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">less developed automation in exchanges, depositories and national clearing systems,</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify"><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">&#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: 8; 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; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify"><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">the impact of the laws and regulations of foreign governmental and regulatory authorities of each country in which we conduct business,</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><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; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify"><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">possible nationalization, expropriation and regulatory, political and price controls,</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><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; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify"><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">difficulties in staffing and managing international operations,</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><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; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify"><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">capital controls and other restrictive governmental actions,</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><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; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify"><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">any failure to develop effective compliance and reporting systems, which could result in regulatory penalties in the applicable jurisdiction,</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><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; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify"><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">fluctuations in currency exchange rates,</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><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; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify"><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">reduced protections for intellectual property rights,</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><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; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify"><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">adverse labor laws,</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><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; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify"><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">outbreak of hostilities, and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify"><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">potentially adverse tax consequences arising from compliance with foreign laws and regulations to which our international subsidiaries are subject.</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; text-indent: 0.5in">In many countries, the laws
and regulations applicable to the securities and financial services industries are uncertain and evolving, and it may be difficult for
us to determine the exact requirements of local laws in every market. Our inability to remain in compliance with local laws and regulations
in a particular foreign market could have a significant and negative effect not only on our businesses in that market but also on our
reputation generally. If we are unable to manage any of these risks effectively, our business could be adversely affected.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If the value of the U.S. dollar against
RMB in which we pay expenses continues to decline or if the value of the U.S. dollar against RMB in which we earn revenues improves dramatically,
our financial results could suffer.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Significant exchange rate
fluctuations can impact our results. Significant movements in the U.S. dollar against RMB, in which we pay expenses or earn profits may
have an adverse effect on our financial results. Potential movements in the U.S. dollar against RMB in which we earn revenues could also
adversely affect our financial results.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may not be able to obtain additional
financing, if needed, on terms that are acceptable, which could prevent us from developing or enhancing our business, taking advantage
of future opportunities or responding to competitive pressure or unanticipated requirements.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our business is dependent
upon the availability of adequate funding and sufficient capital. If for any reason we need to raise additional funds, we may not be able
to obtain additional financing when needed. If we cannot raise additional funds on acceptable terms, we may not be able to develop or
enhance our business, take advantage of future opportunities or respond to competitive pressure or unanticipated requirements.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may not be able to protect our intellectual
property rights or may be prevented from using intellectual property necessary for our business.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our success is dependent,
in part, upon our intellectual property. We generally rely primarily on trade secret, contract, copyright and trademark laws to establish
and protect our rights to our proprietary technology, methods and products. It is possible that third parties may copy or otherwise obtain
and use our proprietary technology without authorization or otherwise infringe on our rights. We cannot assure you that any of the rights
granted under any patent, copyright or trademark that we may obtain will protect our competitive advantages. In addition, the laws of
some foreign countries may not protect our proprietary rights to the same extent as the laws in the U.S. We may also face claims of infringement
that could interfere with our ability to use technology that is material to our business operations. This may limit the comprehensiveness
and quality of the data we are able to distribute or sell. In the future, we may have to rely on litigation to enforce our intellectual
property rights, protect our trade secrets, determine the validity and scope of the proprietary rights of others or defend against claims
of infringement or invalidity. Any such claims or litigation, whether successful or unsuccessful, could result in substantial costs and
the diversion of resources and the attention of management, any of which could negatively affect our business. Responding to these claims
could also require us to enter into royalty or licensing agreements with the third parties claiming infringement. Such royalty or licensing
agreements, if available, may not be available on terms acceptable to us.</p><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We may experience technology failures while
developing and enhancing our software.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In order to maintain our competitive
advantage, our software is under continuous development. There is risk that software failures may occur and result in service interruptions
and have other unintended consequences, which could have a material adverse effect on our business, financial condition and results of
operations<b>.</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><i>Our operations depend on the performance
of the Internet infrastructure and fixed telecommunications networks in China. </i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Almost all access to the Internet
in China is maintained through state-owned telecommunication operators under the administrative control and regulatory supervision of
the Ministry of Industry and Information Technology, or the MIIT. We primarily rely on a limited number of telecommunication service providers
to provide us with data communications capacity through local telecommunications lines and Internet data centers to host our servers.
We have limited access to alternative networks or services in the event of disruptions, failures or other problems with China&#8217;s
Internet infrastructure or the fixed telecommunications networks provided by telecommunication service providers. With the expansion of
our business, we may be required to upgrade our technology and infrastructure to keep up with the increasing traffic on our platform.
We cannot assure you that the Internet infrastructure and the fixed telecommunications networks in China will be able to support the demands
associated with the continued growth in Internet usage. In addition, we have no control over the costs of the services provided by telecommunication
service providers. If the prices we pay for telecommunications and Internet services rise significantly, our results of operations may
be adversely affected. Furthermore, if Internet access fees or other charges to Internet users increase, our user traffic may decline,
and our business may be harmed.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Any significant disruption in service on
our platform or in our computer systems, including events beyond our control, could prevent us from processing or posting transactions
on our platform, reduce the attractiveness of our platform and result in a loss of borrowers or investors. </i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the event of a platform
outage and physical data loss, our ability to perform our servicing obligations, process applications or make trades available on our
platform would be materially and adversely affected. The satisfactory performance, reliability and availability of our platform and our
underlying network infrastructure are critical to our operations, customer service, reputation and our ability to retain existing and
attract new borrowers and investors. Our operations depend on our ability to protect our systems against damage or interruption from natural
disasters, power or telecommunications failures, air quality issues, environmental conditions, computer viruses or attempts to harm our
systems, criminal acts and similar events. If there is a lapse in service or damage to our facilities, we could experience interruptions
in our service as well as delays and additional expense in arranging new facilities. Any interruptions or delays in our service, whether
as a result of third-party error, our error, natural disasters or security breaches, whether accidental or willful, could harm our relationships
with our borrowers and investors and our reputation. Additionally, in the event of damage or interruption, our insurance policies currently
in place may not adequately compensate us for any losses that we may incur.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our platform and internal systems rely on
software that is highly technical, and if it contains undetected errors, our business could be adversely affected. </i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our platform and internal
systems rely on software that is highly technical and complex. In addition, our platform and internal systems depend on the ability of
such software to store, retrieve, process and manage immense amounts of data. The software on which we rely has contained, and may now
or in the future contain, undetected errors or bugs. Some errors may only be discovered after the code has been released for external
or internal use. Errors or other design defects within the software on which we rely may result in a negative experience for our users,
delay introductions of new features or enhancements, result in errors or compromise our ability to protect user data or our intellectual
property. Any errors, bugs or defects discovered in the software on which we rely could result in harm to our reputation, loss of user
or liability for damages, any of which could adversely affect our business, results of operations and financial conditions.</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><i>The financial markets in which we operate
are generally affected by seasonality which could have a material adverse effect on our financial performance in a given period.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Traditionally, the financial
markets around the world experience lower volume during the summer and at the end of the year due to a general slowdown in the business
environment and, therefore, our transaction volume levels may decrease during those periods. The timing of the holidays also affects transaction
volume. These factors could have a material adverse effect on our financial performance in a given period.</p><div>

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

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We operate in a rapidly evolving business
environment. If we are unable to adapt our business effectively to keep pace with these changes, our ability to succeed will be adversely
affected, which could have a material adverse effect on our business, financial condition and results of operations.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The pace of change in our
industry is extremely rapid. Operating in such a rapidly changing business environment involves a high degree of risk. Our ability to
succeed will depend on our ability to adapt effectively to these changing market conditions. If we are unable to keep up with rapid technological
changes, we may not be able to compete effectively. To remain competitive, we must continue to enhance and improve the responsiveness,
functionality, accessibility and features of our proprietary software, network distribution systems and technologies. Our business environment
is characterized by rapid technological changes, changes in use and customer requirements and preferences, frequent product and service
introductions embodying new technologies and the emergence of new industry standards and practices that could render our existing proprietary
technology and systems obsolete. Our success will depend, in part, on our ability to:</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify"><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">develop, license and defend intellectual property useful in our business,</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify"><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">enhance our existing services,</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify"><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">develop new services and technologies that address the increasingly sophisticated and varied needs of our prospective customers,</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify"><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">respond to technological advances and emerging industry standards and practices on a cost-effective and timely basis,</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We cannot assure you that
we will be able to respond in a timely manner to changing market conditions or customer requirements. The development of proprietary electronic
trading technology entails significant technical, financial and business risks. Further, the adoption of new Internet, networking or telecommunications
technologies may require us to devote substantial resources to modify, adapt and defend our technology. We cannot assure you that we will
successfully implement new technologies or adapt our proprietary technology and transaction-processing systems to customer requirements
or emerging industry standards, or that we will be able to successfully defend any challenges to any technology we develop. Any failure
on our part to anticipate or respond adequately to technological advancements, customer requirements or changing industry standards, or
any significant delays in the development, introduction or availability of new services, products or enhancements, could have a material
adverse effect on our business, financial condition and results of operations.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Lack of liquidity or access to capital could
impair our business and financial condition.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Liquidity, or ready access
to funds, is essential to our business. We expend significant resources investing in our business, particularly with respect to our technology
and service platforms. As a result, reduced levels of liquidity could have a significant negative effect on us. Some potential conditions
that could negatively affect our liquidity include:</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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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">
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    <td style="width: 48px; text-align: justify">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The capital and credit markets
continue to experience varying degrees of volatility and disruption. In some cases, the markets have exerted downward pressure on availability
of liquidity and credit capacity for businesses similar to ours. Without sufficient liquidity, we could be required to limit or curtail
our operations or growth plans, and our business would suffer. Notwithstanding the self-funding nature of our operations, we may sometimes
be required to fund timing differences arising from the delayed receipt of client funds associated with the settlement of client transactions
in securities markets. These timing differences are funded either with internally generated cash flow or, if needed, with funds drawn
under our revolving credit facility. We may also need access to capital in connection with the growth of our business, through acquisitions
or otherwise. In the event current resources are insufficient to satisfy our needs, we may need to rely on financing sources such as bank
debt. The availability of additional financing will depend on a variety of factors such as:</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the general availability of credit,</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify"><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">the overall availability of credit to the financial services industry,</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><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; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify"><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">our credit ratings and credit capacity, and</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><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; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify"><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">the possibility that our lenders could develop a negative perception of our long- or short-term financial prospects is a result of industry- or company-specific considerations. Similarly, our access to funds may be impaired if regulatory authorities or rating organizations take negative actions against us.</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Disruptions, uncertainty or
volatility in the capital and credit markets may also limit our access to capital required to operate our business. Such market conditions
may limit our ability to satisfy statutory capital requirements, generate commission, fee and other market-related revenue to meet liquidity
needs and access the capital necessary to grow our business. As such, we may be forced to delay raising capital, issue different types
of capital than we would otherwise, less effectively deploy such capital, or bear an unattractive cost of capital, which could decrease
our profitability and significantly reduce our financial flexibility.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our business could be materially adversely
affected as a result of the risks associated with acquisitions and investments.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We may pursue further acquisitions
and investments in the future. These transactions are accompanied by risks. For instance, an acquisition could have a negative effect
on our financial and strategic position and reputation or the acquired business could fail to further our strategic goals. Moreover, we
may not be able to successfully integrate acquired businesses into ours, and therefore we may not be able to realize the intended benefits
from an acquisition. We may have a lack of experience in new markets, products or technologies brought on by the acquisition and we may
have an initial dependence on unfamiliar supply or distribution partners. An acquisition may create an impairment of relationships with
customers or suppliers of the acquired business or our advisors or suppliers. All of these and other potential risks may serve as a diversion
of our management&#8217;s attention from other business concerns, and any of these factors could have a material adverse effect on our
business.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We operate in an intensely competitive industry,
which could cause us to lose advisors and their assets.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Many of our competitors have
substantially greater resources than we do and may offer a broader range of products and services across more markets. Some operate in
a different regulatory environment than we do, which may give them certain competitive advantages in the services they offer. For example,
certain of our competitors only provide clearing services and consequently would not have any supervision or oversight liability relating
to actions of their financial advisors. We believe that competition within our industry will intensify as a result of consolidation and
acquisition activity and because new competitors face few barriers to entry, which could adversely affect our ability to recruit new advisors
and retain existing advisors. If current or potential clients decide to use our competitors, we could face a significant decline in market
share, future fee revenues and future net income.</p><div>

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

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

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

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We cannot be certain that
our operations or any aspects of our business do not or will not infringe upon or otherwise violate trademarks, patents, copyrights, know-how
or other intellectual property rights held by third parties. We may be from time to time in the future subject to legal proceedings and
claims relating to the intellectual property rights of others. In addition, there may be third-party trademarks, patents, copyrights,
know-how or other intellectual property rights that are infringed by our products, services or other aspects of our business without our
awareness. Holders of such intellectual property rights may seek to enforce such intellectual property rights against us in China, the
United States or other jurisdictions. If any third-party infringement claims are brought against us, we may be forced to divert management&#8217;s
time and other resources from our business and operations to defend against these claims, regardless of their merits. Additionally, the
application and interpretation of China&#8217;s intellectual property right laws and the procedures and standards for granting trademarks,
patents, copyrights, know-how or other intellectual property rights in China are still evolving and are uncertain, and we cannot assure
you that PRC courts or regulatory authorities would agree with our analysis. If we were found to have violated the intellectual property
rights of others, we may be subject to liability for our infringement activities or may be prohibited from using such intellectual property,
and we may incur licensing fees or be forced to develop alternatives of our own. As a result, our business and results of operations may
be materially and adversely affected.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The economy in China has experienced
increases in inflation and labor costs in recent years. As a result, average wages in the PRC are expected to continue to increase. In
addition, we are required by PRC laws and regulations to pay various statutory employee benefits, including pension, housing fund, medical
insurance, work-related injury insurance, unemployment insurance and maternity insurance to designated government agencies for the benefit
of our employees. The relevant government agencies may examine whether an employer has made adequate payments to the statutory employee
benefits, and those employers who fail to make adequate payments may be subject to late payment fees, fines and/or other penalties. We
expect that our labor costs, including wages and employee benefits, will continue to increase. Unless we are able to control our labor
costs or pass on these increased labor costs to our users by increasing the fees of our services, our financial condition and results
of operations may be adversely affected.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The laws and regulations governing the financial
industry in China are developing and evolving rapidly. If any of our business practices is deemed to violate any PRC laws or regulations,
our business, financial condition and results of operations would be materially and adversely affected.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Due to the relatively short
history of the finance industry in China, the PRC government has yet to establish a comprehensive regulatory framework governing our industry.
To comply with existing laws, regulations, rules and governmental policies relating to the online finance industry, we have implemented
various policies and procedures to conduct our business and operations. However, due to the lack of detailed rules and the fact that the
relevant laws, regulations and rules are expected to continue to evolve, we cannot be certain that our existing practices would not be
deemed to violate any existing or future rules, laws and regulations. As of the date of this report, we have never been subject to any
material fines or other penalties under any PRC laws or regulations, including those governing our industry in China. However, to the
extent that we are not able to fully comply with any existing or new regulations when they are promulgated, our business, financial condition
and results of operations may be materially and adversely affected. We are unable to predict with certainty the impact, if any, that future
legislation, judicial precedents or regulations relating to the online consumer finance industry will have on our business, financial
condition and results of operations. Furthermore, the growth in the popularity of online consumer finance increases the likelihood that
the PRC government will seek to further regulate this industry.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our operations may be adversely affected
by international communication failures, which may affect trade executions and data updates.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Any significant disruption
in service on our platforms, our computer systems or third-party service providers&#8217; systems, including events beyond our control,
could reduce the attractiveness of our platforms and result in a loss of customers or investors. In the event of a platform outage and
physical data loss, our ability to perform our servicing obligations, and process loan applications would be materially and adversely
affected. The satisfactory performance, reliability and availability of our platforms and our underlying network infrastructure are critical
to our operations, customer service, reputation, and ability to retain existing and attract new customers, investors and institutional
funding partners. Our operations depend on our ability to protect our systems against damage or interruption from natural disasters, power
or telecommunications failures, air quality issues, environmental conditions, computer viruses, or attempts to harm our systems, criminal
acts and similar events. Any interruptions or delays in our service, whether as a result of third-party or our error, natural disasters
or security breaches, whether accidental or willful, could harm our relationships with our customers, investors and institutional funding
partners and our reputation. Our disaster recovery plan has not been tested under actual disaster conditions, and we may not have sufficient
capacity to recover all data and services in the event of an outage. These factors could prevent us from processing loans, damage our
brand and reputation, divert our employees&#8217; attention, subject us to liability and cause customers, investors and institutional
funding partners to abandon our platforms, any of which could adversely affect our business, financial condition and results of operations.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our platforms and internal systems rely
on software that is highly technical, and if it contains undetected errors, our business could be adversely affected. </i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our platforms and internal
systems rely on software that is highly technical and complex. In addition, our platform and internal systems depend on the ability of
such software to store, retrieve, process and manage immense amounts of data. The software on which we rely has contained, and may now
or in the future contain, undetected errors or bugs. Errors or other design defects within the software on which we rely may result in
a negative experience for customers and funding sources, delay introductions of new features or enhancements, result in errors or compromise
our ability to protect customer or investor data or our intellectual property. Any errors, bugs or defects discovered in the software
on which we rely could result in harm to our reputation, loss of customers or investors or liability for damages, any of which could adversely
affect our business, results of operations and financial condition.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Uncertainties relating to the growth and
profitability of the e-commerce industry in China could adversely affect our operating revenue and business prospects. </i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our future results of operations
will depend on numerous factors affecting the development of the e-commerce industry in China, which may be beyond our control. These
factors include:</p><div>

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

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the level of trust and confidence of Chinese consumers in online trading, as well as changes in investor demographics and investor tastes and preferences,</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><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; text-align: justify">&#160;</td>
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">whether alternative lending channels or business models that better address the needs of investor emerge in China, and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">the development of fulfillment, payment and other ancillary services associated with online purchases. </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; text-indent: 0.5in">Unfavorable developments in
domestic and international politics, including military conflicts, political turmoil and social instability, may also adversely affect
investor confidence and reduce investments, which could in turn materially and adversely affect our growth and profitability.</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><i>Any negative publicity or investor complaints
with respect to us, investor and our service providers may materially and adversely affect our business and results of operations. </i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The reputation of our brands
is critical to our business and competitiveness. Any malicious or negative publicity or any publicized incidents in connection with the
use of our services, whether or not we are negligent or at fault, including but not limited to those relating to our management, business,
compliance with the law, financial conditions or prospects, whether with or without merit, could severely compromise our reputation and
harm our business and operating results.</p><div>

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

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

</div><!-- Field: Page; Sequence: 14; 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; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As China&#8217;s online investing
industry is new and the regulatory framework for this industry is also evolving, negative publicity about this industry and the market
segment in which we operate may arise from time to time. Negative publicity about China&#8217;s online investing industry in general may
also have a negative impact on our reputation, regardless of whether or not we have engaged in any inappropriate activities. The PRC government
has recently instituted specific rules, including the Guidelines, Interim Measures and the CBRC Circular 26, to develop a more transparent
regulatory environment for the online consumer finance industry. Any players in China&#8217;s online consumer finance industry who are
not in compliance with these regulations may adversely impact the reputation of the industry as a whole. Furthermore, any negative development
or perception of the consumer finance industry as a whole, including campus lending, even if factually incorrect or based on isolated
incidents or as result of conduct by other market players, could compromise our image, undermine our trust and credibility, and negatively
impact our ability to attract new customers, investors and institutional funding partners. Negative developments in the consumer finance
industry, such as widespread customer defaults, fraudulent behavior, the closure of other online consumer finance platforms, or incidents
indirectly resulting from the accumulation of large amounts of debt and inability to repay by any particular customer, may also lead to
tightened regulatory scrutiny of the sector and limit the scope of permissible business activities that may be conducted by market players
in the consumer finance industry. For instance, since 2015, there has been a number of reports of business failures of, or accusations
of fraud and unfair dealing against, certain companies in the consumer finance industry in China. If customers, investors or institutional
funding partners associate our company with these companies, they may be less willing to engage in borrowing or funding activities on
our platform. If any of the foregoing takes place, our business and results of operations could be materially and adversely affected.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our business is dependent on our ability
to maintain relationships with our business partners and other third parties, and at the same time, we are subject to risks associated
with our business partners and other third parties. </i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We currently rely on a number
of business partners and other third parties in various aspects of our business. In addition, we cooperate with a number of business partners
and other third parties to deliver our services to our customers. Furthermore, if third-party service providers fail to function properly,
we cannot assure you that we would be able to find an alternative in a timely and cost-efficient manner, or at all. Pursuing, establishing
and maintaining relationships with business partners and other third parties, as well as integrating their data and services with our
system, require significant time and resources.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The smooth operation of our
business also depends on the compliance by our business partners and other third parties with applicable laws and regulations. Any negative
publicity about business partners and other third parties, such as negative publicity about their loan collection practices and any failure
by them to adequately protect the information of our customers and investors, to comply with applicable laws and regulations or to otherwise
meet required quality and service standards, could harm our reputation. If any of the foregoing were to occur, our business and results
of operations could be materially and adversely affected. Our reputation is associated with these business partners and other third parties,
and if any of the foregoing were to occur, our reputation may suffer.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our business is subject to
governmental supervision and regulation by the relevant PRC governmental authorities. Together, these government authorities promulgate
and enforce regulations that cover many aspects of the operation of the online retail and the online finance industries. The PRC government
extensively regulates the Internet industry. As a result, in certain circumstances it may be difficult to determine what actions or omissions
may be deemed to be in violation of applicable laws and regulations.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We have made efforts to obtain
all the applicable licenses and permits. 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 new ones. If the PRC government determines that we are
operating without the proper approvals, licenses or permits or promulgates new laws and regulations that require additional approvals
or licenses or imposes additional restrictions on the operation of any part of our business, it has the power, among other things, to
levy fines, confiscate our income, revoke our business licenses, and require us to discontinue the relevant parts of our business or to
impose restrictions on the affected portion of our business. Any of these actions by the PRC government may have a material adverse effect
on our business and results of operations.</p><div>

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

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

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->11<!-- 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: center"><b>Risks Relating to Our Corporate Structure</b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We will likely not pay dividends in the
foreseeable future.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Dividend policy is subject
to the discretion of our Board of Directors and will depend on, among other things, our earnings, financial condition, capital requirements
and other factors. There is no assurance that our Board of Directors 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 BVI law, we may only pay dividends from
profits of our company, or credits standing in our 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 accounting standards and regulations in China.
The transfer to this reserve must be made before distribution of any dividend to shareholders.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our business may be materially and adversely
affected if any of our Chinese subsidiaries declare bankruptcy or become subject to a dissolution or liquidation proceeding.</i></b></p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Wholly Owned Foreign Entity (WOFE) is required
to allocate a portion of its after-tax profits, to the statutory reserve fund, and as determined by its Board of Directors, to the staff
welfare and bonus funds, which may not be distributed to equity owners.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to Company Law of
P.R. China (2013 Revision), Wholly Foreign-Owned Enterprise Law of the P.R. China (2000 Revision) and Implementing Rules for the Law of
the People&#8217;s Republic of China on Wholly Foreign Owned Enterprises (2014 Revision), our WOFE entity is required to allocate a portion
of its after-tax profits, to the statutory reserve fund, and in its discretion, to the staff welfare and bonus funds. No lower than 10%
of an enterprise&#8217;s after tax-profits should be allocated to the statutory reserve fund. When the statutory reserve fund account
balance is equal to or greater than 50% of the WOFE&#8217;s registered capital, no further allocation to the statutory reserve fund account
is required. WOFE determines, in its own discretion, the amount contributed to the staff welfare and bonus funds. These reserves represent
appropriations of retained earnings determined according to Chinese law.</p><div>

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

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our failure to obtain prior approval of
the China Securities Regulatory Commission for the listing and trading of our common shares on a foreign stock exchange could have a material
adverse effect upon our business, operating results, reputation and trading price of our common shares.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 8, 2006, six Chinese
regulatory agencies, including the Ministry of Commerce of the People&#8217;s Republic of China (&#8220;MOFCOM&#8221;), jointly issued
the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the &#8220;M&amp;A Rule&#8221;), which was amended
on June 22, 2009. The M&amp;A Rule contains provisions that require that an offshore special purpose vehicle (&#8220;SPV&#8221;) formed
for listing purposes and controlled directly or indirectly by Chinese companies or individuals shall obtain the approval of the CSRC prior
to the listing and trading of such SPV&#8217;s securities on an overseas stock exchange. On September 21, 2006, the CSRC published procedures
specifying documents and materials required to be submitted to it by an SPV seeking CSRC approval of overseas listings. However, the application
of the M&amp;A Rule remains unclear with no consensus currently existing among leading Chinese law firms regarding the scope and applicability
of the CSRC approval requirement. The CSRC has not issued any such definitive rule or interpretation, and we have not chosen to voluntarily
request approval under the M&amp;A Rule.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If we fail to maintain continuing compliance
with the PRC state regulatory rules, policies and procedures applicable to our industry, we may risk losing certain preferential tax and
other treatments which may adversely affect the viability of our current corporate structure, corporate governance and business operations.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">According to the Guidelines
on Foreign Investment issued by the State Council in 2002 and the Catalog on Foreign Invested Industries (2017 Revision) issued by the
National Development and Reform Commission and MOFCOM, IT services fall into the category of industries in which foreign investment is
encouraged. 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&#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. If and to the extent we fail to maintain compliance
with such applicable rules and regulations, our operations and financial results may be adversely affected.</p><div>

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

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

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

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

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

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

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Uncertainties with respect to the PRC legal
system could have a material adverse effect on us.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The PRC legal system is based
on written statutes. Prior court decisions may be cited for reference but have limited precedential value. Since the late 1970s, the PRC
government has been building a comprehensive system of laws and regulations governing economic matters in general. The overall effect
has been to significantly enhance the protections afforded to various forms of foreign investments in China. We conduct our business primarily
through our subsidiaries established in China. These subsidiaries are generally subject to laws and regulations applicable to foreign
investment in China. However, since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve,
the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involves
uncertainties, which may limit legal protections available to us. In addition, some regulatory requirements issued by certain PRC government
authorities may not be consistently applied by other government authorities (including local government authorities), thus making strict
compliance with all regulatory requirements impractical, or in some circumstances impossible. For example, we may have to resort to administrative
and court proceedings to enforce the legal protection that we enjoy either by law or contract. However, since PRC administrative and court
authorities have discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to predict the
outcome of administrative and court proceedings and the level of legal protection we enjoy than in more developed legal systems. These
uncertainties may impede our ability to enforce the contracts we plan to enter into with our business partners, clients and suppliers.
In addition, such uncertainties, including any inability to enforce our contracts, together with any development or interpretation of
PRC law that is adverse to us, could materially and adversely affect our business and operations. Furthermore, intellectual property rights
and confidentiality protections in China may not be as effective as in the United States or other more developed countries. We cannot
predict the effect of future developments in the PRC legal system, including the promulgation of new laws, changes to existing laws or
the interpretation or enforcement thereof, or the preemption of local regulations by national laws. These uncertainties could limit the
legal protections available to us and other foreign investors, including you. In addition, any litigation in China may be protracted and
result in substantial costs and diversion of our resources and management attention.</p><div>

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

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>The Chinese government may intervene in or influence our operations
at any time, which could result in a material change in our operations and significantly and adversely impact the value of our securities.</i></b></p><div>

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

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Chinese government has significant oversight
and discretion over the conduct of our business and may intervene or influence our operations as the government deems appropriate to further
regulatory, political and societal goals. The Chinese government has recently published new policies that significantly affected certain
industries such as the education and internet industries, and we cannot rule out the possibility that it will in the future release regulations
or policies regarding our industry that could require us to seek permission from Chinese authorities to continue to operate our business
adversely affect our business, financial condition and results of operations. Furthermore, recent statements made by the Chinese government
have indicated an intent to increase the government&#8217;s oversight and control over offerings of companies with significant operations
in China that are to be conducted in foreign markets, as well as foreign investment in China-based issuers like us. Any such action, once
taken by the Chinese government, could significantly limit or completely hinder our ability to offer or continue to offer securities to
our investors, and could cause the value of our securities to significantly decline or become worthless.</p><div>

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

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Recent regulatory developments in China may subject us to additional
regulatory review and disclosure requirement, expose us to government interference, or otherwise restrict our ability to offer securities
and raise capitals outside China, all of which could materially and adversely affect our business and the value of our securities.</i></b></p><div>

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

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In light of the recent statements by the Chinese
government indicating its intention to exert more oversight and control over overseas offerings of China-based companies and the proposed
CAC review for certain data processing operators in China, we may adjust our business operations in the future, to comply with PRC laws
regulating our industry and our business operations. However, such efforts may not be completed in a liability-free manner or at all.
We cannot guarantee that we will not be subject to PRC regulatory inspection and/or review relating to cybersecurity, especially when
there remains significant uncertainty as to the scope and manner of the regulatory enforcement. If we become subject to regulatory inspection
and/or review by the CAC or other PRC authorities, or are required by them to take any specific actions, it could cause suspension or
termination of the future offering of our securities, disruptions to our operations, result in negative publicity regarding our company,
and divert our managerial and financial resources. We may also be subject to fines or other penalties, which could materially and adversely
affect our business, financial condition, and results of operations.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We may be subject to PRC laws relating to, among
others, data security and restrictions over foreign investments in value-added telecommunications services and other industry sectors
set out in the Special Administrative Measures (Negative List) for the Access of Foreign Investment (2020 Edition). Specifically, we may
be subject to PRC laws relating to the collection, use, sharing, retention, security, and transfer of confidential and private information,
such as personal information and other data. These PRC laws apply not only to third-party transactions, but also to transfers of information
between us and our wholly foreign-owned enterprises in China and Hong Kong, and other parties with which we have commercial relations.
These PRC laws and their interpretations and enforcement continue to develop and are subject to change, and the PRC government may adopt
other rules and restrictions in the future.</p><div>

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

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The recent regulatory developments in China, in
particular with respect to restrictions on China-based companies raising capital offshore, and the government-led cybersecurity reviews
of certain companies with variable-interest entity (&#8220;VIE&#8221;) structure, may lead to additional regulatory review in China over
our financing and capital raising activities in the United States. Pursuant to the PRC Cybersecurity Law, which was promulgated by the
Standing Committee of the National People&#8217;s Congress on November 7, 2016 and took effect on June 1, 2017, personal information and
important data collected and generated by a critical information infrastructure operator in the course of its operations in China must
be stored in China, and if a critical information infrastructure operator purchases internet products and services that affect or may
affect national security, it should be subject to cybersecurity review by the Cyberspace Administration of China (the &#8220;CAC&#8221;).
The PRC Cybersecurity Law also establishes more stringent requirements applicable to operators of computer networks, especially to operators
of networks which involve critical information infrastructure. The PRC Cybersecurity Law contains an overarching framework for regulating
Internet security, protection of private and sensitive information, and safeguards for national cyberspace security and provisions for
the continued government regulation of the Internet and content available in China. The PRC Cybersecurity Law emphasizes requirements
for network products, services, operations and information security, as well as monitoring, early detection, emergency response and reporting.
Due to the lack of further interpretations, the exact scope of &#8220;critical information infrastructure operator&#8221; remains unclear.</p><div>

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

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On July 10, 2021, the CAC publicly issued the Cybersecurity
Review Measures (the &#8220;Draft Measures&#8221;) for public comments until July 25, 2021. According to the Draft Measures, the scope
of cybersecurity reviews is extended to data processing operators engaging in data processing activities that affect or may affect national
security. The Draft Measures further requires that any operator applying for listing on a foreign exchange must go through cybersecurity
review if it possesses personal information of more than one million users. According to the Draft Measures, a cybersecurity review assesses
potential national security risk that may be brought about by any procurement, data processing, or overseas listing. The review focuses
on several factors, including, among others, (1) the risk of theft, leakage, corruption, illegal use or export of any core or important
data, or a large amount of personal information, and (2) the risk of any critical information infrastructure, core or important data,
or a large amount of personal information being affected, controlled or maliciously exploited by a foreign government after a company
is listed overseas. While the Draft Measures have been released for consultation purposes, there is still uncertainty regarding the final
content of the Draft Measures, its adoption timeline or effective date, its final interpretation and implementation, and other aspects.</p><div>

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

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Furthermore, the Standing Committee of the National
People&#8217;s Congress passed the Personal Information Protection Law of the PRC (&#8220;PIPL&#8221;), which will become effective from
November 1, 2021, and requires general network operators to obtain a personal information protection certification issued by recognized
institutions in accordance with the CAC regulation before such information can be transferred out of China.</p><div>

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

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On July 30, 2021, in response to the recent regulatory
developments in China and actions adopted by the PRC government, the Chairman of the SEC issued a statement requesting additional disclosures
from offshore issuers with China-based operating companies before their registration statements will be declared effective, including
detailed disclosure related to VIE structures and whether the VIE and the issuer, when applicable, received or were denied permission
from the PRC authorities to list on U.S. exchanges and the risks that such approval could be denied or rescinded.</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="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On August 1, 2021, the CSRC stated that it had
taken note of the new disclosure requirements announced by the SEC regarding the listings of Chinese companies and the recent regulatory
development in China, and that the securities regulators in both countries should strengthen communications on regulating China-related
issuers. Our PRC legal counsel, Beijing Jindong Law Firm, has advised us that, in light of our business operations, we should not be required
to undergo the CAC review for any offering that we may make. However, if the enacted version of the Draft Measures mandates clearance
of cybersecurity review and other specific actions to be completed by companies aiming to offer securities outside China, we cannot assure
you that the PRC regulatory authorities will not take a contrary view or will not subsequently require us to undergo the approval procedures
and subject us to penalties for non-compliance, or that if we are required to obtain such clearance, such clearance can be timely obtained,
or at all. If we become subject to cybersecurity inspection and/or review by the CAC or other PRC authorities or are required by them
to take any specific actions, it could cause suspension or termination of the future offering of our securities, including offerings under
this registration statement, disruptions to our operations, result in negative publicity regarding our company, and divert our managerial
and financial resources. We may also be subject to significant fines or other penalties, which could materially and adversely affect our
business, financial condition and results of operations. Furthermore, in the event that our subsidiaries become operators of critical
information infrastructure in the future they (and MMTEC) may be subjected to the above-described regulation.</p><div>

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

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>The PRC government has significant influence over companies with
China-based operations by enforcing existing rules and regulation, adopting new ones, or changing relevant industrial policies in a manner
that may materially increase our compliance cost, change relevant industry landscape or otherwise cause significant changes to our business
operations in China, which could result in material and adverse changes in our operations and cause the value of our securities to significantly
decline or be worthless.</i></b></p><div>

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

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our operations are located entirely within China.
The PRC government has significant influence over the China-based operations of any company by allocating resources, providing preferential
treatment to particular industries or companies, or imposing industry-wide policies on certain industries. The PRC government may also
amend or enforce existing rules and regulation, or adopt ones, which could materially increase our compliance cost, change the relevant
industry landscape, or cause significant changes to our business operations in China. In addition, the PRC regulatory system is based
in part on government policies and internal guidance, some of which are not published on a timely basis, or at all, and some of which
may even have a retroactive effect. We may not be aware of all non-compliance incidents at all times, and we may face regulatory investigation,
fines and other penalties as a consequence. As a result of the changes in the industrial policies of the PRC government, including the
amendment to and/or enforcement of the related laws and regulations, companies with China-based operations, including us, and the industries
in which we operate, face significant compliance and operational risks and uncertainties. For example, on July 24, 2021, Chinese state
media, including Xinhua News Agency and China Central Television, announced a broad set of reforms targeting private education companies
providing after-school tutoring services and prohibiting foreign investments in institutions providing such after-school tutoring services.
As a result, the market value of certain U.S. listed companies with China-based operations in the affected sectors declined substantially.
As of the date of this prospectus, we are not aware of any similar regulations that may be adopted to significantly curtail our business
operations in China. However, if such other adverse regulations or policies are adopted in China, our operations in China will be materially
and adversely affected, which may significantly disrupt our operations and adversely affect our business.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>We may be subject to anti-monopoly concerns as a result of our
doing business in China.</i></b></p><div>

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

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Article 3 of Anti-Monopoly Law of the People&#8217;s
Republic of China (the &#8220;Anti-Monopoly Law&#8221;) prohibits &#8220;monopolistic practices,&#8221; which include: a) the conclusion
of monopoly agreements between operators; b) the abuse of dominant market position by operators; and c) concentration of undertakings
which has or may have the effect of eliminating or restricting market competition. Also, according to Article 19 of the Anti-Monopoly
Law, the operator(s) will be assumed to have a dominant market position if it has following situation: a) an operator has 50% or higher
market share in a relevant market; b) two operators have 66% or higher market share in a relevant market; or c) three operators have 75%
or higher market share in a relevant market. We believe none of our subsidiaries in China has engaged in any monopolistic practices in
China, and that recent statements and regulatory actions by the Chinese government do not impact our ability to conduct business, accept
foreign investments, or list on an U.S. or other foreign stock exchange. However, there can be no assurance that regulators in China will
not promulgate new laws and regulations or adopt new series of regulatory actions which may require our Chinese subsidiaries to meet new
requirements on the issues mentioned above.</p><div>

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

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>We rely on offerings of our securities in the United States capital
markets to fund our working capital needs. The approval of and the filing with the CSRC or other PRC government authorities may be required
in connection with our future offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be
able to obtain such approval or complete such filing. Our failure to obtain or maintain any requisite approvals would have a material
adverse effect on our ability to continue as a going concern, and could result in a loss of your entire investment.</i></b></p><div>

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

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Regulations on Mergers and Acquisitions of Domestic
Enterprises by Foreign Investors, or the M&amp;A Rules, adopted by six PRC regulatory agencies in 2006 and amended in 2009, requires an
overseas special purpose vehicle, that is controlled directly or indirectly by the PRC companies or individuals and that has been formed
for overseas listing purposes through acquisitions of PRC domestic interest held by such PRC companies or individuals, to obtain the approval
of the CSRC prior to the listing and trading of such special purpose vehicle&#8217;s securities on an overseas stock exchange. The CSRC
currently has not issued any definitive rule or interpretation concerning whether our offshore offerings are subject to the M&amp;A Rules.
The interpretation and application of the regulations remain unclear, and our offshore offerings may ultimately require approval of the
CSRC. If the CSRC approval is required, it is uncertain whether we can or how long it will take us to obtain the approval and, even if
we obtain such CSRC approval, the approval could be rescinded. Any failure to obtain or delay in obtaining the CSRC approval for any of
our offshore offerings, or a rescission of such approval if obtained, would subject us to sanctions imposed by the CSRC or other PRC regulatory
authorities, which could include fines and penalties on our operations in China, restrictions or limitations on our ability to pay dividends
outside of China, and other forms of sanctions that may materially and adversely affect our business, financial condition, and results
of operations.</p><div>

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

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On July 6, 2021, the relevant PRC government authorities
issued Opinions on Strictly Cracking Down Illegal Securities Activities in Accordance with the Law. These opinions emphasized the need
to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies
and proposed to take effective measures, such as promoting the construction of relevant regulatory systems to deal with the risks and
incidents faced by China-based overseas-listed companies. As a follow-up, on December 24, 2021, the CSRC issued a draft of the Provisions
of the State Council on the Administration of Overseas Securities Offering and Listing by Domestic Companies, and issued a draft of Administration
Measures for the Filing of Overseas Securities Offering and Listing by Domestic Companies for public comments. These draft measures propose
to establish a new filing-based regime to regulate overseas offerings and listings by domestic companies. Specifically, an overseas offering
and listing by a PRC company, whether directly or indirectly, an initial or follow-on offering, must be filed with the CSRC. The examination
and determination of an indirect offering and listing will be conducted on a substance-over-form basis, and an offering and listing shall
be deemed as a PRC company&#8217;s indirect overseas offering and listing if the issuer meets the following conditions: (i) any of the
operating income, gross profit, total assets, or net assets of the PRC enterprise in the most recent fiscal year was more than 50% of
the relevant line item in the issuer&#8217;s audited consolidated financial statement for that year; and (ii) senior management personnel
responsible for business operations and management are mostly PRC citizens or are ordinarily resident in the PRC, and the principal place
of business is in the PRC or carried out in the PRC. The issuer or its affiliated PRC entity, as the case may be, shall file with the
CSRC for its initial public offering, follow-on offering and other equivalent offering activities. Particularly, the issuer shall submit
the filing with respect to its initial public offering and listing within three business days after its initial filing of the listing
application, and submit the filing with respect to its follow-on offering within three business days after the completion of the follow-on
offering. Failure to comply with the filing requirements may result in fines to the relevant PRC companies, suspension of their businesses,
revocation of their business licenses and operation permits and fines on the controlling shareholder and other responsible persons. These
draft measures also set forth certain regulatory red lines for overseas offerings and listings by PRC enterprises.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On February 17, 2023, the CSRC issued the Trial
Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, which will become effective
on March 31, 2023. On the same date of the issuance of the Trial Measures, the CSRC circulated No. 1 to No. 5 Supporting Guidance Rules,
the Notes on the Trial Measures, the Notice on Administration Arrangements for the Filing of Overseas Listings by Domestic Companies and
the relevant CSRC Answers to Reporter Questions on the official website of the CSRC, or collectively, the Guidance Rules and Notice. The
Trial Measures, together with the Guidance Rules and Notice, reiterate the basic supervision principles as reflected in the Draft Overseas
Listing Regulations by providing substantially the same requirements for filings of overseas offering and listing by domestic companies,
yet made the following updates compared to the Draft Overseas Listing Regulations, including but not limited to: (a) further clarification
of the circumstances prohibiting overseas issuance and listing; (b) further clarification of the standard of indirect overseas listing
under the principle of substance over form, and (c) adding more details of filing procedures and requirements by setting different filing
requirements for different types of overseas offering and listing. Under the Trial Measures and the Guidance Rules and Notice, initial
public offerings or listings in overseas markets by domestic companies, either in direct or indirect form, shall be filed with the CSRC
pursuant to the requirements of the Trial Measures within three working days after the relevant application is submitted overseas. The
companies that have already been listed on overseas stock exchanges prior to March 31, 2023 or the companies that have obtained the approval
from overseas supervision administrations or stock exchanges for its offering and listing prior to March 31, 2023 and will complete their
overseas offering and listing prior to September 30, 2023 are not required to make immediate filings for its listing yet need to make
filings for subsequent offerings in accordance with the Trial Measures. The companies that have already submitted an application for an
initial public offering to overseas supervision administrations but have not yet obtained the approval from overseas supervision administrations
or stock exchanges for the offering and listing prior to March 31, 2023 may arrange for the filing within a reasonable time period and
should complete the filing procedure before such companies&#8217; overseas issuance and listing.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As of the date of this prospectus, we have not
received any formal inquiry, notice, warning, sanction, or any regulatory objection from the CSRC with respect to this offering. As the
Trial Measures were newly published and there is uncertainty with respect to the filing requirements and the implementation, if we are
required to submit to the CSRC and complete the filing procedures of our overseas public offering and listing, we cannot be sure that
we will be able to complete such filing in a timely manner. Any failure or perceived failure by us to comply with such filing requirements
under the Trial Measures may result in forced rectification, warnings and fines against us and could materially hinder our ability to
offer or continue to offer our securities.</p><div>

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

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On February 24, 2023, the CSRC, Ministry of Finance
of the PRC, National Administration of State Secrets Protection and National Archives Administration of China jointly revised the Provisions
on Strengthening Confidentiality and Archives Administration for Overseas Securities Offering and Listing which was issued by the CSRC,
National Administration of State Secrets Protection and National Archives Administration of China in 2009, or the Provisions. The revised
Provisions is issued under the title the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities
Offering and Listing by Domestic Companies, and will come into effect on March 31, 2023 with the Trial Measures. One of the major revisions
to the revised Provisions is expanding its application to cover indirect overseas offering and listing, as is consistent with the Trial
Measures. The revised Provisions require that, including but not limited to (a) a domestic company that plans to, either directly or through
its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies, securities
service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies,
shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same
level; and (b) domestic company that plans to, either directly or through its overseas listed entity, publicly disclose or provide to
relevant individuals and entities including securities companies, securities service providers and overseas regulators, any other documents
and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures
stipulated by applicable national regulations.</p><div>

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

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As of the date hereof, the revised Provisions have
not come into effect. On or after March 31, 2023, any failure or perceived failure by the Company or PRC Subsidiaries to comply with the
above confidentiality and archives administration requirements under the revised Provisions and other PRC laws and regulations may result
in that the relevant entities would be held legally liable by competent authorities, and referred to the judicial organ to be investigated
for criminal liability if suspected of committing a crime.</p><div>

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</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition, we cannot assure you that any new
rules or regulations promulgated in the future will not impose additional requirements on us. If it is determined in the future that approval
and filing from the CSRC or other regulatory authorities or other procedures, including the cybersecurity review under the Measures for
Cybersecurity Review and the Draft Regulation on Network for Data Security (if implemented), are required for our offshore offerings,
it is uncertain whether we can or how long it will take us to obtain such approval or complete such filing procedures and any such approval
or filing could be rescinded or rejected. Any failure to obtain or delay in obtaining such approval or completing such filing procedures
for our offshore offerings, or a rescission of any such approval or filing if obtained by us, would subject us to sanctions by the CSRC
or other PRC regulatory authorities for failure to seek CSRC approval or filing or other government authorization for our offshore offerings.
These regulatory authorities may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of
China, limit our operating privileges in China, delay or restrict the repatriation of the proceeds from our offshore offerings into China
or take other actions that could materially and adversely affect our business, financial condition, results of operations, and prospects,
as well as the trading price of our listed securities. The CSRC or other PRC regulatory authorities also may take actions requiring us,
or making it advisable for us, to halt our offshore offerings before settlement and delivery of the shares offered. Consequently, if investors
engage in market trading or other activities in anticipation of and prior to settlement and delivery, they do so at the risk that settlement
and delivery may not occur. In addition, if the CSRC or other regulatory authorities later promulgate new rules or explanations requiring
that we obtain their approvals or accomplish the required filing or other regulatory procedures for our prior offshore offerings, we may
be unable to obtain a waiver of such approval requirements, if and when procedures are established to obtain such a waiver. Any uncertainties
or negative publicity regarding such approval requirement could materially and adversely affect our business, prospects, financial condition,
reputation, and the trading price of our listed securities. Our failure to obtain or maintain any requisite approvals would have a material
adverse effect on our ability to continue as a going concern, and could result in a loss of your entire investment.</p><div>

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

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Rules and regulations in China can change quickly with little
advance notice, creating substantial uncertainty. Changes in the PRC legal system may adversely affect our business and operation.</i></b></p><div>

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

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our major business operations are conducted in
the PRC and therefore regulated by the laws and regulations of the PRC. The PRC legal system is based on the written statutes and involves
a unified, multilevel legislative system. The National People&#8217;s Congress (the &#8220;NPC&#8221;) and its Standing Committee exercise
the state power to make laws. The NPC enacts and amends basic laws pertaining to criminal offences, civil affairs, state organs and other
matters. The Standing Committee enacts and amends all laws except for basic laws that should be enacted by the NPC. When the NPC is not
in session, its Standing Committee may partially supplement and revise laws enacted by the NPC, provided that the changes do not contravene
the laws&#8217; basic principles. Generally, the PRC laws will go through specific legislative procedures before being promulgated. The
legislative authority may propose a bill and then the bill shall be deliberated three times before being voted. However, administrative
regulations are formulated by the State Council which reports them to the NPC. The administration regulations are often promulgated with
little advance notice, which results in a lack of predictability, and substantial uncertainty. Moreover, the uncertainties may fundamentally
impact the development of one or more specific industries and in extreme cases result in the termination of certain businesses. For example,
the Opinions on Further Easing the Burden of Excessive Homework and After-School Tutoring for Students Undergoing Compulsory Education,
known as &#8220;double reduction&#8221; education policy, was promulgated by General Office of the CPC Central Committee and General Office
of the State Council on July 24, 2021. The &#8220;double reduction&#8221; education policy comes into effective immediately and has posed
a significant impact on the education and training industries, as well as those China-based companies listed in the United States. The
resulting unpredictable could materially and adversely affects the market value and the operation of the businesses affected.</p><div>

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

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Furthermore, the PRC administrative authorities
and courts have the power to interpret and implement or enforce statutory rules and contractual terms at their reasonable discretion which
makes the business environment much more complicated and unpredictable. It is difficult to predict the outcome of the administrative and
court proceedings. The uncertainties may affect our assessments of the relevance of legal requirements, and our business decisions. Such
uncertainties may result in substantial operating expenses and costs. Should there were any investigations, arbitrations or litigation
with respect to our alleged non-compliance with statutory rules and contractual terms, the management team could be distracted from our
primary business considerations, and therefore such a circumstance could materially and adversely affect our business and results of operations.
We cannot predict future developments relating to the laws, regulations and rules in the PRC. We may be required to procure additional
permits, authorizations and approvals for our operations, which we may not be able to obtain. Our failure to obtain such permits, authorizations
and approvals may materially and adversely affect our business, financial condition and the results of operations.</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"><b><i>U.S. regulators&#8217; ability to conduct investigations or enforce
rules in China is limited. </i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The majority 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 BVI or 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 BVI, may be
difficult or impossible.</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><i>The&#160;Holding&#160;Foreign&#160;Companies&#160;Accountable&#160;Act&#160;requires
the Public Company Accounting Oversight Board (PCAOB) to be permitted to inspect the issuer&#8217;s public accounting firm within three
years. This three-year period will be shortened to two years if the Accelerating&#160;Holding Foreign&#160;Companies&#160;Accountable&#160;Act&#160;is
enacted. There are uncertainties under the PRC Securities Law relating to the procedures and requisite timing for the U.S. securities
regulatory agencies to conduct investigations and collect evidence within the territory of the PRC. If the U.S. securities regulatory
agencies are unable to conduct such investigations, they may suspend or de-register our registration with the SEC and delist our securities
from applicable trading market within the US.</i></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; text-indent: 0.5in">The&#160;Holding&#160;Foreign&#160;Companies&#160;Accountable&#160;Act&#160;was
signed into law on December 18, 2020, and requires Auditors of publicly traded companies to submit to regular inspections every three
years to assess such auditors&#8217; compliance with applicable professional standards. On June 22, 2021, the U.S. Senate passed the Accelerating
Holdings Foreign Companies Accountable Act which, if passed by the U.S. House of Representatives and 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, thus reducing
the time before our securities may be prohibited from trading or delisted. As a result, the time period before our securities may be prohibited
from trading or delisted will be reduced. If the U.S. securities regulatory agencies are unable to conduct such investigations, there
exists a risk that they may determine to suspend or de-register our registration with the SEC and may also delist our securities from
applicable trading market within the US. On December 2, 2021, the SEC adopted final amendments implementing congressionally mandated submission
and disclosure requirements of the&#160;Holding&#160;Foreign&#160;Companies&#160;Accountable&#160;Act. The rules apply to registrants
that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located
in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in
foreign jurisdictions. On December 16, 2021, the PCAOB determined that it was unable to inspect or investigate completely registered public
accounting firms headquartered in mainland China because of a position taken by one or more authorities in mainland China (&#8220;the
Mainland China Determination&#8221;), and was unable to inspect or investigate completely registered public accounting firms headquartered
in Hong Kong because of a position taken by one or more authorities in Hong Kong (&#8220;the Hong Kong Determination,&#8221; and, together
with the Mainland China Determination, &#8220;the 2021 Determinations&#8221;). On December 15, 2022, the PCAOB announced that it had vacated
the 2021 Determinations after conducting extensive and thorough inspections and investigations of mainland China and Hong Kong firms in
2022 under a new comprehensive agreement with the PRC. However, the PCAOB also recognized that authorities in the PRC might take positions
at any time that would prevent the PCAOB from continuing to inspect or investigate completely, and if the PCAOB were to encounter any
impediment to conducting an inspection or investigation of auditors in mainland China or Hong Kong as a result of a position taken by
an authority in either jurisdiction, it would act immediately to consider the need to issue new determinations consistent with the HFCAA</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><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></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">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 subsidiaries as being indirectly liable for unpaid taxes, if any, arising from Indirect
Transfers by shareholders who did not obtain their common shares in the public offering of our common shares.</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">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 subsidiaries, limit their ability to distribute profits
to us, or otherwise materially and adversely affect us.</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 July 4, 2014, the PRC State
Administration of Foreign Exchange (&#8220;SAFE&#8221;) promulgated the Circular on Relevant Issues Relating to Domestic Resident&#8217;s
Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, which replaced the former Notice
on Relevant Issues Concerning Foreign Exchange Administration for PRC Residents to Engage in Financing and Inbound Investment via Overseas
Special Purpose Vehicles (generally known as SAFE Circular 75) promulgated by SAFE on October 21, 2005. On February 13, 2015, SAFE further
promulgated the Circular on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment,
or SAFE Circular 13, which took effect on June 1, 2015. This SAFE Circular 13 has amended SAFE Circular 37 by requiring PRC residents
or entities to register with qualified banks rather than SAFE or its local branch in connection with their establishment or control of
an offshore entity established for the purpose of overseas investment or financing.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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">These circulars require PRC
residents to register with qualified banks in connection with their direct establishment or indirect control of an offshore entity, for
the purpose of overseas investment and financing, with such PRC residents&#8217; legally owned assets or equity interests in domestic
enterprises or offshore assets or interests, which is referred to in SAFE Circular 37 as a &#8220;special purpose vehicle.&#8221; These
circulars further require amendment to the registration in the event of any significant changes with respect to the special purpose vehicle,
such as an increase or decrease of capital contributed by PRC residents, share transfer or exchange, merger, division or other material
events. In the event that a PRC resident holding interests in a special purpose vehicle fails to complete the required SAFE registration,
the PRC subsidiary of that special purpose vehicle may be prohibited from making profit distributions to the offshore parent and from
carrying out subsequent cross-border foreign exchange activities, and the special purpose vehicle may be restricted in its ability to
contribute additional capital into its PRC subsidiary. Furthermore, failure to comply with the various SAFE registration requirements
described above could result in liability under PRC law for evasion of foreign exchange controls.</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">We cannot provide any assurances
that all such registration will be completed in a timely manner. Failure by such shareholder or beneficial owners of our company to comply
with 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.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>PRC regulations relating to 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 subsidiaries, limit their ability to distribute profits to us, or otherwise
materially and adversely affect us.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On July 4, 2014, the PRC State
Administration of Foreign Exchange (&#8220;SAFE&#8221;) promulgated the Circular on Relevant Issues Relating to Domestic Resident&#8217;s
Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, which replaced the former Notice
on Relevant Issues Concerning Foreign Exchange Administration for PRC Residents to Engage in Financing and Inbound Investment via Overseas
Special Purpose Vehicles (generally known as SAFE Circular 75) promulgated by SAFE on October 21, 2005. On February 13, 2015, SAFE further
promulgated the Circular on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment,
or SAFE Circular 13, which took effect on June 1, 2015. This SAFE Circular 13 has amended SAFE Circular 37 by requiring PRC residents
or entities to register with qualified banks rather than SAFE or its local branch in connection with their establishment or control of
an offshore entity established for the purpose of overseas investment or financing.</p><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">These circulars require PRC
residents to register with qualified banks in connection with their direct establishment or indirect control of an offshore entity, for
the purpose of overseas investment and financing, with such PRC residents&#8217; legally owned assets or equity interests in domestic
enterprises or offshore assets or interests, which is referred to in SAFE Circular 37 as a &#8220;special purpose vehicle.&#8221; These
circulars further require amendment to the registration in the event of any significant changes with respect to the special purpose vehicle,
such as an increase or decrease of capital contributed by PRC residents, share transfer or exchange, merger, division or other material
events. In the event that a PRC resident holding interests in a special purpose vehicle fails to complete the required SAFE registration,
the PRC subsidiary of that special purpose vehicle may be prohibited from making profit distributions to the offshore parent and from
carrying out subsequent cross-border foreign exchange activities, and the special purpose vehicle may be restricted in its ability to
contribute additional capital into its PRC subsidiary. Furthermore, failure to comply with the various SAFE registration requirements
described above could result in liability under PRC law for evasion of foreign exchange controls.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We cannot provide any assurances
that all such registration will be completed in a timely manner. Failure by such shareholder or beneficial owners of our company to comply
with 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.&#160;&#160;</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>PRC regulation of loans and direct investment
by offshore holding companies to PRC entities may delay or prevent us from making 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></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As an offshore holding company
of our PRC subsidiary, we may make loans to our PRC subsidiary, or we may make additional capital contributions to our PRC subsidiary.
Any loans to our PRC subsidiary 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 statutory limits and must be registered with
SAFE or its local counterpart.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We may also decide to finance
our PRC subsidiary through capital contributions. These capital contributions must be approved by MOFCOM 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 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.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On June 15, 2016, SAFE promulgated
the Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or SAFE Circular
No.16. SAFE Circular No. 16 stipulates that the use of capital by foreign-invested enterprises, or FIEs shall follow &#8220;the principle
of authenticity and self-use&#8221; within the business scope of such FIEs. The capital of an FIE and capital in Renminbi obtained by
the FIE from foreign exchange settlement shall not be used for the following purposes: (i) directly or indirectly used for payment beyond
the business scope of the enterprises or the payment prohibited by relevant laws and regulations; (ii) directly or indirectly used for
investment in securities or investments other than banks&#8217; principal-secured products unless otherwise provided by relevant laws
and regulations; (iii) the granting of loans to non-affiliated enterprises, except where it is expressly permitted in the business license;
and (iv) paying the expenses related to the purchase of real estate that is not for self-use (except for the foreign-invested real estate
enterprises).</p><div>

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

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Governmental control of currency conversion
may limit our ability to use our future revenues effectively and the ability of our PRC subsidiary to obtain financing.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The PRC government imposes
control on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China.
Restrictions on currency conversion imposed by the PRC government may limit our ability to use our future 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. 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 cannot assure you that the registration
process will not delay or prevent our conversion of Renminbi for use outside of China.</p><div>

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

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

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">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 subsidiary. If our company or any of our overseas subsidiaries is considered a PRC tax resident enterprise
for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. First, our company or our overseas
subsidiary will be subject to the uniform 25% enterprise income tax rate as to our global income as well as PRC enterprise income tax
reporting obligations. Second, although under the Enterprise Income Tax Law and its implementing rules dividends paid to us from our PRC
subsidiary would qualify as tax-exempted income, we cannot assure you that such dividends will not be subject to a 10% withholding tax,
as the PRC foreign exchange control authorities, which enforce the withholding tax, have not yet issued guidance with respect to the processing
of outbound remittances to entities that are treated as resident enterprises for PRC enterprise income tax purposes. Finally, dividends
payable by us to our investors and gain on the sale of our common shares may become subject to PRC withholding tax. It is possible that
future guidance issued with respect to the new resident enterprise classification could result in a situation in which a withholding tax
of 10% for our non-PRC enterprise investors or a potential withholding tax of 20% for individual investors is imposed on dividends we
pay to them and with respect to gains derived by such investors from transferring our common shares. 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 common shares under the circumstances mentioned
above, the value of your investment in our common shares may be materially and adversely affected. It is unclear whether, if we are considered
a PRC resident enterprise, holders of our common shares would be able to claim the benefit of income tax treaties or agreements entered
into between China and other countries or areas.</p><div>

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

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As a holding company, we conduct
substantially all of our business through our consolidated subsidiaries incorporated in China. We may rely on dividends paid by our PRC
subsidiary for our cash needs, including the funds necessary to pay any dividends and other cash distributions to our shareholders, to
service any debt we may incur and to pay our operating expenses. The payment of dividends by entities established in China is subject
to limitations. Regulations in China currently permit payment of dividends only out of accumulated profits as determined in accordance
with accounting standards and regulations in China. Our PRC subsidiary is required to set aside at least 10% of its after-tax profit based
on PRC accounting standards each year to its general reserves or statutory capital reserve fund until the aggregate amount of such reserves
reaches 50% of its respective registered capital. As a result, our PRC subsidiary is restricted in their ability to transfer a portion
of their net assets to us in the form of dividends. In addition, if our PRC subsidiary incurs debt on its own behalf in the future, the
instruments governing the debt may restrict its ability to pay dividends or make other distributions to us. Any limitations on the ability
of our PRC subsidiary to transfer funds to us could materially and adversely limit our ability to grow, make investments or acquisitions
that could be beneficial to our business, pay dividends and otherwise fund and conduct our business.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our current employment practices may be
restricted under the PRC Labor Contract Law and our labor costs may increase as a result.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">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 the Labor Contract
Law and its implementing rules have not been in effect very long and because there is lack of clarity with respect to their implementation
and potential penalties and fines, 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.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; 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>Risks Related to Ownership of our Common Shares</b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We&#160;are not in compliance with Nasdaq
Listing Rule&#160;5550(a)(2), the bid price rule. If we are unable to cure the failure within the prescribed time period, our common stock
will be subject to delisting. A delisting would materially reduce the liquidity of our common stock and have an adverse effect on our
market price.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On January 26, 2022, the Nasdaq
Listing Qualifications Department notified us that that minimum closing bid price per share for our common stock was below $1.00 for a
period of 30 consecutive business days and that the Company did not meet the minimum bid price requirement set forth in Nasdaq Listing
Rule 5550(a)(2). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company has a compliance period of 180 calendar days, or until July
25, 2022 (the &#8220;Compliance Period&#8221;), to regain compliance with Nasdaq&#8217;s minimum bid price requirement. If at any time
during the Compliance Period, the closing bid price per share of the Company&#8217;s common stock is at least $1.00 for a minimum of 10
consecutive business days, Nasdaq will provide the Company a written confirmation of compliance and the matter will be closed. In the
event the Company does not regain compliance by July 25, 2022, the Company may be eligible for an additional 180 calendar day period to
regain compliance. To qualify, the Company will be required to meet the continued listing requirement for market value of publicly held
shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the bid price requirement, and will
need to provide written notice of its intention to cure the deficiency during the second compliance period, including by effecting a reverse
stock split, if necessary. If the Company chooses to implement a reverse stock split, it must complete the split no later than ten business
days prior to the expiration of the second compliance period.</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: 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
delisting would materially reduce the liquidity of our common stock and have an adverse effect on our market price. A delisting would
also likely make it more difficult for us to obtain financing through the sale of our equity. Any such sale of equity would likely be
more dilutive to our current stockholders than would be the case if our shares were listed.</span></p><div>

</div><p style="font: 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>If
our financial condition deteriorates as a NASDAQ listed company, we may not meet continued listing standards on the NASDAQ Capital Market.</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
securities are currently listed for trading on the NASDAQ Capital Market. The NASDAQ Capital Market requires companies to fulfill specific
requirements in order for their securities to continue to be listed. If our common shares are delisted from the NASDAQ Capital Market
at some later date, our shareholders could find it difficult to sell our common shares. In addition, if our common shares are delisted
from the NASDAQ Capital Market at some later date, we may apply to have our common shares quoted on the Bulletin Board or in the &#8220;pink
sheets&#8221; maintained by the National Quotation Bureau, Inc. The Bulletin Board and the &#8220;pink sheets&#8221; are generally considered
to be less efficient markets than the NASDAQ Capital Market. In addition, if our common shares are delisted at some later date, our common
shares may be subject to the &#8220;penny stock&#8221; regulations. These rules impose additional sales practice requirements on broker-dealers
that sell low-priced securities to persons other than established customers and institutional accredited investors and require the delivery
of a disclosure schedule explaining the nature and risks of the penny stock market. As a result, the ability or willingness of broker-dealers
to sell or make a market in our common shares might decline. If our common shares are delisted from the NASDAQ Capital Market at some
later date or become subject to the penny stock regulations, it is likely that the price of our common shares would decline and that
our shareholders would find it difficult to sell their common shares. In addition, we have relied on an exemption to the blue-sky registration
requirements afforded to &#8220;covered securities.&#8221; Securities listed on the NASDAQ Capital Market are &#8220;covered securities.&#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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>We
are a &#8220;foreign private issuer,&#8221; and our disclosure obligations differ from those of U.S. domestic reporting companies. As
a result, we may not provide you the same information as U.S. domestic reporting companies or we may provide information at different
times, which may make it more difficult for you to evaluate our performance and 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">We
are a foreign private issuer and, 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. As a foreign private issuer, we will also be exempt from the requirements of Regulation FD (Fair Disclosure) which,
generally, are meant to ensure that select groups of investors are not privy to specific information about an issuer before other investors.
However, we will still be subject to the anti-fraud and anti-manipulation rules of the SEC, such as Rule 10b-5 under the Exchange Act.
Since many of the disclosure obligations imposed on us as a foreign private issuer differ from those imposed on U.S. domestic reporting
companies, you should not expect to receive the same information about us and at the same time as the information provided by U.S. domestic
reporting companies.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, 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>Common
shares eligible for future sale may adversely affect the market price of our common shares, as the future sale of a substantial amount
of outstanding common shares in the public marketplace could reduce the price of our common shares.</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 price of our common shares could decline as a result of sales of substantial amounts of our common shares in the public market,
or the perception that these sales could occur. In addition, these factors could make it more difficult for us to raise funds through
future offerings of our common 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><p style="font: 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
officers, directors and principal shareholders own a significant percentage of our common shares and will be able to exert significant
control over matters subject to shareholder approval.</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
officers, directors and 5% or greater shareholders, in the aggregate, beneficially own approximately 42.0% of our outstanding common
shares. Specifically, our chief executive officer and Chairman, in the aggregate, beneficially own 10.4%, which, in turn, will allow
such shareholders to exert substantial influence over matters such as electing directors and approving mergers or other business combination
transactions. As a result, our officers, directors and 5% or greater shareholders possess substantial ability to impact our management
and affairs and the outcome of matters submitted to shareholders for approval.&#160; This concentration of ownership and voting power
may also discourage, delay or prevent a change in control of our company, which could deprive our shareholders of an opportunity to receive
a premium for their common shares as part of a sale of our company and might reduce the price of our common shares. These actions may
be taken even if they are opposed by our other shareholders.&#160;See &#8220;Major Shareholders.&#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>

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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>We
will incur increased costs and become subject to additional regulations and requirements as a result of becoming a newly public company,
and our management will be required to devote substantial time to new compliance matters, which could lower our profits or make it more
difficult to run 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">As
a newly public company, we will incur significant legal, accounting and other expenses that we have not incurred as a private company,
including costs associated with public company reporting requirements and costs of recruiting and retaining non-executive directors.
We also have incurred and will incur costs associated with the Sarbanes-Oxley Act and related rules implemented by the Securities and
Exchange Commission, or the SEC, and NASDAQ. The expenses incurred by public companies generally for reporting and corporate governance
purposes have been increasing. We expect these rules and regulations to increase our legal and financial compliance costs and to make
some activities more time-consuming and costly, although we are currently unable to estimate these costs with any degree of certainty.
Our management will need to devote a substantial amount of time to ensure that we comply with all of these requirements. These laws and
regulations also could make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability
insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or
similar coverage. These laws and regulations could also make it more difficult for us to attract and retain qualified persons to serve
on our Board of Directors, our board committees or as our executive officers. Furthermore, if we are unable to satisfy our obligations
as a public company, we could be subject to delisting of our common&#160;shares, fines, sanctions and other regulatory action and potentially
civil litigation.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, 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
market price of common shares may be volatile, which could cause the value of your investment to 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
market price of our common shares may be highly volatile and could be subject to wide fluctuations. Securities markets worldwide experience
significant price and volume fluctuations. This market volatility, as well as general economic, market or political conditions, could
reduce the market price of our common shares in spite of our operating performance. In addition, our results of operations could be below
the expectations of public market analysts and investors due to a number of potential factors, including variations in our quarterly
results of operations, additions or departures of key management personnel, failure to meet analysts&#8217; earnings estimates, publication
of research reports about our industry, litigation and government investigations, changes or proposed changes in laws or regulations
or differing interpretations or enforcement thereof affecting our business, adverse market reaction to any indebtedness we may incur
or securities we may issue in the future, changes in market valuations of similar companies or speculation in the press or investment
community, announcements by our competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures
or capital commitments, adverse publicity about our industry in or individual scandals, and in response the market price of&#160;our
common shares could decrease significantly. You may be unable to resell your common shares of at or above the initial public offering
price. In the past few years, stock markets have experienced extreme price and volume fluctuations. In the past, following periods of
volatility in the overall market and the market price of a company&#8217;s securities, securities class action litigation has often been
instituted against these companies. This litigation, if instituted against us, could result in substantial costs and a diversion of our
management&#8217;s attention and resources, 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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Future
sales, or the perception of future sales, by us or our existing shareholders in the public market could cause the market price for our
common shares to 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
sale of substantial amounts of common shares in the public market, or the perception that such sales could occur could harm the prevailing
market price of our common shares. These sales, or the possibility that these sales may occur, also might make it more difficult for
us to sell equity securities in the future at a time and at a price that we deem appropriate. If any existing shareholders sell a substantial
amount of common shares, the prevailing market price for our common shares could be adversely affected. Our executive officers, directors
and certain of our existing shareholders will sign lock-up agreements with the underwriters that will, subject to certain customary exceptions,
restrict the sale of our common shares and certain other securities held by them for 180 days following the date of this report. The
underwriters may, in their sole discretion and at any time without notice, release all or any portion of the common shares subject to
any such lock-up agreements. As restrictions on resale end, the market price of our common shares could drop significantly if the holders
of our restricted shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult
for us to raise additional funds through future offerings of our common shares or other securities.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, 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
the rights of shareholders under BVI law differ from those under U.S. law, you may have fewer protections as a shareholder.</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 will be governed by our Memorandum and Articles of Association, the BVI Business Companies Act, 2004, as amended (the
&#8220;BVI Act&#8221;), and the common law of the BVI. The rights of shareholders to take legal action against our directors, actions
by minority shareholders and the fiduciary responsibilities of our directors under BVI law are governed by the BVI Act and the common
law of the BVI. The common law of the BVI is derived in part from comparatively limited judicial precedent in the British Virgin Islands
as well as from the common law of England and the wider Commonwealth, which has persuasive, but not binding, authority on a court in
the BVI. The rights of our shareholders and the fiduciary responsibilities of our directors under BVI law are largely codified in the
BVI Act but are potentially not as clearly established as they would be under statutes or judicial precedents in some jurisdictions in
the United States. In particular, the BVI has a less developed body of securities laws as compared to the United States, and some states
(such as Delaware) have more fully developed and judicially interpreted bodies of corporate law. As a result of all of the above, holders
of our common shares may have more difficulty in protecting their interests through actions against our management, directors or major
shareholders than they would as shareholders of a U.S. company.</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>BVI
companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect their
interests.</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">Shareholders
of BVI companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. Shareholders
of a BVI company could, however, bring a derivative action in the BVI courts, and there is a clear statutory right to commence such derivative
claims under Section 184C of the BVI Act. The circumstances in which any such action may be brought, and the procedures and defenses
that may be available in respect to any such action, may result in the rights of shareholders of a BVI company being more limited than
those of shareholders of a company organized in the United States. Accordingly, shareholders may have fewer alternatives available to
them if they believe that corporate wrongdoing has occurred. The BVI courts are also unlikely to recognize or enforce against us judgments
of courts in the United States based on certain liability provisions of U.S. securities law; and to impose liabilities against us, in
original actions brought in the BVI, based on certain liability provisions of U.S. securities laws that are penal in nature. There is
no statutory recognition in the BVI of judgments obtained in the United States, although the courts of the BVI will generally recognize
and enforce the non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits. The BVI Act offers some
limited protection of minority shareholders. The principal protection under statutory law is that shareholders may apply to the BVI court
for an order directing the company or its director(s) to comply with, or restraining the company or a director from engaging in conduct
that contravenes, the BVI Act or the company&#8217;s Memorandum and Articles of Association. Under the BVI Act, the minority shareholders
have a statutory right to bring a derivative action in the name of and on behalf of the company in circumstances where a company has
a cause of action against its directors. This remedy is available at the discretion of the BVI court. A shareholder may also bring an
action against the company for breach of duty owed to him as a member. A shareholder who considers that the affairs of the company have
been, are being or likely to be, conducted in a manner that is, or any act or acts of the company have been, or are, likely to be oppressive,
unfairly discriminatory, or unfairly prejudicial to him in that capacity, may apply to the BVI court for an order to remedy the situation.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law. Under the general
rule pursuant to English company law known as the rule in <i>Foss v. Harbottle</i>, a court will generally refuse to interfere with the
management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company&#8217;s
affairs by the majority or the Board of Directors. However, every shareholder is entitled to have the affairs of the company conducted
properly according to BVI law and the constituent documents of the company. As such, if those who control the company have persistently
disregarded the requirements of company law or the provisions of the company&#8217;s Memorandum and Articles of Association, then the
courts may grant relief. Generally, the areas in which the courts will intervene are the following: (1) an act complained of which is
outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts that constitute fraud
on the minority where the wrongdoers control the company; (3) acts that infringe or are about to infringe on the personal rights of the
shareholders, such as the right to vote; and (4) where the company has not complied with provisions requiring approval of a special or
extraordinary majority of shareholders. This means that even if shareholders were to sue us successfully, they may not be able to recover
anything to make up for the losses suffered.</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
laws of the BVI may provide less protection for minority shareholders than those under U.S. law, so minority shareholders may have less
recourse than they would under U.S. law if the shareholders are dissatisfied with the conduct of our affairs.</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">Under
the laws of the BVI, the rights of minority shareholders are protected by provisions of the BVI Act dealing with shareholder remedies
and other remedies available under common law (in tort or contractual remedies). The principal protection under statutory law is that
shareholders may bring an action to enforce the constitutional documents of the company (i.e. the Memorandum and Articles of Association)
as shareholders are entitled to have the affairs of the company conducted in accordance with the BVI Act and the Memorandum and Articles
of Association of the company. A shareholder may also bring an action under statute if he feels that the affairs of the company have
been or will be carried out in a manner that is unfairly prejudicial or discriminating or oppressive to him. The BVI Act also provides
for certain other protections for minority shareholders, including in respect of investigation of the company and inspection of the company
books and records. There are also common law rights for the protection of shareholders that may be invoked, largely dependent on English
common law, since the common law of the BVI for business companies is limited.</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 not be able to pay any dividends on our common shares in the future due to BVI 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">Under
BVI law, we may only pay dividends to our shareholders if the value of our assets exceeds our liabilities and we are able to pay our
debts as they become due. We cannot give any assurance that we will declare dividends of any amounts, at any rate or at all in the future.
Future dividends, if any, will be at the discretion of our Board of Directors, and will depend upon our results of operations, cash flows,
financial condition, payment to us of cash dividends by our subsidiaries, capital needs, future prospects and other factors that our
directors may deem appropriate.</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
are an &#8220;emerging growth company&#8221; and we cannot be certain if the reduced disclosure requirements applicable to &#8220;emerging
growth companies&#8221; will make our common shares less attractive to investors.</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 an &#8220;emerging growth company,&#8221; as defined in the JOBS Act, and we may take advantage of certain exemptions and relief
from various reporting requirements that are applicable to other public companies that are not &#8220;emerging growth companies.&#8221;
In particular, while we are an &#8220;emerging growth company&#8221; (1) we will not be required to comply with the auditor attestation
requirements of Section 404(b) of the Sarbanes-Oxley Act, (2) we will be exempt from any rules that may be adopted by the PCAOB requiring
mandatory audit firm rotations or a supplement to the auditor&#8217;s report on financial statements, (3) we will be subject to reduced
disclosure obligations regarding executive compensation in our periodic reports and proxy statements and (4) we will not be required
to hold nonbinding advisory votes on executive compensation or shareholder approval of any golden parachute payments not previously approved.
We currently intend to take advantage of the reduced disclosure requirements regarding executive compensation. If we remain an &#8220;emerging
growth company&#8221; after fiscal 2018, we may take advantage of other exemptions, including the exemptions from the advisory vote requirements
and executive compensation disclosures under the Dodd-Frank Wall Street Reform and Customer Protection Act, or the Dodd-Frank Act, and
the exemption from the provisions of Section 404(b) of the Sarbanes-Oxley Act. 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, meaning that the company can delay the adoption of certain accounting standards
until those standards would otherwise apply to private companies.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, 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 remain an &#8220;emerging growth company&#8221; until the fiscal year-end following the fifth anniversary of the completion of this
initial public offering, though we may cease to be an &#8220;emerging growth company&#8221; earlier under certain circumstances, including
(1) if we become a large accelerated filer, (2) if our gross revenue exceeds $1.07 billion in any fiscal year or (3) if we issue more
than $1.0 billion in non-convertible notes in any three-year period. The exact implications of the JOBS Act are still subject to interpretations
and guidance by the SEC and other regulatory agencies, and we cannot assure you that we will be able to take advantage of all of the
benefits of the JOBS Act. In addition, investors may find our common shares less attractive if we rely on the exemptions and relief granted
by the JOBS Act. If some investors find our common shares less attractive as a result, there may be a less active trading market for
our common shares and our stock price may decline and/or become more volatile.&#160;</span></p><div>

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</div><div><a id="a_005"></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
4. INFORMATION ON THE COMPANY</b></span></p><div>

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  <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"><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>History
    and Development of the Company</b></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">MMTEC,
INC. (&#8220;MMTEC&#8221;) was founded on January 4, 2018 under the laws of the British Virgin Islands (the &#8220;BVI&#8221;). Our main
operations are conducted through and by the People&#8217;s Republic of China (&#8220;PRC&#8221;) based operating entity, Gujia (Beijing)
Technology Co., Ltd. (&#8220;Gujia&#8221;), based in Beijing, China. On April 20, 2018, we incorporated MM Fund Services Limited (&#8220;MM
Fund&#8221;) for the purpose of providing administration services to the private equity funds industry. On May 28, 2018 and August 8,
2018, we incorporated MM Capital Management Limited (&#8220;MM Capital&#8221;) and MM Fund SPC (&#8220;MM SPC&#8221;), respectively,
for the purpose of providing assets management and investment services to clients. On March 19, 2018, MMTEC acquired a wholly owned subsidiary,
MM Future Technology Limited (&#8220;MM Future&#8221;). MM Future was incorporated in Hong Kong on October 31, 2017 for the purpose of
being a holding company for the equity interest in Gujia. In addition, our company acquired 24.9% of the outstanding securities of MMBD
Trading Limited (&#8220;MMBD Trading&#8221;) on March 28, 2018 and acquired the remaining 75.1% on April 25, 2019. The acquisition was
closed on October 18, 2019. MMBD Trading acquired a wholly owned subsidiary, MM Global Securities, INC. (&#8220;MM Global&#8221;) on
August 16, 2017. MM Global located in New York, NY. MM Global changed its corporate name from &#8220;MM IGlobal, INC&#8221; to &#8220;MM
Global Securities, Inc.&#8221; effective as of February 25, 2019. On March 15, 2019, the Company incorporated HC Securities (HK) limited
(&#8220;HC Securities&#8221;), a Hong Kong company, for the purpose of providing assets management and investment services to clients.
HC Securities is a wholly-owned subsidiary of MMTEC. HC Securities changed its corporate name from &#8220;MM Global Capital Limited&#8221;
to &#8220;HC Securities (HK) limited&#8221;, effective on December 22, 2021. HC Securities applied license to SFC and was approved on
December 21, 2021. HC Securities is licensed on dealing in securities, advising on securities and asset management. On July 9, 2019,
we acquired 49% of a Newly-Formed Entity called Xchain Fintech PTE.LTD., (&#8220;Xchain&#8221;), a Singapore company, for the purpose
of providing technical support for the construction and development of a new solutions for the existing problems of the traditional financial
industry, the difficulty experienced by investors in investing and allocating investment assets globally, and the protection of funds
and investments by using advanced technologies, such as artificial intelligence, big data analysis and blockchain. On March 23, 2020,
we acquired all outstanding securities of MMBD Investment Advisory Company Limited (&#8220;MMBD Advisory&#8221;), MMBD Advisory was formed
in January 2018 in the U.S. and is registered as an investment advisor firm under the laws of the State of New York on May 7, 2018. The
firm intends to offer non-discretionary investment advisory services to individuals and advisory services to private fund managers. We
have developed and deployed a series of platforms which comprise a business chain that enables PRC-based hedge funds, mutual funds, registered
investment advisors, proprietary trading groups, and brokerage firms to engage in securities market transactions and settlements globally.
Fundex SPC was incorporated on September 13, 2021, as a wholly-owned subsidiary of MM Capital Management Limited, for the purpose of
providing asset management services to clients.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, 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
conduct our business through and based on distinct yet integrated business systems designed to provide support for our (i) Securities
Dealers Trading System (securities registration and clearing, account management, risk management, quick trading and execution, and third
party access middleware), (ii) Private Fund Investment Management System (multi-account management, fund valuation, risk management,
quantitative trading access, liquidation and requisition management) and (iii) Mobile Transaction Individual Client System and PC Client
System (Apple IOS, Android, PC, Web). We assist PRC-based financial institutions taking part in the overseas securities trading markets
by providing them comprehensive Internet-based securities solutions. These PRC financial institutions, along with Hong Kong broker-dealer
customers, may &#8220;white label&#8221; our trading interface (i.e.,&#160;put their logos on it, make our trading interface available
to their customers without referencing our name, as if it was developed by them in-house), or they can select from among our modular
functionalities, such as order routing, trade reporting or clearing on specific products or exchanges where they may not have up-to-date
technology to offer their customers a comprehensive range of services and products. We also help PRC-based hedge funds, mutual funds,
proprietary trading groups to speed up their integration into the overseas market and offer them additional services, such as fund establishment,
issuance, custody, transaction and settlement.&#160;We also provide a series of IR solutions service for China Concepts Stock companies,
help maintain the relationship between listed companies and the company&#8217;s equity, debt investors or potential investors. We provide
our clients across all industries, sectors, and regions with strategic actionable intelligence and visibility into the capital markets
for the long term. We used internally designed and built system with the US brokerage license and the Cayman fund management qualification
to form a series of MOM funds, with the main goal of discovering small and medium-sized institutional investors and helping them set
up the fund to issue securities fund products.</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>The
Initial Public Offering</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">On
January 7, 2019, we completed our initial public offering (&#8220;IPO&#8221;) on the NASDAQ Capital Market under the symbol of &#8220;MTC&#8221;.
We offered 1,800,000 common shares at $4 per share. Net proceeds raised by us from the initial public offering amounted to approximately
$6,478,801 after deducting underwriting discounts and commissions and other offering expenses. Out of the $6.5 million net proceeds,
$500,000 was deposited into an escrow account to satisfy the initial $500,000 in potential indemnification obligations arising during
an escrow period of two years following the IPO closing date of January 7, 2019. On January 7, 2019, we sold additional 270,000 common
shares at $4 per share. Net proceeds raised by us amounted to $993,600 after deducting underwriting discounts. As a result, we raised
a total of $7,472,401 from the issuance of 2,070,000 shares of common stock in the January 2019 IPO.</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>Registered
Direct Offering, Private Placement and Convertible Notes</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">On
February 22, 2021 we entered into a Securities Purchase Agreement with certain institutional investors in connection with a registered
direct offering of 4,300,000 of the Company&#8217;s common shares, at a purchase price of $3.70 per share. The Company sold the common
shares for aggregate gross proceeds of $15,910,000. The net proceeds from the transactions were $14,637,200, after deducting certain
fees due to the placement agent and the Company&#8217;s transaction expenses, and will be used for working capital and 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">On
December 20, 2021 we entered into a Securities Purchase Agreement with a single investor pursuant to which the investor will make a $2,000,000
investment in the Company in a Regulation S private placement. Under the terms of the Purchase Agreement, the investor will purchase
5,000,000 common shares of the Company at a purchase price of $0.40 per share. The gross proceeds of the transaction were $2,000,000
before deducting fees and other expenses. The Company currently intends to use the net proceeds from the transaction for growth capital
and general working capital 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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 10, 2022, the Company
entered into a common stock purchase agreement, with VG Master Fund SPC, under which, subject to specified terms and conditions, the Company
may sell to Investor up to $6.0 million of shares of common stock, par value $0.01 per share, from time to time during the term of the
Purchase Agreement. On August 12, 2022, the Company amended and restated the common stock purchase agreement with VG Master Fund SPC which
was initially entered into on August 10, 2022. Under the Purchase Agreement, subject to specified terms and conditions, the Company may,
from time to time during the term of the Purchase Agreement, sell to Investor up to the lesser of (a) $6.0 million of shares of common
stock, par value $0.01 per share, and (b) the maximum amount of securities the Company is permitted to issue under its existing shelf
registration statement, which was declared effective by the SEC on July 21, 2020. In consideration for entering into the Purchase Agreement,
the Company issued 53,334 shares of common stock to Investor as consideration for entering into the Purchase Agreement. As of December
31, 2022, the Company sold the 1,050,000 common shares for aggregate gross proceeds of $1,256,640, and will be used for working capital
and general corporate purposes.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">

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

</div><p style="font: 10pt Times New Roman, 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 24, 2022, the Company&#8217;s shelf registration statement for up to $300,000,000 in securities was declared effective by the
SEC. Under this shelf registration statement, the Company may offer and sell from time to time up to an aggregate of $300,000,000 of
common shares (issued separately or upon exercise of warrants), warrants, debt securities, and units of the Company&#8217;s 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">On
October 29, 2022, the Company has entered into a Securities Purchase Agreement (the &#8220;Agreement 1&#8221;) with a purchaser. Pursuant
to the Agreement 1, the Company agreed to sell to this purchaser 400,000 shares of common stock for a consideration of $236,000. On December
3, 2022, the Company issued 400,000 shares to this purchaser.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, 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 23, 2022, the Company has entered into a Securities Purchase Agreement (the &#8220;Agreement 2&#8221;) with a purchaser. Pursuant
to the Agreement 2, the Company agreed to sell to this purchaser 500,000 shares of common stock for a consideration of $257,500. On December
7, 2022, the Company issued 500,000 shares to this purchaser.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, 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 22, 2023, the Company entered into a securities purchase agreement (the &#8220;Agreement&#8221;) pursuant to which the Company
issued an unsecured senior convertible promissory note to a non-U.S. investor (the &#8220;Investor&#8221;). The Note will mature in 24
months after the effective date of the Note. The Note has an original principal amount of $40,000,000 and Investor paid a purchase price
of $32,000,000, reflecting an original issue discount of 20%. The transaction contemplated under the Agreement was closed on February
22, 2023.&#160;</span></p><div>

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

</div><p style="font: 10pt Times New Roman, 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 24, 2023, the Company received a conversion notice from the Investor, and in accordance with the terms of the Note, the Company
issued an aggregate of 80,000,000 ordinary shares, par value $0.01 per share, to the Investor and its designees at a conversion price
of $0.50 per share, which represents the conversion floor price. The Investor waived the interest under the Note in connection with the
full conversion of the Note. The Company fulfilled all its obligations under the Note upon conversion. Immediately following the issuance
of the ordinary shares to the Investor, as of April 13, 2023, the Company has 85,145,041 ordinary shares issued and outstanding.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, 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 31, 2023, the Company commenced a registered direct offering of Senior Convertible Promissory Notes with an institutional investor
pursuant to a securities purchase agreement of the same date. Pursuant to the Agreement the Purchaser may purchase Senior Convertible
Promissory Notes in the aggregate original principal amount of not more than $70 million. The Notes will mature on the second anniversary
of their issuance date. The Notes have an original issue discount of 20%, resulting in an aggregate purchase price for the Offering of
up to $56 million assuming the full purchase of Notes under the Agreement. Pursuant to the Agreement, the period during which the Purchaser
may purchase the Notes began on March 31, 2023 and ends on May 11, 2023, the 30th&#160;business day after the Effective Date. There is
no minimum commitment under 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"></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">The
SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically
with the SEC and can be accessed at www.sec.gov. We maintain a corporate website at www.haisc.com. The information contained in, or accessible
from, our website or any other website does not constitute a part of 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>

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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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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"><b>B.</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>Business
    Overview</b></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
provide comprehensive, Internet-based technology services and solutions to the Chinese language speaking hedge funds, mutual funds, registered
investment advisors, proprietary trading groups, and brokerage firms engaging in securities market transactions and settlements globally.
We help these financial institutions to accelerate their integration into the overseas market by offering complete suite trading solutions,
including services such as fund establishment, issuance, custody, transaction and settlement. These financial institutions may &#8220;white
label&#8221; our trading interface (i.e., put their logos on it, make our trading interface available to their customers without referencing
our name), or they can select from among our modular functionalities, such as order routing, trade reporting or clearing on specific
products or exchanges to offer their customers a comprehensive range of services and 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
Company was founded on January 4, 2018. We have developed and deployed a series of platforms, including the ETN Counter Business System,
the PTN Private Fund Investment Management System, the Personal Mobile Transaction Client System, the PC Transaction Client System, the
Individual and Institutional Integrated Account Management System, and the Quantitative Investment Transaction Platform, which comprise
a business chain that enables Chinese language speaking hedge funds, mutual funds, registered investment advisors, proprietary trading
groups, and brokerage firms to engage in securities market transactions and settlements globally.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, 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
conduct our business through and based on distinct yet integrated business systems designed to provide support for (i) Securities Dealers
Trading System (securities registration and clearing, account management, risk management, quick trading and execution, and third party
access middleware), (ii) Private Fund Investment Management System (multi-account management, fund valuation, risk management, quantitative
trading access, liquidation and requisition management) and (iii) Mobile Transaction Individual Client System and PC Client System (Apple
IOS, Android, PC, Web). We assist PRC-based financial institutions in taking part in the overseas securities trading markets by providing
them with comprehensive Internet-based securities solutions. These PRC financial institutions, along with Hong Kong broker-dealer customers
may &#8220;white label&#8221; our trading interface (i.e., put their logos on it, make our trading interface available to their customers
without referencing our name, as if it were their in house product), or they can select services from among our modular functionalities,
such as order routing, trade reporting or clearing on specific products or exchanges where they may not have up-to-date technology to
offer their customers a comprehensive range of services and products. We also help Chinese language speaking hedge funds, mutual funds,
proprietary trading groups to speed up their integration with the overseas market and offer them additional services, such as fund establishment,
issuance, custody, transaction and settlement.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, 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
2019, our company added financial advisory and investment banking business line to the roster of services it offers to its customers.
Under this new business line, the Company anticipates providing financial advising and investment banking services, including, among
others, investments, restructuring, IPO and secondary offering guidance, and venture funding advice, for PRC-based small and medium-sized
enterprises from various industries that seek access to the US capital markets. Specifically, the Company intends to assist its customers
in financings and capital formation at different stages of their growth and 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">In
2020, our company used internally designed and built system with the US brokerage license and the Cayman fund management qualification
to form a series of MOM funds, with the main goal of discovering small and medium-sized institutional investors and helping them set
up the fund to issue securities fund 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">In
2021, our company applied for a license for dealing in securities, advising on securities and asset management in Hong Kong and continued
to increase our sales force in the fund management services business, market data services business and broker-dealer business. In turn,
our company reduce retail business gradually because of the Chinese government&#8217;s requirements for cross-border data security supervision.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, 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
2022, the company ramped up investment banking team spending, expended the size of our support teams for our investment banking and fund
management services businesses. The company announced that commencing March 6, 2023, the Company relocated its operations from Beijing
to Hong Kong Special Administrative Region.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, 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>Our
System and Solutions</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"><i>Securities
Dealers Trading Support System </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>&#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"><b>The
Electric Trading Network Counter Management System (&#8220;ETN&#8221;)</b> supports our institutional customers. The system consists
of the following business modules:</span></p><div>

</div><p style="font: 10pt Times New Roman, 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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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"><i>Our
    account management system</i> that provides customers with a highly adaptable multi-account management system that systematically
    manages multiple accounts, executes simultaneous transactions among the accounts and guarantees efficiency and fairness in transactions.</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"><i>&#160;</i></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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"><i>Our
    risk control system </i>conducts comprehensive monitoring in the transaction execution process from initial position, decision-making
    to execution by setting the warning line and open line. It evaluates dynamic control of risks presented by scanning all asset units
    every 30 minutes. The system provides one-click opening and one-click query functions to facilitate operations by the risk control
    personnel, so that risks are controlled in a more timely and efficient manner. It supports multi-dimensional risk control and eliminates
    the transaction of highly risky stocks by setting up a stock pool in which such highly risky stocks are stored. </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"><i>&#160;</i></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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"><i>Our
    fast transaction system</i> features in one-click booking, fast transaction and combined booking to rapidly and efficiently integrate
    the centralized transaction system to ensure efficiency and accuracy of transactions.</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: center"></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"><i>Private
Fund Investment Management System</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>&#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"><b>The
Private Fund Trading Network Management System (&#8220;PTN&#8221;)</b> is an in-house developed system that supports institutional customers.
The system consists of the following modules:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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%">
  <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"><i>Our
    account management system</i> - the PTN investment management system sets up account management functions such as risk control, clearing,
    accounting, reporting, and trading, etc. for fund operating and investment.</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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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"><i>Our
    fund valuation system </i>- this system provides a package of valuation services, including valuation validation, investment monitoring,
    and information disclosure, with general and grouped valuation options provided to users upon demands.</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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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"><i>Our
    fund risk management platform</i> - this system provides all-round risk control management for users in the entire process from transaction,
    compliance to risk control on three dimensions: transaction risk control, process risk control and risk control setting.</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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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"><i>Our
    quantitative transaction access</i> &#8211; this system provides the user with efficient and fast quantitative transaction access
    modes including the standardized API and customized H5, SDK, APP, PC, to ensure rapid development and operation.</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"><i>Mobile
Transaction Individual Client System and PC Client System -</i> As a result of our internal research and development efforts and upgrades,
we have developed a mobile application for business transaction and social networking for our broker-dealer customers, and an efficient
and fast transaction-only PC client system for their individual investor customers. This system provides the end users with real time
comprehensive market information (bid/ask price, volume, breaking news, etc.) access through dedicated cross-border lines. We utilize
dedicated Sino-US cross-border lines to provide end users with high-speed and stable market data, help them to apply for market licenses,
and provide integrated market information-related solutions to the users, who may choose to pay monthly or yearly. We also provide end
users with testing and debugging 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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Our
Financial Technology Solutions </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"><i>One-stop
broker technology system solution - </i>we provide the following solutions to our broker 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%">
  <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">modular
    website building, online account opening system.</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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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">modular
    PC-based trading clients and mobile APP trading clients for retail customers.</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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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">market
    data center to help them apply for exchange quotations.</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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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">ETN
    investment management system, backstage ERP system and commission clearing and settlement system.</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><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">assistance
    to deployment system and undertaking operation and maintenance services.</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"><i>One-stop
private fund investment management fund solution</i> &#8211; for small and medium-sized private funds with a management scale of more
than $1 million and less than $100 million, we provide the following one-stop establishment and investment trading solutions to assist
with:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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%">
  <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">establishing
    private equity funds, registration, administration and management of such funds.</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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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">building
    PTN investment management system, deployment of investment transaction, fund management, risk control, ERP and other modules.</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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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">opening
    trading accounts, handling valuation, liquidation and investment redemptions.</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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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">marketing.</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: center"></p><div>

</div><!-- Field: Page; Sequence: 36; 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 -->32<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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>Corporate
History and Background</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="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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"><b>MMTEC,
    INC.</b> &#8211;We formed MMTEC, INC., our BVI holding company on January 4, 2018.</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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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"><b>MM
    Future Technology Limited </b>&#8211; Our wholly-owned Hong Kong subsidiary, was incorporated on October 31, 2017.</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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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"><b>Gujia
    (Beijing) Technology Co., Ltd&#160;</b>&#8211; Our operating company in China and a wholly-owned subsidiary of MM Future Technology
    Limited.</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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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"><b>Meimei
    Zhengtong (Beijing) Technology Co., Ltd.,</b> &#8211; A PRC incorporated entity (dissolved effective as of June 8, 2018).</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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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"><b>MM
    Fund Services Limited </b>&#8211; Our wholly-owned Cayman Islands subsidiary, which was incorporated on April 20, 2018 and dormant
    as of December 31, 2020.</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"><b>MM
    Capital Management Limited</b> &#8211; Our wholly-owned Cayman Islands subsidiary, was incorporated on May 28, 2018 and dormant as
    of December 31, 2020.</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"><b>HC
    Securities (HK) Limited </b>&#8211; Formerly known as MM Global Capital Limited, a wholly-owned Hong Kong subsidiary, was incorporated
    on March 15, 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; 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"><b>MM
    Fund SPC</b> &#8211; MM Fund SPC was incorporated on August 8, 2018, as a wholly-owned subsidiary of MM Capital Management Limited.</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"><b>MMBD
    Trading Limited </b>&#8211; Our wholly-owned subsidiary of MMTEC, acquired in October 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; 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"><b>MM
    Global Securities, INC.</b> &#8211; Our operating company in New York and a wholly-owned subsidiary of MMBD Trading Limited.</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"><b>MMBD
    Investment Advisory Company Limited</b> &#8211; Our wholly-owned subsidiary of MMTEC, acquired in March 2020.</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"><b>Fundex
    SPC</b> &#8211; Fundex SPC was incorporated on September 13, 2021, as a wholly-owned subsidiary of MM Capital Management Limited.</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">Gujia
(Beijing) Technology Co., Ltd was established on June 9, 2015 under the laws of China with registered capital of RMB 10 million (approximately
$1.51 million). Its original shareholders were Xiangdong Wen, who owned 75% and Peng Dong, which owned 25%. On January 29, 2016, Gujia
increased its registered capital to RMB20.83 million (approximately $3.15 million). As result of the capital contribution, Xiangdong
Wen decreased his equity ownership to 48%, Peng Dong decreased his equity ownership to 12%, added an individual shareholder Zhen Fan,
who owned 40%. On June 6, 2016, Gujia increased its registered capital to RMB 26.04 million (approximately $3.94 million). As result
of the capital contribution, Xiangdong Wen decreased his equity ownership to 38.4%, Peng Dong decreased his equity ownership to 9.6%,
and Zhen Fan decreased his equity ownership to 32%. New shareholders Beijing Yiyi Angel Investment Management Co. Ltd. owned 6.7%, Zhoushan
Xianhe Investment Partnership (Limited Partnership) owned 10% and Shanghai Lanhong Investment Management Center (Limited Partnership)
owned 3.3%. On November 30, 2017, Peng Dong&#160;transferred its 9.6% equity ownership to Xiangdong Wen; Beijing Yiyi Angel Investment
Management Co. Ltd. transferred its 6.7% equity ownership to Zhen Fan; Shanghai Lanhong Investment Management Center (Limited Partnership)
transferred its 3.3% equity ownership to Zhen Fan, and Zhoushan Xianhe Investment Partnership (Limited Partnership) kept the same equity
ownership as before. On January 29, 2018, Xiangdong Wen transferred his 48% equity ownership to MM Future Technology Limited, Zhen Fan
transferred his 42% equity ownership to MM Future Technology Limited, Zhoushan Xianhe Investment Partnership (Limited Partnership) transferred
its 10% equity ownership to MM Future Technology Limited. MM Future Technology Limited became the sole shareholder of Gujia (Beijing)
Technology Co. Ltd.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, 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 Securities Purchase Agreement dated as of April 25, 2019, the Company agreed to purchase the remaining 75.1% of outstanding securities
of MMBD Trading Ltd., a British Virgin Islands company (&#8220;MMBD&#8221;). Prior to the consummation of this acquisition, (i) the Company
held 24.9% of outstanding securities of MMBD, and (ii) each of Xiangdong Wen (the Chairman of the Board and Chief Executive Officer)
and Zhen Fan (the former Chief Executive Officer) beneficially owned 37.55% of outstanding securities of MMBD, respectively. The Company
has agreed to pay the aggregate purchase price of $185,000 for such securities to be equally divided between the two shareholders of
MMBD. The acquisition closed on October 18, 2019, following the receipt by the Company of requisite corporate and regulatory approvals,
including, without limitation, FINRA CMA application approval, and the Company&#8217;s Audit Committee&#8217;s review and approval of
the terms and provisions of this transaction involving related parties. Following and as a result of this acquisition, MMBD has become
a wholly-owned subsidiary 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">Pursuant
to the investment agreement dated as of March 23, 2020, the Company acquired all outstanding securities of MMBD Investment Advisory Company
Limited (&#8220;MMBD Advisory&#8221;) for a consideration of $1,000, which was subsequently given up by the Hinman Au. Prior to this
transaction, all outstanding securities of MMBD Advisory were owned by Hinman Au, a director of the Company. MMBD Advisory was formed
in January 2018 in the U.S. and is registered as an investment advisor firm under the laws of the State of New York on May 7, 2018. The
firm intends to offer non-discretionary investment advisory services to individuals and advisory services to private fund managers.</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"></p><div>

</div><!-- Field: Page; Sequence: 37; 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 -->33<!-- 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><p style="font: 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>Industry
and Market Background </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">Over
the past several years, China has seen a steady increase in the rate of individual net worth and investment appetite for domestic and
overseas equity investments, including an increase in investment demand of private equity funds.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
are two main channels which can currently be utilized by Chinese investors to invest in the U.S. securities markets:</span></p><div>

</div><p style="font: 10pt Times New Roman, 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"><span style="text-decoration:underline">Ways
to invest from within the PRC</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"><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: 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"><i>Qualified
    Domestic Institutional Investor</i> (&#8220;QDII&#8221;): this status allows domestic investors to invest in publicly trading securities
    on foreign securities markets (excluding venture capital and private equity funds securities) via certain fund management institutions,
    insurance companies, securities companies and other assets management institutions which have been approved by China Securities Regulatory
    Commission (&#8220;CSRC&#8221;). These entities, in turn, offer investment opportunities to individual investors to invest in overseas
    stocks and fixed return securities.</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"><i>Qualified
    Domestic Limited Partner</i>: this status allows qualified domestic limited partners to invest in overseas private funds and private
    equities. Only a few companies have obtained this status to date.</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"><i>Qualified
    Domestic Investment Enterprise</i>: this platform allows mainland PRC investors to tap into a wider variety of foreign asset classes
    compared to the QDII by accessing offshore private equity, hedge funds and real assets, in addition to listed equities and debt securities
    that are already covered by the existing QDII. This platform is generally viewed as broad in scope, administration and lacking regulatory
    clarity.</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"><i>Outbound
    Direct Investment </i>&#8211; Chinese companies headquartered in the Shanghai Free Trade Zone may conduct almost all equity investments
    via this platform as it is not subject to any investment quotas. However, this platform is ill-suited for small scale operations
    as it only contemplates investments by institutional/corporate investors, not individuals. </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"><i>Qualified
    Domestic Individual Investor </i>is a new investment channel promoted by the Chinese government. It is expected to give PRC based
    individual investors who have at least RMB1 million of net assets more freedom to invest their money in overseas assets. It is expected
    that the PRC investors will be able to put money directly into overseas shares, bonds, mutual funds, insurance products, financial
    derivatives and property through this initiative. It is also expected to allow them to make direct investments in companies through
    mergers and acquisitions. No official date has been given for the launch of the scheme as of yet.</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: center"></p><div>

</div><!-- Field: Page; Sequence: 38; 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 -->34<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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"><span style="text-decoration:underline">Ways
to invest from outside of the PRC</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">Many
Chinese already have their assets in bank accounts outside China such as in Hong Kong, Singapore, Taiwan, U.S., or other countries. These
investors may invest these funds in any available investment. We believe that these investors will benefit from a trading platform and
service based in Mandarin Chinese.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, 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>Growth
of Chinese private fund markets </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>&#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">There
are several notable aspects of development of Chinese private fund industry in recent years:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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"><i>Rapid
    rate of growth. </i>According to Asset&#160;Management&#160;Association&#160;of China, by the end of December 2021, the number of
    registered private fund managers has reached 24,610, with a total dollar amount of RMB 19.76 trillion. The number of registered private
    funds has reached 124,117. </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><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"><i>Substantial
    number of QDII funds under management and amount of QDII quota.</i> As of the end of 2021, the number of funds has reached 174, with
    a total cumulative amount of $157.519 billion. Among them, fund companies in the securities category rank first among various institutions
    with a quota of US$84.58 billion, accounting for 54%. </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>Competition</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><p style="font: 10pt Times New Roman, 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
development of financial information technology and the emergence of Internet securities brokers, such as Tigerbroker and Futu Securities,
through an innovative Internet product development model, have changed the experience of the Internet trading platforms, by optimizing
the account opening process, improving the market response rate, and impacting the traditional retail brokers. Traditional brokers mainly
rely on conventional financial system providers for solutions. Financial technology companies provide various financial transaction solutions
for their customers, including financial transactions such as online trading, front desk transactions and backstage clearing systems,
which charge different costs according to different technical solutions.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
are several types of entities that provide investment system support in the U.S. securities markets for domestic (PRC) brokers and private
funds.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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"><i>The
    traditional retail brokerage system development company in USA.</i> At present, there are no U.S. securities technology suppliers
    specialized in providing services for the Chinese market, most of U.S. securities technology suppliers have focus on domestic market,
    and there is no entire indigenous overseas investment system suit for Chinese market.</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"><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: 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"><i>The
    traditional retail brokerage system development company in Hong Kong. </i>At present, there are four mainstream technology suppliers
    in Hong Kong, which are Hundsun technology (HongKong) Inc., Ayers Solutions Limited, Ebroker Systems LTD and iAsia Online Systems
    Limited. Among these, Hundsun technology has a shareholding in Ayers Solutions Limited. Hundsun and iAsia are public companies.</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><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"><i>The
    traditional private funds management system development company. </i>Most of the large private funds use Bloomberg system, but we
    focus on the private equity funds with assets management amount between $1 million to $200 million, our main competitor in this field
    is Hundsun Technologies.</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">For
the private funds&#8217; administrator service, there are two types of companies that provide the 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>

</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"><i>Traditional
    Hong Kong securities dealers</i>, including Galaxy Securities (Hong Kong), Haitong International Securities, CITIC International
    Securities, BOC International, Guosen Securities (Hong Kong), engage in trades of Hong Kong as well as U.S. securities. These dealers
    mainly conduct their business through offline business departments of domestic (PRC) dealers. These dealers generally buy a system
    or use the U.S. broker system, offer a total solution for the private funds.</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><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"><i>The
    traditional private funds fund administrator service</i>, including Apex Fund Services, Citco Fund Services, etc.</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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->35<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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">The
Hong Kong market mainly relies on the following four securities system development service companies providing services for traditional
securities firms and financial institutions: Hundsun.com Co., Limited, Ayers Solutions Limited, eBroker Systems Limited, and iAsia Online
Systems Limited:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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"><b>Hundsun.com
    Co., Limited </b>is a Hong Kong holding subsidiary of Hundsun Technologies Inc., located in Hong Kong, mainly providing integrated
    accounts, securities and futures solutions for the Hong Kong financial industry.</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><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"><b>Ayers
    Solutions Limited </b>is a member of the Shanghai DZH Group. Ayers was incorporated in 2001 and specialized in developing securities
    and futures trading systems and settlement system for local and global financial institutions. Our company has developed a comprehensive
    system that supports trading in multi-market, multi-currency, feature-rich sets of tools in an integrated platform with flexible
    application settings. Ayers has built an extensive network of global exchange connectivity, risk management solutions and API and
    FIX technology support. Ayers also specializes in providing trading systems and settlement system solutions for securities companies
    and futures companies in Hong Kong and its surrounding countries and regions.</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><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"><b>iAsia
    Online Systems Limited</b> is a financial software developer that supplies flexible and cost-effective applications, ranging from
    online trading, front-end trading and back-office settlement systems for various financial products to retail solutions. This company
    offers a wide range of financial products including securities, futures, commodities, options, unit trust, saving plan, leveraged
    FX and bullion systems. iAsia systems handle transaction settlement, monitor risk exposure, offer front end trading and inquiry to
    its users. All products are being used by market participants or financial houses.</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><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"><b>eBroker
    Systems Limited </b>is a financial technology solution provider focusing on the provision of financial software solutions services
    to financial institutions. Its solutions are engineered to perform a variety of functions for both front office and back office.</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
addition to the above-referenced companies, we compete with the following entities for providing services to the private equity/fund
industry:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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"><b>OP
    Investment Management Ltd</b>. is a leading asset management company based in Hong Kong, and a member of the Oriental Patron Financial
    Group. Our company manages both global and Asian-based fund vehicles with expertise across every major regional market from China,
    Korea, India to the Middle East. OPIM is a fully licensed holder of Hong Kong SFC Type 4 &amp; Type 9 licenses.</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><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"><b>AssetMark
    Financial Holdings, Inc. </b>is a U.S. turnkey asset management platform, purchased by a Chinese listed brokerage. It has provided
    professional and serial investment solutions to U.S. investment advisers over the past 20 years. As of March 31, 2016, the total
    assets under management on the AssetMark platform were about $28.5 billion, serving more than 6,700 investment advisers and over
    87,000 investors.</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"><b>Our
Strategies</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><p style="font: 10pt Times New Roman, 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
key market strategies 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">
  <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"><b><i>Providing
    free, flexible and open securities technology services - </i></b>we provide one-stop integrated solutions to small and medium-sized
    broker customers, by replacing a technical fee model with a free technical system featuring open system underlay access, standardized
    access interface and module products. The purpose is to build a more open technical platform that provides a wide variety of financial
    products and more open technical services for Internet securities.</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><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">Specifically,
as we face increased competition, we also innovate when it comes to attracting new users. The general approach is to, by use of free
platform, attract traffic and customers early on in the process, and then establish and maintain an environment connecting various users
for which we can then charge our users. In this effort, we:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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">Aim,
    when we compete with traditional technology developers, to provide free technical base platforms for securities business, which meet
    the traditional securities business in terms of functionality, security, etc., so as to attract more traditional securities companies
    to switch to our technical products,</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: center"></p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><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">Develop
    better, more innovative products and offer functionalities and user experience beyond of what traditional technology developers may
    offer; we accomplish that by providing incentive to switch to our services for free,</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><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">Provide,
    in addition to our basic set of technical products, value-added technical products, such as intelligent investment customers service,
    intelligent trading service, AI user analysis tools, etc., to help securities companies expand their business lines. We intend to
    charge for these product offerings in the future, but only if our users fully or partially use these free products first,</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><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">Provide
    fund products, intelligent investment products or other types of financial products through MM Fund Services Limited. We intend to
    become a channel distributor to help small and medium-sized securities firms to provide competitive financial products on free platforms.
    As more securities brokers use our free products, we will put these products directly in the securities business platform for free
    as a part of our standard module. As wholesalers of these products, we anticipate deriving revenue from this approach in the future,
    and</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><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">Establish
    an internal system where are able to connect different securities firms from one technical platform, so that their structured financial
    products and fixed income products can be circulated on one (our) platform.</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">Many
small and medium-sized brokers do not have the capacity for research and development and are unwilling to bear high development costs.
A licensed broker wishing to develop its own products and to build a comprehensive research and development team will need teams of engineers,
developers of IOS and Android applications, of PC applications, and websites and online account set-up system. Most small- and medium-sized
brokers are reluctant to invest in incur such 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">We
(i) make most technical systems free, open part of the core code, in an effort to build a more open technical platform to help admit
more small and medium sized brokers; (ii) modularize products to help small and medium-sized broker customers to carry out development,
lower the technical threshold, and facilitate customization; (iii) help small and medium-sized broker customers to deploy the system
within one to four weeks to commence business immediately and provide system security solutions and post-maintenance; (iv) provide technical
support in Chinese by offering solutions for technical interface with major U.S. exchanges and clearing banks; (v) deliver rapidly iterative
products by providing multiple modules of personalized portfolio solutions and a better Internet experience for small and medium-sized
broker customers; and (vi) use cloud technology to provide services with more varieties of financial products, to help small and medium-sized
brokers to gain competitive advantages in attracting their 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">Focus
on serving small and medium sized private equity funds by lowering the setting up threshold, we believe that we can help our fund customers
overcome the entry barrier, and make it possible to bring such funds to overseas stock markets. According to our analysis, we believe
that small and medium sized private equity funds with assets under management (&#8220;AUM&#8221;) between $1 million and $100 million,
especially those with AUM between $2 million and $20 million, will become the bulk of 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;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Large
equity funds tend to set up their accounts through well-known brokers, and choose the services of fund administrators that are highly
ranked across the globe. In contrast, small and medium sized private equity funds, especially those at the early stage with assets under
management below $20 million, are faced with the following challenges: (i) limited capacity for fundraising at the early stage, typically
small AUM of initial fund; (ii) small AUM equity funds makes it hard to cover the initial cost for attorneys and administrators; (iii)
unfamiliar with the process for setting up overseas equity funds, lack of related laws and regulations, difficult to open bank accounts
and brokerage trading accounts; (iv) loss of oversea growth opportunity. Many fund managers&#8217; domestic customers have already had
their own personal investments overseas. It will be easier for these fund managers to attract their investors&#8217; overseas assets
and invest in their oversea funds; (v) need tools for marketing and promotion, including brand promotion, as well as further information
about overseas market; and vi) failure of overseas investment platform and system support to meet their needs, especially the needs of
financial accounting and risk management.</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: 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">For
such funds, we will provide (i) a package solution will optimize the set-up process and reduces the set-up cost to help them to invest
in overseas markets; (ii) personal service to help them to solve issues related to the regulations and supervision of overseas funds
and account set-up; (iii) completely Chinese language based PTN investment management system, free of charge to provide fund valuation,
redemption management, and risk-control financial management system, free estimate of fund value, and a system for risk control and financial
management that is customized for China&#8217;s private equity funds; (iv) assistance in brand promotion and marketing, by providing
additional market information, and organizing industry gatherings to promote their development; and (v) providing quantitative interface
and open data to meet needs for access to small scale funds by localizing the U.S. financial industry standards so that more local quantitative
funds can be interfaced with the U.S. stock market according to native technical 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><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"><b><i>Minimize
    technical barriers to securities trading</i></b> &#8211; We aim to assist small- to medium-sized securities dealers, online financial
    management enterprises, Internet traffic platforms and individuals in their efforts to expand their respective businesses and lower
    the threshold for participation of the traditional securities industry.</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><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"><b><i>Utilize
    cloud computing technologies, open financial platforms, and more diversified financial product</i></b> - We help small and medium-
    sized securities brokerage firms build system on the cloud, we focus on providing backstage support for institutional clients, and
    develop a wide variety of technical and financial products for them.</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><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"><b><i>Support
    PRC private equity funds to participate in overseas markets</i></b> &#8211;We strive to minimize and possibly eliminate the cost
    of setting up the private equity funds, allowing our customers to use and rely on our technologies. We focus on small private funds
    with assets under management ranging from $1 million to $200 million.</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><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"><b><i>Focus
    on the Chinese market, and all the markets that use Chinese as the native language-</i></b> The U.S. securities market is the largest
    securities market in the world. We want to rely on financial technology to lower transaction threshold for all Chinese speaking investors
    to invest in U.S. securities market, and make it more convenient for them to invest.</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"><b>Our
Competitive Strengths</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 the following competitive strengths distinguish us from our competitors:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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"><b><i>Product
    advantages and technology accumulation &#8211; </i></b>by means of our technological advantages, better Internet experience and one-stop
    securities dealers solutions, we simplify the process of overseas investment transactions and lower the threshold of securities trading,
    making it easier for Chinese investors to get involved in global investment. We also provide (i) a complete product line from ENT,
    PTN to mobile end trading platform and PC-side trading platform, thus covering most of the operating systems required by broker-dealers
    and private equity funds; (ii) a stable market, trading system tested and relied for a period of time; (iii) rapid product development
    and iteration - we can develop products which meet the customer&#8217;s latest demands; and (iv) understanding of financial markets
    and information technology 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; 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"><b><i>Sound
    marketing strategies </i></b>- We follow the same rules for both brokerage firms and private equity customers: we provide free technical
    systems yet charge a fee for post financial or additional premium services to encourage more brokers-dealers and private equity funds
    to use our technical products and services. (i) through free technical system services that change the delivery mode of the securities
    industry developers, we reduce the operating costs of small and medium-sized brokerage firms, (ii) with more choices for small and
    medium-sized brokerage firms, to help their customers respond to changes in the Internet, we provide better tools and platforms that
    enable customers choose and customize their services, and (iii) by helping private equity funds overcome the set-up threshold issue,
    we enable more private equity funds step into the overseas stock market and grow with them.</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: center"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->38<!-- 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><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"><b><i>Innovative
    and open Internet idea - </i></b>By using cloud technology, we help traditional financial institutions cope with the changes in traditional
    online securities trading. Based on cloud technology that helps more brokerage firms minimize the access threshold of technology,
    we stick to the user-centered product development model, and use faster deployment systems to meet customers&#8217; demand and reduce
    their technical service costs. We maintain an open technical environment and provide an open platform for all users who want to access
    overseas investment transactions. We are also able to provide customized product service for users. We believe that the new generation
    of Chinese investors has a more sophisticated understanding of financial transactions, which requires a better user experience and
    more innovative products and service.</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">We
will (i) be more open minded, make accessible most of the bottom core code, make accessible the bottom system interface, and complete
the most challenging task so as to help customers use simple tools for development on our platform; (ii) quickly develop and update products
so as to be in better preparation for changes in the online securities trading industry; (iii) provide more tools for our customers to
help them become business partners and help them grow.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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"><b><i>A
    professional team with diversified backgrounds</i></b> - Our team members are from Internet companies, financial enterprises and
    traditional securities information system development companies. They are familiar with the financial market, and have expertise
    in the development of securities information technology. Members of this diverse backgrounds teamwork in their respective areas with
    efficiency and professionalism.</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"><b><i>Better
    ecology and environment - </i></b>With the acquisition of MMBD Trading and MM Global in the United States, we are able to provide
    better services to non-U.S. small and medium-sized brokerage firms to access the U.S. market, and also to the small and medium-sized
    private equity funds with deeper understanding of their needs.</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"><b><i>Market
    opportunities </i></b>- Traditional financial markets rely more and more on information technology. In dealing with the overseas
    market, under the barrier of language, market mechanism and cultural background, we rely on technology to change the relationship
    between brokerage firms and traditional information technology developers. As the earliest participants in this model, we enjoy favorable
    market opportunities. At the same time, there has been an increasing demand for China&#8217;s small and medium-sized private equity
    funds to go overseas, as well as more Chinese investors investing outside of China. At the early stage development of this industry,
    we will actively participate in the development of industry service standards and service system, and make good use of this market
    opportunity.</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"><b><i>Localized
    service - </i></b>24/7 customer service in complete Chinese language. From trading API document to technology support, we strive
    to create a more user-friendly environment for our customers. We also provide more pleasant user trading experience for Chinese customers.
    They will get more localized trading experience, without trial and error, and easier and more pleasant investment in overseas markets.
    Back on the Chinese market, we understand the rules of the United States. We also understand better the needs of Chinese investors.
    And we provide more localized private fund services and more financial products and services support. With the system support of
    MM Fund Services Limited and PTN, we will provide a more localized private fund administration service to our clients. We will respond
    to their request in a timely manner, being more attentive to their needs and requests.</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">Individual
investors and private equity funds coming from China and Hong Kong markets are increasingly relying on financial systems developed by
traditional system developing companies. Our competitive strengths are primarily in the following areas:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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"><b><i>Reliance
    on our technological advantages, rich Internet experience and one-stop securities dealer solutions:</i></b> We make overseas investment
    transactions more convenient by lowering the trading threshold, making it easier for Chinese investors to get involved in global
    investment. We also provide smoother user trading experience for Chinese customers. They will get more localized trading experience,
    without trial and error, becoming easier and smoother investing in overseas markets. Back on the Chinese market, we understand the
    rules of the United States, we also have a better understanding of needs of Chinese investors.</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: center"></p><div>

</div><!-- Field: Page; Sequence: 43; 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 -->39<!-- 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><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"><b><i>More
    localized private equity fund services</i></b>. Based on the system support from MM Fund Service Limited and PTN, we will provide
    more localized private fund administrator service for our clients.</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><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"><b><i>Reducing
    the technical access threshold of the securities industry</i></b>. Rely on cloud technology to help more brokerage firms to minimize
    the access threshold of technology. We insist in user-centered product development model, faster deployment systems to meet customers&#8217;
    demand and reduce their technical service costs. We adhere to an open technical environment and provide an open platform for all
    users who want to access overseas investment transactions. We also provide customized product service for users. The new generation
    of Chinese investors has an updated understanding of the transactions, which requires a better user experience and more innovative
    products and service.</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><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"><b><i>Localized
    user experience</i></b>. 24/7 customer support in complete Chinese language service. From trading API document to technology support,
    we make our customers more competitive in trading space by providing service in their native language.</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"><b>Marketing
</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><p style="font: 10pt Times New Roman, 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
aim to offer these and other similarly situated financial services providers with a full spectrum of technical system solutions. Specifically,
we intend to open an office in Hong Kong for such future customers and retain local sales force to promote our services in the market
and increase our brand exposure. In addition, we intend to increase our sales and marketing teams in Shanghai and Beijing to offer our
technical solutions to the PRC private fund industry participants. We also intend to hold conference, educational and other events to
promote our brand recognition.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, 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 </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><p style="font: 10pt Times New Roman, 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 is critical to our operations. The following are some of our technology development milestones:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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">In
    October 2015, our Shanghai Branch was founded; the Shanghai Technical Research and Development Center started operation.</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">In
    December 2015, the ETN Counter Business System was launched for trial operation.</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">In
    August 2016, the PTN Private Fund Investment Management System was launched for operation.</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">In
    December 2016, the 4th version of the ETN Investment Management System was successfully employed. The Sino-US Special Line was completed
    and the Market and Quantitative Transaction Platform started operation.</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">We
intend to maintain the research and development input in product design at no less than 35% of our company&#8217;s total input, and an
incentive mechanism for research and development personnel should be formulated to achieve breakthrough in product design stability and
security and personalization.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, 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; 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">Our
principal offices are located in Hong Kong Special Administrative Region; we also have a technical research &amp; development center
in Beijing, office in Shenzhen, Shanghai, Chengdu, China, and we also operate a broker-dealer in New York City. As of April 13, 2023,
we employed 55&#160;people on a full-time basis, comprised of 5 employees in management, 30 employees in sales and marketing, 11 employees
in research and development, and 9 employees in 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><p style="font: 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 Rights </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><p style="font: 10pt Times New Roman, 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 our technology copyright to protect our domestic business interests and ensure our competitive position in our industry. We have
placed a high priority on the management of our intellectual property. Some products that are material to our operating results incorporate
technology copyright. Although technology copyright is important to the continued success of our products, we do not believe that our
business, as a whole, is dependent on, or that its profitability would be materially affected by the revocation, termination, expiration
or infringement upon any particular patent or copyright. We have applied for software copyright protection in China covering our software
technology. We applied to National Copyright Administration of the P.R.C. for 27 software copyrights, which was approved on June 28,
2018, March 14, 2019 and September 1, 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: center"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->40<!-- 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><p style="font: 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>Properties
</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><p style="font: 10pt Times New Roman, 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
headquarters is located at Room 2302, 23/F, FWD Financial Center, 308 DES Voeux Road Central, Hong Kong. Our research and development
center is located in Beijing. All of the facilities are leased. We believe our facilities are adequate for our current needs and we do
not believe we will encounter any difficulty in extending the terms of the leases by which we occupy our respective premises.&#160;A
summary description of our facilities locations follows:</span></p><div>

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</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; ">
    <td style="vertical-align: top; text-align: left">&#160;</td><td style="text-align: left; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; text-align: left">&#160;</td><td style="text-align: left; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; text-align: center">&#160;</td><td style="text-align: left; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left">&#160;</td><td style="text-align: left; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; text-align: left">&#160;</td><td style="text-align: left; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; text-align: center">&#160;</td><td style="text-align: left; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left">&#160;</td><td style="text-align: left; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; text-align: left">&#160;</td><td style="text-align: left; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; text-align: center">&#160;</td><td style="text-align: left; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left">&#160;</td><td style="text-align: left; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; text-align: left">&#160;</td><td style="text-align: left; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; text-align: center">&#160;</td><td style="text-align: left; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; 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">Shenzhen Center</td><td style="text-align: left; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; text-align: left">Room DD-12, TCL Building, 6 Gaoxin South Road 1, Shekou, Nanshan District, Shenzhen, Guangdong</td><td style="text-align: left; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; text-align: center">January 1, 2023 &#8211; February&#160;29, 2024</td><td style="text-align: left; vertical-align: top">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left">&#160;</td><td style="text-align: left; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; text-align: left">&#160;</td><td style="text-align: left; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; text-align: center">&#160;</td><td style="text-align: left; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; 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">Chengdu Center</td><td style="text-align: left; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; text-align: left">14/F, East tower, Lingdi Center, 3 Xiyu Street, Qingyang District, Chengdu, Sichuan</td><td style="text-align: left; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; text-align: center">October 1, 2022 &#8211; September 30, 2022*</td><td style="text-align: left; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; text-align: center">2 sq. Ft.</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left">&#160;</td><td style="text-align: left; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; text-align: left">&#160;</td><td style="text-align: left; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; text-align: center">&#160;</td><td style="text-align: left; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; 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">Shanghai Center</td><td style="text-align: left; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; text-align: left">3/A, Jiali Building, 1155 Fandian Street, Pudong District, Shanghai</td><td style="text-align: left; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; text-align: center">March 8, 2022 &#8211; April 30, 2022*</td><td style="text-align: left; vertical-align: top">&#160;</td>
    <td style="vertical-align: top; text-align: center">2 sq. Ft.</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; margin-top: 0; margin-bottom: 6pt; 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">*</span></td><td style="text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Expiration can
continue to use, termination notice period 1-2 months.</span></td>
</tr></table><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>Legal
Proceedings</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 the normal course of business, MM Global is engaged in various trading
and brokerage activities on a principal and agency basis through a clearing broker. As a regulated FINRA broker-dealer MM Global is subject
to regulatory trading inquiries and investigations to determine whether any violations of federal securities or FINRA rules may have occurred.
As such, MM Global has responded to FINRA inquires. &#160;MM Global submits Letter of Acceptance, Waiver, and Consent for the purpose
of proposing a settlement of the alleged rule violations on September 9, 2022. Without admitting or denying the findings by FINRA related
to Case Number 2019062623, the Company was censured, fined $450.000. Two individuals&#8217; registration capacities were suspended for
45 days, fined $20,000 and $5,000 respectively. The Company elect to pay the fine via a 36 months&#8217; installment plan with $38,250
installment fee. As of December 31, 2022 the Company has total unpaid balance of $334,800, recorded the current portion as &#8220;Accrued
liabilities and other payables&#8221; and non-current portion as &#8220;Accrued Liabilities, Noncurrent&#8221; in consolidation financial
statement.</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">Other
than MM Global, we are currently not involved in any legal proceedings; nor are we aware of any claims that could have a material adverse
effect on our business, financial condition, results of operations or cash flows.</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>Government
Regulation</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"><b>Regulation
of Foreign Currency Exchange and Dividend Distribution</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"><b><i>Foreign
Currency Exchange.&#160;</i></b>The principal regulations governing foreign currency exchange in China are the Foreign Exchange Administration
Regulations (1996), as amended on August&#160;5, 2008, the Administration Rules of the Settlement, Sale and Payment of Foreign Exchange
(1996) and the Interim Measures on Administration on Foreign Debts (2003). Under these regulations, Renminbi are freely convertible for
current account items, including the distribution of dividends, interest payments, trade and service-related foreign exchange transactions,
but not for most capital account items, such as direct investment, loans, repatriation of investment and investment in securities outside
China, unless the prior approval of SAFE or its local counterparts is obtained. In addition, any loans to an operating subsidiary in
China that is a foreign invested enterprise, cannot, in the aggregate, exceed the difference between its respective approved total investment
amount and its respective approved registered capital amount. Furthermore, any foreign loan must be registered with SAFE or its local
counterparts for the loan to be effective. Any increase in the amount of the total investment and registered capital must be approved
by the MOFCOM or its local counterpart. We may not be able to obtain these government approvals or registrations on a timely basis, if
at all, which could result in a delay in the process of making these loans.</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
dividends paid by the subsidiary 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 Chinese governmental authorities.</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"><b><i>Dividend
Distribution.&#160;</i></b>The principal regulations governing the distribution of dividends by foreign holding companies include the
Company Law of China (1993), as amended in 2013, the Foreign Investment Enterprise Law (1986), as amended in 2000, and the Administrative
Rules under the Foreign Investment Enterprise Law (1990), as amended respectively in 2001 and 2014.</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">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 Chinese 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>

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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>Circular
37.&#160;</i></b>On July&#160;4, 2014, SAFE issued Circular 37, which became effective as of July&#160;4, 2014. According to Circular
37, Chinese 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 Chinese 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>

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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">Moreover,
Circular 37 applies retroactively. As a result, Chinese residents who have contributed domestic assets or interests to a SPV, but failed
to complete foreign exchange registration of overseas investments as required prior 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&#160;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.</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">Chinese
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 Chinese company owned by Chinese residents in the future, such Chinese residents
will be subject to the registration procedures described in Circular 37.</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>Cash
Transfers Within Our Organization</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">During
the first three months of 2023 and each of the fiscal years ended December 31, 2020, 2021 and 2022, the only transfer of assets among
MMTEC and its subsidiaries have consisted of cash. During that same period, there have been no distributions or dividends by any of our
direct or indirectly held subsidiaries to MMTEC. During that same period MMTEC has not declared any dividends or made any distributions
to its shareholders, including its U.S. investors, and we do not anticipate declaring a dividend in the foreseeable 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">MMTEC
routinely provides cash to its subsidiaries either by way of capital contribution or by way of loan. All such loans are interest-free,
unsecured and payable on demand. The proceeds of any such loan will be wired to the borrower subsidiary and will be recorded on our books
as &#8216;Inter-Company due.&#8217; Such loan amounts are eliminated in our consolidated financial statements. Cash transferred outside
of our organization to satisfy our obligations to third parties are also effected via wire transfer.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">MMTEC
is a holding company incorporated in the British Virgin Islands, and we do not have any substantive operations other than indirectly
holding the equity interest in our operating subsidiaries in China and other countries and regions. MMTEC relies on dividends paid by
our subsidiaries and capital raised from the sale of our securities to satisfy our cash needs. The payment of dividends to MMTEC by our
subsidiaries is effected by means of dividends by those entities to their direct parent and, as applicable, a redividend by that entity
to MMTEC. Such dividends are effected by resolution of the board of directors of each such entity (after provision for applicable tax
obligations).</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">China
is a foreign exchange administration country. Capital injections, cross-border trade and services transactions settled in foreign exchange,
overseas financing and profit repatriations are subject to the foreign exchange administration regulations. The Authority dealing with
foreign exchange in China is the State Administration of Foreign Exchange (SAFE) and its local branches. A Chinese subsidiary owned by
a foreign company must apply for registration of foreign exchange with the SAFE after the issuance of a business license and obtain a
foreign exchange registration certificate. When the Chinese subsidiaries apply to repatriate dividends to foreign shareholders, they
must submit the application form to SAFE with the proof that such dividends have been subjected to all applicable tax withholding. A
Chinese subsidiary can only distribute dividends out of its accumulated profits, which means that any accumulated losses must be more
than offset by its profits in other years, including the current year.&#8239;</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><!-- Field: Page; Sequence: 46; 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 -->42<!-- 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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, 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
cash transfers within the organization during the above-referenced periods were as follows:&#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"></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 colspan="15" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For The Period From January 1, 2023 through April 13, 2023</td></tr>
  <tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; font-weight: bold; text-align: left">Company (Wire transfer from)</td><td style="vertical-align: bottom; font-weight: bold; padding-bottom: 1.5pt; text-align: center">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 9%; text-align: right">20,000</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; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="vertical-align: top; text-align: center">HC Securities</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left">MMBD Trading</td><td>&#160;</td>
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    <td style="text-align: right">220,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">220,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left">MMBD Trading</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">MM Global</td><td>&#160;</td>
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    <td style="text-align: right">20,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">20,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  </table><div>


</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, 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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></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 colspan="15" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For The Year 2022</td></tr>
  <tr style="vertical-align: bottom">
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    <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; font-weight: bold; text-align: center">Purpose</td><td style="vertical-align: bottom; font-weight: bold; padding-bottom: 1.5pt; text-align: center">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; width: 24%; text-align: left">MMTEC</td><td style="width: 1%">&#160;</td>
    <td style="vertical-align: top; width: 24%; text-align: center">MMBD&#160;Trading</td><td style="width: 1%">&#160;</td>
    <td style="width: 2%; text-align: left">US$</td>
    <td style="width: 9%; text-align: right">850,000</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">850,000</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="vertical-align: top; width: 15%; text-align: center">Capital&#160;contribution</td><td style="width: 1%">&#160;</td>
    <td style="vertical-align: top; width: 9%; text-align: center">Cash</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left">MMTEC</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">MM Future</td><td>&#160;</td>
    <td style="text-align: left">US$</td>
    <td style="text-align: right">6,350,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">6,350,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Capital contribution</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Cash</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left">MMTEC</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">HC Securities</td><td>&#160;</td>
    <td style="text-align: left">HK$</td>
    <td style="text-align: right">1,500,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">191,522</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Capital contribution</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Cash</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left">MM Future</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Gujia</td><td>&#160;</td>
    <td style="text-align: left">RMB</td>
    <td style="text-align: right">24,642,492</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">3,700,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Capital contribution</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Cash</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left">MM Future</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Fundex</td><td>&#160;</td>
    <td style="text-align: left">US$</td>
    <td style="text-align: right">5,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">5,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Intercompany loan for working capital</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Cash</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left">MMBD Trading</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">MM Global</td><td>&#160;</td>
    <td style="text-align: left">US$</td>
    <td style="text-align: right">850,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">850,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Capital contribution</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Cash</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left">Gujia</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">MM Future</td><td>&#160;</td>
    <td style="text-align: left">RMB</td>
    <td style="text-align: right">716,680</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">100,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Consulting service fee</td><td>&#160;</td>
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  </table><div>


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

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td colspan="15" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For The Year 2021</td></tr>
  <tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1.5pt solid; text-align: left; font-weight: bold; vertical-align: bottom">Company (Wire transfer from)</td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt; vertical-align: bottom">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; font-weight: bold; text-align: center">Company<br/> (Wire&#160;transfer to)</td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt; vertical-align: bottom">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; font-weight: bold; text-align: center">Purpose</td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt; vertical-align: bottom">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; font-weight: bold; text-align: center">Asset&#160;Type</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; width: 24%; vertical-align: top">MMTEC</td><td style="width: 1%">&#160;</td>
    <td style="vertical-align: top; width: 24%; text-align: center">MMBD&#160;Trading</td><td style="width: 1%">&#160;</td>
    <td style="width: 2%; text-align: left">US$</td>
    <td style="width: 9%; text-align: right">330,000</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">330,000</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="vertical-align: top; width: 15%; text-align: center">Capital&#160;contribution</td><td style="width: 1%">&#160;</td>
    <td style="vertical-align: top; width: 9%; text-align: center">Cash</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left">MM Future</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">MMTEC</td><td>&#160;</td>
    <td style="text-align: left">US$</td>
    <td style="text-align: right">5,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">5,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Intercompany loan for working capital</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Cash</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; vertical-align: top">MMTEC</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">MM Future</td><td>&#160;</td>
    <td style="text-align: left">US$</td>
    <td style="text-align: right">5,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">5,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Intercompany loan for working capital</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Cash</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; vertical-align: top">MMTEC</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">MM Future</td><td>&#160;</td>
    <td style="text-align: left">US$</td>
    <td style="text-align: right">4,495,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">4,495,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Capital contribution</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Cash</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; vertical-align: top">MMTEC</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">HC Securities</td><td>&#160;</td>
    <td style="text-align: left">HK$</td>
    <td style="text-align: right">5,500,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">706,528</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Capital contribution</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Cash</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="vertical-align: top; text-align: center">HC Securities</td><td>&#160;</td>
    <td style="text-align: left">US$</td>
    <td style="text-align: right">2,000,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2,000,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Intercompany loan for working capital</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Cash</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left">HC Securities</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">MMTEC</td><td>&#160;</td>
    <td style="text-align: left">US$</td>
    <td style="text-align: right">1,446,209</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1,446,209</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Intercompany loan for working capital</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Cash</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left">MM Future</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Gujia</td><td>&#160;</td>
    <td style="text-align: left">RMB</td>
    <td style="text-align: right">18,160,500</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2,800,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Capital contribution</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Cash</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left">MMBD Trading</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">MM Global</td><td>&#160;</td>
    <td style="text-align: left">US$</td>
    <td style="text-align: right">320,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">320,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="vertical-align: top; text-align: center">Cash</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="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td colspan="15" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the year 2020</td></tr>
  <tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1.5pt solid; text-align: left; font-weight: bold; vertical-align: bottom">Company (Wire transfer from)</td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt; vertical-align: bottom">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; font-weight: bold; text-align: center">Company<br/> (Wire&#160;transfer to)</td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt; vertical-align: bottom">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; font-weight: bold; text-align: center">Purpose</td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt; vertical-align: bottom">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; font-weight: bold; text-align: center">Asset type</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; width: 24%; vertical-align: top">MMTEC</td><td style="width: 1%">&#160;</td>
    <td style="vertical-align: top; width: 24%; text-align: center">MMBD&#160;Trading</td><td style="width: 1%">&#160;</td>
    <td style="width: 2%; text-align: left">US$</td>
    <td style="width: 9%; text-align: right">100,000</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">100,000</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="vertical-align: top; width: 15%; text-align: center">Capital&#160;contribution</td><td style="width: 1%">&#160;</td>
    <td style="vertical-align: top; width: 9%; text-align: center">Cash</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left">HC Securities</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">MMTEC</td><td>&#160;</td>
    <td style="text-align: left">US$</td>
    <td style="text-align: right">60,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">60,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Intercompany loan for working capital</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Cash</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left">MM Future</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Gujia</td><td>&#160;</td>
    <td style="text-align: left">RMB</td>
    <td style="text-align: right">8,280,199</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1,180,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Capital contribution</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left">MMBD Trading</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">MM Global</td><td>&#160;</td>
    <td style="text-align: left">US$</td>
    <td style="text-align: right">100,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">100,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Capital contribution</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Cash</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left">MM Future</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">HC Securities</td><td>&#160;</td>
    <td style="text-align: left">US$</td>
    <td style="text-align: right">445,162</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">445,162</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Intercompany loan for working capital</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Cash</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left">HC Securities</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">MM Future</td><td>&#160;</td>
    <td style="text-align: left">US$</td>
    <td style="text-align: right">600,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">600,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Intercompany loan for working capital</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Cash</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
enforceability and treatment of the intercompany agreements within our organization, including the intercompany loan agreements described
above used in connection with intercompany cash transfers, have not been tested in 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"></p><div>

</div><!-- Field: Page; Sequence: 47; 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 -->43<!-- 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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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"><b>C.</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>Organizational
    Structure</b></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">The
following chart illustrates MMTec&#8217;s organizational structure as of April &#160;13, 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: center"><img alt="" src="image_001.jpg"/></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%">
  <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"><b>D.</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>Property,
    Plant and Equipment</b></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><p style="font: 10pt Times New Roman, 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 properties, see &#8220;Item 4.B. Business Overview - Properties.&#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_006"></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"><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">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_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
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"><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 discussion and analysis of our financial condition and results of operations for the years ended December 31, 2022, 2021 and
2020 should be read in conjunction with our consolidated financial statements and related notes to those consolidated financial statements
that are included elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes 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 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; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Unless
otherwise indicated, references to the &#8220;Company&#8221;, &#8220;us&#8221; or &#8220;we&#8221; refer to MMTEC, Inc. and its consolidated
subsidiaries.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, 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: 48; 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 -->44<!-- 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><p style="font: 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>Special
Note Regarding Forward-looking Statements</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">All
statements other than statements of historical fact included in this report including, without limitation, statements under &#8220;Management&#8217;s
Discussion and Analysis of Financial Condition and Results of Operations&#8221; regarding our financial position, business strategy and
the plans and objectives of management for future operations, are forward-looking statements. When used in this report, words such as
&#8220;anticipate,&#8221; &#8220;believe,&#8221; &#8220;estimate,&#8221; &#8220;expect,&#8221; &#8220;intend&#8221; and similar expressions,
as they relate to us or our management, identify forward-looking statements. Such forward-looking statements are based on the beliefs
of management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially
from those contemplated by the forward-looking statements as a result of a number of factors, including those set forth under the risk
factors and business sections in this 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"><b>&#160;</b></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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"><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; 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>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">Our
Company develops and deploys a series of platforms, including the ETN Counter Business System, the PTN Private Fund Investment Management
System, the Personal Mobile Transaction Client System, the PC Transaction Client System, the Individual and Institutional Integrated
Account Management System, and the Quantitative Investment Transaction Platform, which comprise a business chain that enables Chinese
language speaking hedge funds, mutual funds, registered investment advisors, proprietary trading groups, and brokerage firms to engage
in securities market transactions and settlements globally.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, 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
2019, our company added financial advisory and investment banking business line to the roster of services it offers to its customers.
Under this new business line, the Company anticipates providing financial advising and investment banking services, including, among
others, investments, restructuring, IPO and secondary offering guidance, and venture funding advice, for PRC-based small and medium-sized
enterprises from various industries that seek access to the US capital markets. Specifically, the Company intends to assist its customers
in financings and capital formation at different stages of their growth and 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">Our
company used internally designed and built system with the US brokerage license and the Cayman fund management qualification to form
a series of MOM funds, with the main goal of discovering small and medium-sized institutional investors and helping them set up the fund
to issue securities fund 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">The
value of the Renminbi (&#8220;RMB&#8221;), the main currency used in China, fluctuates and is affected by, among other things, changes
in China&#8217;s political and economic conditions. The conversion of RMB into foreign currencies such as the U.S. dollar have generally
been based on rates set by the People&#8217;s Bank of China, which are set daily based on the previous day&#8217;s interbank foreign
exchange market rates and current exchange rates on the world financial markets.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, 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>Basis
of Presentation</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><p style="font: 10pt Times New Roman, 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
accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally
accepted in the United States of America (&#8220;U.S. GAAP&#8221;) and with the rules and regulations of the U.S. Securities and Exchange
Commission for financial 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">The
Company&#8217;s consolidated financial statements include the accounts of MMTEC and its subsidiaries. All significant intercompany accounts
and transactions have been eliminated in consolidation.</span></p><div>

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

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->45<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="font-family: Times New Roman, 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>MANAGEMENT&#8217;S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS </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>RESULTS
OF OPERATIONS</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>Comparison
of Results of Operations for the Years Ended December 31, 2022 and 2021.</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>Revenue</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: 24.45pt; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth the components of our net revenues by amounts and percentages of our total net revenues for the periods presented:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.45pt; "><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-align: justify; "></p><div>

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="font-weight: bold; text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom">
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    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">676,049</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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  <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">20,619</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">-</td><td style="text-align: left">%</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">390,569</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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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></p><div>

</div><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 and 2021, we had revenue from
Software development and maintenance sales to our customers of $676,049 and $0, respectively. As a result of business development and
our acquisition of MMBD Trading, which has a fully owned subsidiary, MM Global, that engages in a single line of business as a securities
broker-dealer, our Company also had Placement agent services revenue of $372,677 and $0, and other related revenue of $4,006 and $1,789,
for the years ended December 31, 2022 and 2021, respectively. The company did not generate commissions revenue in 2022 and had commissions
revenue of $390,569 in 2021. For the years ended December 31, 2022 and 2021, we had revenue from performing market data services for our
customers of $20,619 and $107,184, respectively. MMBD Advisory is the administrator and investment advisor of MM Fund Growth SP. MM Fund
Growth SP will pay the investment advisor a management fee, out of the assets of the Portfolio. We had revenue from fund management services
of MM Fund Growth SP of $25,782 and $153,494 for the years ended December 31, 2022 and 2021.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, 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>Cost
of Revenue</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">Cost&#160;of
revenue consists primarily of internal labor cost and related benefits, and other overhead costs that are directly attributable to services
provided.</span></p><div>

</div><p style="font: 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">For
the years ended December 31, 2022 and 2021, cost of revenue was $231,084 and $141,302, 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"><b>&#160;</b></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: 50; 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 -->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; 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; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Gross
Profit and Gross Margin</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; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
gross profit was $868,049 for the year ended December 31, 2022, representing gross margin of 79.0%. &#160;Gross profit was $511,734 for
the year ended December 31, 2021, representing gross margin of 78.4%. Our increased gross margin was primarily attributable to our newly
launched businesses, placement agent services and software sales and maintenance, which have a higher gross profit and gross margin than
our other businesses.&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, 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>Operating
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"><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">During
the years ended December 31, 2022 and 2021 operating expenses included selling and marketing, payroll and related benefits, professional
fees, and other general and administrative expenses.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, 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>Selling
and Marketing 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">Selling
and marketing expenses totaled $1,007,652 for the year ended December 31, 2022, as compared to $303,079 for the year ended December 31,
2021, an increase of $704,573 or 232.5%. During the year ended December 31, 2022, the increase was primarily attributable to the increase
in selling staff.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, 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>Payroll
and Related Benefits</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">Payroll
and related benefits totaled $2,609,849 for the year ended December 31, 2022, as compared to $2,446,019 for the year ended December 31,
2021, an increase of $163,830 or 6.7%. As a result of the expansion of the Company&#8217;s overall business scale, the Company increased
the size of and level of spending on support team for investment banking 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>Professional
Fees </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">For
the years ended December 31, 2022 and 2021, Professional Fees consisted of the following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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="text-align: center; font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="text-align: center; font-weight: bold">&#160;</td>
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    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">267,283</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">83,333</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-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%; ">
  <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>
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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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; ">
  <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; 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%; ">
  <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; 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%; ">
  <tr style="vertical-align: top">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

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

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

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

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the years ended December 31, 2022 and 2021, other general and administrative expenses consisted of the following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">192,957</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">32,672</td><td style="text-align: left">&#160;</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">70,905</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">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">55,524</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">190,347</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">27,981</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: justify">Bad debt expense</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">100,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">550,000</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">516,234</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="padding-bottom: 4pt">&#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; 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%">
  <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>
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    the year ended December 31, 2022, rent and related utilities increased by $14,789, or 3.7%, as compared to the year ended December
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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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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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>
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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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><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%">
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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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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; 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%">
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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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, 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>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->48<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><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%">
  <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>
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    the year ended December 31, 2022, Fund SPC service fees increased by $106,383, or 126.7%, as compared to the year ended December
    31, 2021. We formed 5 new segregated portfolio of Fundex SPC and MM Fund SPC in the year ended December 31, 2022.</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%">
  <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>
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or 67.0%, as compared to the year ended December 31, 2021, which was mainly attributable to the reduced employee training activities from
outside in the year ended December 31, 2022</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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the year ended December 31, 2022, bad debt expense decreased by $450,000, or 81.8%, the Company fully recorded allowance for bad debts
of loan receivable from HY future limited in 2022 and fully recorded allowance for bad debts of loan receivable from HuaMei Trading Management
Limited due to its poor performance in 2021.</span></p></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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    the year ended December 31, 2022, regulatory fees increased by $516,234 compared to $0 in the year ended December 31, 2021. The increase
    was primarily attributable to the  fine paid by the Company in connection with a settlement entered into with FINRA.</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">Other
    general and administrative expenses were primarily comprised of office
supplies, internet service fee, and depreciation. For the year ended December 31, 2022, other general and administrative expenses increased
by $33,352, or 11.3%, as compared to the year ended December 31, 2021. This increase was primarily attributable to more office supplies
used in headquarter and Beijing center.</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><i>Loss
from 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">As a result of the foregoing, for the year ended December 31, 2022,
loss from operations amounted to $5,892,615, as compared to $6,483,184 for the year ended December 31, 2021, a decrease of $590,569, or
9.1%.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, 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
Income (Expense)</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">Other
income (expense) mainly includes interest income from bank deposits, other income (expense), foreign currency transaction gain (loss),
loss on equity method investment and impairment loss on long-term investment. Other income, net, totaled $247,239 for the year ended
December 31, 2022, as compared to other expense of $567,571 for the year ended December 31, 2021, a change of $814,810, which was mainly
attributable to an increase in interest income from bank deposits and loan receivable of $92,714, a decrease on impairment loss on long-term
investment of $585,333, a decrease in foreign currency transaction loss of $185,171, and a decrease in other income of $48,408.</span></p><div>

</div><p style="font: 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>Income
Taxes</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
did not have any income taxes expense for the years ended December 31, 2022 and 2021 since we did not generate any taxable income in
these two fiscal 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; "><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>Net
Loss</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
a result of the factors described above, our net loss was $5,645,376, or $1.61 per share (basic and diluted), for the year ended December
31, 2022. Our net loss was $7,050,755, or $2.88 per share (basic and diluted), 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; text-align: justify; text-indent: 0.5in"></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>Foreign
Currency Translation Adjustment</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
reporting currency is the U.S. dollar. The functional currency of our parent company - MMTEC, MM Future, MM Fund, MM Capital, HC Securities,
MMBD Trading, MM Global, MMBD Advisory, Fundex SPC and MM SPC, is the U.S. dollar and the functional currency of Gujia, is the Chinese
Renminbi (&#8220;RMB&#8221;). The financial statements of our subsidiaries whose functional currency is the RMB are translated to U.S.
dollars using period end rates of exchange for assets and liabilities, average rate of exchange for revenue and expenses and cash flows,
and at historical exchange rates for equity. As a result of foreign currency translations, which are a non-cash adjustment, we reported
a foreign currency translation loss of $184,885 and a foreign currency translation gain $45,115 for the years ended December 31, 2022
and 2021 respectively. This non-cash loss had the effect of increasing our reported comprehensive loss in 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: center"></p><div>

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->49<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, 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>Comprehensive
Loss</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
a result of our foreign currency translation adjustment, we had comprehensive loss of $5,830,261 and $7,005,640 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; "><span style="font-family: Times New Roman, Times, 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>Comparison
of Results of Operations for the Years Ended December 31, 2021 and 2020</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">For
a discussion of our results of operations for the fiscal year ended December 31, 2021 compared with the fiscal year ended December 31,
2020, see &#8220;Item 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS &#8212; RESULTS OF OPERATIONS&#8212; Comparison of Results of Operations
for the Years Ended December 31, 2021 and 2020&#8221; of our annual report on Form 20-F for the fiscal year ended December 31, 2021,
filed with the SEC on April 22, 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"><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>Foreign
Currency Exchange Rate Risk </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
operations are in China. Thus, our revenues and operating results may be impacted by exchange rate fluctuations between RMB and US dollars.
For the years ended December 31, 2022, 2021 and 2020, we had unrealized foreign currency translation gain of approximately $185,000,
unrealized foreign currency translation loss of approximately $39,000 and unrealized foreign currency translation gain of approximately
$118,000, respectively, because of changes in the exchange rate.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, 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>Inflation</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
effect of inflation on our revenue and operating results was not significant.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, 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%">
  <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"><b>B.</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>Liquidity
    and Capital Resources</b></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">Liquidity
is the ability of a company to generate funds to support its current and future operations, satisfy its obligations and otherwise operate
on an ongoing basis. As of December 31, 2022 and 2021, we had cash balance of approximately $3,825,000 and $11,206,000, respectively.
A portion of these funds are kept in financial institutions 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">Under
applicable PRC regulations, foreign invested enterprises, or FIEs, in China may pay dividends only out of their accumulated profits,
if any, determined in accordance with PRC accounting standards and regulations. In addition, a foreign invested enterprise in China is
required to set aside at least 10% of its after-tax profit based on PRC accounting standards each year to its general reserves until
the cumulative amount of such reserves reach 50% of its registered capital. These reserves are not distributable as cash dividends.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, 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 majority of our businesses and assets are denominated in RMB, which is not freely convertible into foreign currencies. All
foreign exchange transactions take place either through the People&#8217;s Bank of China or other banks authorized to buy and sell foreign
currencies at the exchange rates quoted by the People&#8217;s Bank of China. Approval of foreign currency payments by the People&#8217;s
Bank of China or other regulatory institutions requires submitting a payment application form together with suppliers&#8217; invoices,
shipping documents and signed contracts. These currency exchange control procedures imposed by the PRC government authorities may restrict
the ability of our PRC subsidiary to transfer its net assets to the Parent Company through loans, advances or cash dividends.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, 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
current PRC Enterprise Income Tax (&#8220;EIT&#8221;) Law and its implementing rules generally provide that a 10% withholding tax applies
to China-sourced income derived by non-resident enterprises for PRC enterprise income tax purposes unless the jurisdiction of incorporation
of such enterprises&#8217; shareholder has a tax treaty with China that provides for a different withholding arrangement.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, 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 a summary of changes in our working capital from December 31, 2021 to 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; text-indent: 0.5in"></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><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>&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td><td>&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="6" style="font-weight: bold; text-align: center">December 31, 2021 to</td><td style="font-weight: bold">&#160;</td></tr>
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    <td style="text-align: center">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="text-align: center">&#160;</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt; text-align: center"><b>&#160;</b></td><td style="font-weight: bold; padding-bottom: 1.5pt"><b>&#160;</b></td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="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="width: 52%; text-align: left">Total current assets</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">9,035,211</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">13,848,423</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(4,813,212</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">-34.8</td><td style="width: 1%; text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,173,923</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">45,691</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 4pt">Working capital</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">7,861,288</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">$</td><td style="border-bottom: Black 4pt double; text-align: right">12,720,191</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(4,858,903</td><td style="padding-bottom: 4pt; text-align: left">)</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; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#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 -->50<!-- 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; text-indent: 0.5in"><span>Our working capital decreased
by $4,858,903 to working capital of $</span>7,861,288 <span>as of December 31, 2022 from working capital
of $12,720,191 as of December 31, 2021. The decrease in working capital </span>was primarily attributable to a decrease in cash and cash
equivalents of approximately $7,381,000, a decrease in security deposits - current portion of approximately $94,000, a decrease in prepaid
expenses and other current assets of approximately $73,000, an increase in salary payable of approximately $97,000, an increase in accrued
liabilities and other payables of approximately $23,000 and an increase in operating lease liabilities - current portion of approximately
$49,000, offset by an increase in accounts receivable of approximately $101,000, an increase in loan receivable, net of approximately
$2,521,000, an increase in deferred offering cost of approximately $113,000 and a decrease in deferred revenue of approximately $123,000. </p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>Because
the exchange rate conversion is different for the consolidated balance sheets and the consolidated statements of cash flows, the changes
in assets and liabilities reflected on the consolidated statements of cash flows are not necessarily identical with the comparable changes
reflected on the consolidated balance sheets.</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; "><span><b>Cash
Flows for the Years Ended December 31, 2022, 2021 and 2020</b></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; text-indent: 0.5in"><span>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; ">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td>
    <td style="text-align: center">&#160;</td>
    <td colspan="2" style="border-bottom: black 1.5pt solid">
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Year Ended<br/>
    December&#160;31,</b></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>2022</b></p></td>
    <td style="text-align: center">&#160;</td>
    <td style="text-align: center">&#160;</td>
    <td colspan="2" style="border-bottom: black 1.5pt solid">
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Year Ended<br/>
    December&#160;31,</b></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>2021</b></p></td>
    <td style="text-align: center">&#160;</td>
    <td style="text-align: center">&#160;</td>
    <td colspan="2" style="border-bottom: black 1.5pt solid">
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Year Ended<br/>
    December&#160;31,</b></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>2020</b></p></td>
    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="width: 58%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net cash used in operating activities</span></td>
    <td style="width: 1%">&#160;</td>
    <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td>
    <td style="width: 11%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(5,590,567</span></td>
    <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)</span></td>
    <td style="width: 1%">&#160;</td>
    <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td>
    <td style="width: 11%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(4,096,506</span></td>
    <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)</span></td>
    <td style="width: 1%">&#160;</td>
    <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td>
    <td style="width: 11%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1,982,847</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; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net cash used in investing activities</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3,544,105</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2,593,181</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(331,944</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)</span></td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net cash provided by financing activities</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">1,750,140</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">16,471,560</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">37,250</span></td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effect of exchange rate on cash and cash equivalents</span></td>
    <td>&#160;</td>
    <td style="border-bottom: black 1.5pt solid">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">3,789</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="border-bottom: black 1.5pt solid">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1,579</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)</span></td>
    <td>&#160;</td>
    <td style="border-bottom: black 1.5pt solid">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">60,946</span></td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net increase (decrease) in cash and cash equivalents</span></td>
    <td>&#160;</td>
    <td style="border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td>
    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(7,380,743</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;)</span></td>
    <td>&#160;</td>
    <td style="border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td>
    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">9,780,294</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td>
    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2,216,595</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">)</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; text-indent: 0.5in">Net cash flow used in operating activities for the year ended December
31, 2022 was $5,590,567, which primarily reflected our net loss of approximately $5,645,376, and the changes in operating assets and liabilities
primarily consisting of a decrease in prepaid expenses and other current assets of approximately $33,000, an increase in salary payable
of approximately $108,000, an increase in accrued liabilities and other payables of approximately $252,000, offset by a decrease of operating
lease liability of approximately $390,000, a decrease in accounts receivable of approximately $104,000, a decrease in deferred revenue
of approximately $117,000, a decrease in security deposits of approximately $27,000, and the add-back of non-cash items consisting of
noncash lease expense of approximately $368,000, depreciation of approximately $66,000, bad debt expense of $100,000, foreign currency
transaction gain of approximately $147,000, and other noncash income of approximately $89,000.</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">Net cash flow used in operating
activities for the year ended December 31, 2021 was $4,096,506, which primarily reflected our net loss of approximately $7,051,000, and
the changes in operating assets and liabilities primarily consisting of an increase in accrued liabilities and other payables of approximately
$274,000, an increase in deferred revenue of approximately $122,000, and an increase in salary payable of approximately $143,000, a decrease
in security deposits of approximately $466,000, offset by an increase in accounts receivable of approximately $148,000, an increase in
prepaid expenses and other current assets of approximately $55,000, a decrease of operating lease liability of approximately $394,000,
and the add-back of non-cash items consisting of noncash lease expense of approximately $353,000, depreciation of approximately $40,000,
impairment loss on long-term investment of approximately $585,000, bad debt expense of $550,000, stock-based compensation of approximately
$1,024,000, foreign currency transaction loss of approximately $39,000 and other noncash expenses of approximately $1,000, and the deduction
of gain on extinguishment of debt of approximately $42,000, gain on lease termination of approximately $4,000.</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">Net cash flow used in operating
activities for the year ended December 31, 2020 was $1,982,847, which primarily reflected our net loss of approximately $3,182,000, and
the changes in operating assets and liabilities primarily consisting of an increase in accounts receivable of approximately $30,000, a
decrease of operating lease liability of approximately $267,000, a decrease in accrued liabilities and other payables of approximately
$124,000, a decrease in deferred revenue of approximately $64,000, and a decrease in salary payable of approximately $49,000, offset by
a decrease in security deposits of approximately $47,000, a decrease in prepaid expenses and other current assets of approximately $207,000,
and the add-back of non-cash items consisting of noncash lease expense of approximately $337,000, depreciation of approximately $55,000,
loss on equity method investment of approximately $46,000, Stock-based compensation for non-employee of approximately $1,005,000, foreign
currency transaction loss of approximately $35,000 and noncash other expense of approximately $1,000.</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">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">Net cash flow used in investing activities was $3,544,105 for the year
ended December 31, 2022 as compared to $2,593,181 for the year ended December 31, 2021 and $331,944 for the year ended December 31, 2020.
During the year ended December 31, 2022, the Company made payments for purchases of property and equipment of approximately $4,000, made
loans to third parties of $2,615,000, and made deposits for business acquisitions of $1,000,000, offset by collection of loan to third
parties of $75,000. During the year ended December 31, 2021, the Company made payments for purchase of property and equipment of approximately
$37,000, and for purchase of long-term investments of $350,000, and loan to third parties of $2,300,000, offset by collection of loan
to related party of approximately $94,000. During the year ended December 31, 2020, the Company made payments for purchase of property
and equipment of $18,000, and for purchase of long-term investments of approximately $874,000, offset by collection of loan to related
party of approximately $80,000, collection of loan to employee of approximately $174,000 and collection of investment refund of approximately
$307,000.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt; ">Net
cash flow provided by financing activities was $1,750,140 for the year ended December 31, 2022 as compared to $16,471,560 for the year
ended December 31, 2021 and $37,250 for the year ended December 31, 2020. During the year ended December 31, 2022, we received proceeds
from issuance of stocks of approximately $1,750,000. During the year ended December 31, 2021, we received proceeds from issuance of stocks
of approximately $16,637,000, offset by payment on finance lease of approximately $163,000, repayments made to related parties of approximately
$2,000. During the year ended December 31, 2020, we received proceeds from long-term loan of approximately $41,000, offset by repayments
made to related parties of approximately $4,000.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 40pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our capital requirements for
the next twelve months primarily relate to working capital requirements, including salaries, fees related to third parties&#8217; professional
services, reduction of accrued liabilities, and the development of business opportunities. These uses of cash will depend on numerous
factors including our future sales revenue and our ability to control costs. All funds received have been expended in the furtherance
of growing the business. The following trends are reasonably likely to result in a material decrease in our liquidity over the near to
long term:</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; ">
  <tr style="vertical-align: top">
    <td style="width: 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">An increase in working capital requirements to finance our current business;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; ">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; ">
  <tr style="vertical-align: top">
    <td style="width: 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">Addition of administrative and sales personnel as the business grows; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; ">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>Initial Public Offering</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; text-indent: 0.5in"><span>On
January 7, 2019, we completed our initial public offering (the &#8220;IPO&#8221;) on the NASDAQ Capital Market under the symbol of &#8220;MTC&#8221;.
We offered 1,800,000 common shares at $4 per share. Net proceeds raised by us from the initial public offering amounted to approximately
$6,478,801 after deducting underwriting discounts and commissions and other offering expenses. Out of the $6.5 million net proceeds, $500,000
was deposited into an escrow account to satisfy the initial $500,000 in potential indemnification obligations arising during an escrow
period of two years following the closing date of January 7, 2019. On January 7, 2019, we sold additional 270,000 common shares at $4
per share. Net proceeds raised by us amounted to $993,600 after deducting underwriting discounts. As a result, we raised a total of $7,472,401
from the issuance of 2,070,000 shares of common stock in January 2019.</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">Currently, we use our cash
to support our operations and to provide working capital for our ongoing operations and obligations. Considering our available cash together
with our cash inflow from the IPO, we believe that we will meet our anticipated cash requirements for the next twelve months.</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"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span><b>Registered
Direct Offering and Private Placement</b></span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>On
February 22, 2021 we entered into a Securities Purchase Agreement with certain institutional investors in connection with a registered
direct offering of 4,300,000 of the Company&#8217;s common shares, at a purchase price of $3.70 per share. The Company sold the common
shares for aggregate gross proceeds of $</span>15,910,000<span>. The net proceeds from the transactions
were $14,637,200, after deducting certain fees due to the placement agent and the Company&#8217;s transaction expenses, and will be used
for working capital and 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">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>On
December 20, 2021 we entered into a Securities Purchase Agreement with a single investor pursuant to which the investor will make a $2,000,000
investment in the Company in a Regulation S private placement. Under the terms of the Purchase Agreement, the investor will purchase 5,000,000
common shares of the Company at a purchase price of $0.40 per share. The proceeds of the transaction were $2.0 million before deducting
fees and other expenses. The Company currently intends to use the net proceeds from the transaction for growth capital and general working
capital purposes.</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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;<span>On
August 10, 2022, the Company entered into a common stock purchase agreement, with VG Master Fund SPC, under which, subject to specified
terms and conditions, the Company may sell to Investor up to $6.0 million of shares of common stock, par value $0.01 per share, from time
to time during the term of the Purchase Agreement. On August 12, 2022, the Company amended and restated the common stock purchase agreement
with VG Master Fund SPC which was initially entered into on August 10, 2022. Under the Purchase Agreement, subject to specified terms
and conditions, the Company may, from time to time during the term of the Purchase Agreement, sell to Investor up to the lesser of (a)
$5.5 million of shares of common stock, par value $0.01 per share, and (b) the maximum amount of securities the Company is permitted to
issue under its existing shelf registration statement, which was declared effective by the SEC on July 21, 2020. In consideration for
entering into the Purchase Agreement, the Company issued 53,334 shares of common stock to Investor as consideration for Investor&#8217;s
commitment to. As of December 31, 2022, the Company sold the 1,050,000 common shares for aggregate gross proceeds of $1,256,640, and will
be used for working capital and 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">

</p><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>On
August 24, 2022, the Company&#8217;s shelf registration statement for up to $300,000,000 in securities was declared effective by the SEC.
Under this shelf registration statement, the Company may offer and sell from time to time up to an aggregate of $300,000,000 of common
shares (issued separately or upon exercise of warrants), warrants, debt securities, and units of the Company&#8217;s securities.</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>On
October 29, 2022, the Company has entered into a Securities Purchase Agreement (the &#8220;Agreement 1&#8221;) with a purchaser. Pursuant
to the Agreement 1, the Company agreed to sell to this purchaser 400,000 shares of common stock for a consideration of $236,000. On December
3, 2022, the Company issued 400,000 shares to this purchaser.</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>On
November 23, 2022, the Company has entered into a Securities Purchase Agreement (the &#8220;Agreement 2&#8221;) with a purchaser. Pursuant
to the Agreement 2, the Company agreed to sell to this purchaser 500,000 shares of common stock for a consideration of $257,500. On December
7, 2022, the Company issued 500,000 shares to this purchaser.</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"><span>On February 22, 2023, the Company entered into a securities purchase agreement
(the &#8220;Agreement&#8221;) pursuant to which the Company issued an unsecured senior convertible promissory note to a non-U.S. investor
(the &#8220;Investor&#8221;). The Note will mature in 24 months after the effective date of the Note. The Note has an original principal
amount of $40,000,000 and Investor paid a purchase price of $32,000,000, reflecting an original issue discount of 20%. The transaction
contemplated under the Agreement was closed on February 22, 2023.&#160;</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;&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>On
February 24, 2023, the Company received a conversion notice from the Investor, and in accordance with the terms of the Note, the Company
issued an aggregate of 80,000,000 ordinary shares, par value $0.01 per share, to the Investor and its designees at a conversion price
of $0.50 per share, which represents the conversion floor price. The Investor waived the interest under the Note in connection with the
full conversion of the Note. The Company fulfilled all its obligations under the Note upon conversion. Immediately following the issuance
of the ordinary shares to the Investor, the Company has 85,145,041 ordinary shares issued and outstanding.</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">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>On
March 31, 2023, the Company commenced a registered direct offering of Senior Convertible Promissory Notes with an institutional investor
pursuant to a securities purchase agreement of the same date. Pursuant to the Agreement the Purchaser may purchase Senior Convertible
Promissory Notes in the aggregate original principal amount of not more than $70 million. The Notes will mature on the second anniversary
of their issuance date. The Notes have an original issue discount of 20%, resulting in an aggregate purchase price for the Offering of
up to $56 million assuming the full purchase of Notes under the Agreement. Pursuant to the Agreement, the period during which the Purchaser
may purchase the Notes began on March 31, 2023 and ends on May 11, 2023, the 30th&#160;business day after the Effective Date. There is
no minimum commitment under the Agreement.</span></p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Research and development, patents and licenses</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><i>&#160;</i></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span>Expenditures
for research and product development costs are expensed as incurred. </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>For
the years ended December 31, 2022, 2021 and 2020, research and development expenses were $828,869, $744,422, and $410,840, respectively.</span></p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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"><b>D.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Trend Information</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Other than as disclosed elsewhere
in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have
a material effect on our net revenues, income from continuing operations, profitability, liquidity or capital resources, or that would
cause reported financial information not necessarily to be indicative of future operating results or financial condition or results of
operations.</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%">
  <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"><b>E.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Critical Accounting Policies and Estimates</b></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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The discussion and analysis
of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with
the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions
are affected by management&#8217;s application of accounting policies. We believe that understanding the basis and nature of the estimates
and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.
Please refer to <b>NOTE 3 &#8211; SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b> of our consolidated financial statements for details.</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>Use of Estimates</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; text-indent: 0.5in">The preparation of financial
statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses
during the reporting period. Actual results could differ from these good faith estimates and judgments.</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: center"></p><div>

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

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

</div><div><a id="a_008"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Directors and senior management</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; 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; text-indent: 0.5in">The following table sets forth
our executive officers and directors, their ages and the positions held by them:</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: bottom">
    <td style="width: 30%; border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Name</b></span></td>
    <td style="width: 1%">&#160;</td>
    <td style="width: 10%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Age</b></span></td>
    <td style="width: 1%">&#160;</td>
    <td style="width: 58%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Position</b></span></td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Xiangdong Wen&#160;<sup>(1) (2)</sup></span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">38</span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chairman of the Board and Chief Executive Officer</span></td></tr>
  <tr style="vertical-align: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Min Kong&#160;<sup>(1) </sup></span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">34</span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief Financial Officer</span></td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Qingshun Meng&#160;<sup>(1) (3)&#160;(5)&#160;(6) (7)</sup></span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">63</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: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Hinman Au&#160;<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">57</span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director</span></td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Dan Fu<sup>(1) (4)&#160;(5) (6) (7)</sup></span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">36</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: bottom; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shufang Lai<sup>(1) (3)&#160;(5)&#160;(6) (7)</sup></span></td>
    <td>&#160;</td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">36</span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Independent Director, Chairman of Audit Committee</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)&#160;</span></td>
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  <tr style="vertical-align: top">
    <td>&#160;</td>
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  <tr style="vertical-align: top">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)&#160;</span></td>
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  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)&#160;</span></td>
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  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(4)&#160;</span></td>
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  <tr style="vertical-align: top">
    <td>&#160;</td>
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  <tr style="vertical-align: top">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(5)&#160;</span></td>
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  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(6)&#160;</span></td>
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  <tr style="vertical-align: top">
    <td>&#160;</td>
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  <tr style="vertical-align: top">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">(7)&#160;</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">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Xiangdong Wen </i></b>has
served as the Chairman of the Board of MMTEC since January 2018 and has served as the Chief Executive Officer of MMTEC since June 2020.
Mr. Wen founded Gujia in 2015 and was Gujia&#8217;s Chief Executive Officer between June 2015 and January 2016. Mr. Wen has also served
as Gujia&#8217;s executive director since June 2015.&#160; Between May 2012 and May 2015, Mr. Wen served as Chief Executive Officer of
Jiazi Investment Co., Ltd, an investment management company. Between February 2015 and June 2015, Mr. Wen served as Chief Operating Officer
of Beijing Dongfangjuhe Technology Co., Ltd, providing technology solutions to the broker/dealer industry. Mr. Wen holds a Bachelor&#8217;s
degree in business management from Communication University of China.</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; text-indent: 0.5in"><b><i>Min Kong</i></b> has
served as the Chief Financial Officer of MMTEC since January 2018. Between June 2015 and January 2018, Mr. Kong served as the Institutional
Business Director of Gujia (Beijing) Technology Co., Ltd. Between February 2014 and February 2015, Mr. Kong served as Data Analyst Manager
of American Dental Solutions, LLC. Between April 2012 and January 2013, Mr. Kong served as Marketing Manager of Yiwu Yi Jue Trading Company.
Mr. Kong received his MBA degree from Missouri State University.</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"><b><i>Qingshun Meng </i></b>has
served as an Independent Director of MMTEC since April 2018. Mr. Meng has served as management professor at the Communication University
of China since 2004. Mr. Meng holds a Bachelor of Science degree in Corporate Management from Shandong Institute of Mining and Technology,
and a Bachelor of Science degree in Mining Engineering from Liaoning Technical University. Mr. Meng was member of the comprehensive brand
management expert committee of China Association for Quality.</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"><b><i>Hinman Au</i></b> has
served as a Director of MMTEC since October 2019. Since July 2016 Hinman Au served as Chief Executive Officer of MM iGlobal, Inc., a registered
broker-dealer. From September 2012 to July 2016, he held the offices of Chief Executive Officer of Tradefield Securities, Inc., a registered
broker-dealer. From August 2014 to August 2016, he held the position of Chief Executive Officer of American Education Center, a publicly
traded company (OTCQB). Hinman Au holds a Bachelor of Science degree in Computer Science from Lehman College (CUNY, 1987), a Master of
Science degree in Electrical Engineering from State University of New York at Stony Brook (1989), and a Master of Business Administration
degree from Baruch College (CUNY, 1992).</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></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 -->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-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"><b>Dan Fu</b> has served as
the Marketing Department Manager at Beijing Yingding Education Technology Co., Ltd. from July 2015 to July 2016. Ms. Fu then served as
Brand Department Manager at Baoding Huazhong Group from August 2016 to March 2021. York at Stony Brook (1989), and a Master of Business
Administration degree from Baruch College (CUNY, 1992).</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"><b><i>Shufang Lai</i></b>
has served as an Independent Director of MMTEC since June, 2020. Mrs. Lai holds the title of Assistant Professor of Finance at Southern
University of Science and Technology (PRC). Shufang Lai holds a Bachelor&#8217;s degree in Accounting from Communication University of
China (2008) and a Ph.D degree in Accounting from The Chinese University of Hong Kong (2016). York at Stony Brook (1989), and a Master
of Business Administration degree from Baruch College (CUNY, 1992).</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">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.</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"><i>Limitation on Liability and Other Indemnification Matters</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Companies Law does not
limit the extent to which 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 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.</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">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.</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%">
  <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"><b>B.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Compensation</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>Executive Compensation</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-indent: 0.5in">The following table shows the annual compensation
paid by us for the years ended December 31, 2022, 2021 and 2020:</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 11%; text-align: right">2020</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">32,860</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">-</td><td style="width: 1%; text-align: left">&#160;</td><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">$</td><td style="text-align: right">170,724</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right">173,288</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right">314,075</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: right">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Min Kong, CFO</td><td>&#160;</td>
    <td style="text-align: right">2020</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">40,486</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">5,184</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">45,670</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: right">2021</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">99,206</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">313,250</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">5,503</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">417,959</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right">108,342</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">8,981</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">117,323</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-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">Under Chinese law, 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 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.</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: 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 -->56<!-- 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"><b>Director Compensation </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; text-indent: 0.5in">All directors hold office
until the next annual meeting of shareholders at which their respective class of directors is re-elected and until their successors have
been duly elected and qualified. There are no family relationships among our directors or executive officers. Officers are elected by
and serve at the discretion of the Board of Directors. Employee directors do not receive any compensation for their services. Non-employee
directors are entitled to receive $10,000 per year for serving as directors and may receive option grants from our company. In addition,
non-employee directors are entitled to receive compensation for their actual travel expenses for each Board of Directors meeting attended.
We have entered into independent director agreements with our directors which agreements set forth the terms and provisions of their engagement.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; 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">None of our officers currently
serves, or has served during the last completed fiscal year, on the compensation committee or board of directors of any other entity that
has one or more officers serving as a member of our board of directors.</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%">
  <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"><b>C.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Board Practices</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><i>Composition of Board; Risk Oversight</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Board of Directors presently
consists of seven directors. Pursuant to our Memorandum and Articles of Association, our officers will be elected by and serve at the
discretion of the board. A director will be removed from office automatically if, among other things, the director becomes bankrupt or
makes any arrangement or composition with his creditors, or becomes physically or mentally incapable of acting as director. Except as
noted above, there are no family relationships between any of our executive officers and directors. Officers are elected by, and serve
at the discretion of, the Board of Directors. Our Board of Directors shall hold meetings on at least a quarterly basis.</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; text-indent: 0.5in">As a smaller reporting company
under the NASDAQ rules we are only required to maintain a Board of Directors comprised of at least 50% independent directors, and an audit
committee of at least two members, comprised solely of independent directors who also meet the requirements of Rule 10A-3 under the Securities
Exchange Act of 1934. 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.</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">Our Board of Directors 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
Chief Executive Officer serve on the board as he plays key roles in the risk oversight of our company. As a smaller reporting company
with a small Board of Directors, we believe it is appropriate to have the involvement and input of all of our directors in risk oversight
matters.</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; text-indent: 0.5in"><i>Duties of Directors</i></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">Under BVI law, our directors
have a duty to act honestly, in good faith and with a view to 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 Memorandum and Articles of Association. We have the right to seek damages if a duty
owed by our directors is breached. &#160;A director is not required to hold shares as a qualification to office. The functions and powers
of our Board of Directors include, among others:</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%">
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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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

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

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

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our board has reviewed the
independence of our directors, applying the NASDAQ independence standards. Based on this review, the board determined that each of Qingshun
Meng, Dan Fu and Shufang Lai 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.</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: 61; Value: 1 --><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-indent: 0.5in"><i>Board Committees</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Currently, three committees
have been established under the board: the Audit Committee, the Compensation Committee and the Nominating Committee.</p><div>

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

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

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Audit Committee will be responsible for, among
other matters:</p><div>

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

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

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

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

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">coordinating the oversight by our Board of Directors of our code of business conduct and our disclosure controls and procedures,</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">establishing procedures for the confidential and or anonymous submission of concerns regarding accounting, internal controls or auditing matters, and</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing and approving related-party transactions.</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Audit Committee consists
of Shufang Lai (Chair), Qingshun Meng and Dan Fu 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 of Directors has determined that Mr. Shufang Lai 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.</p><div>

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

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

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Compensation Committee will be responsible
for, among other matters:</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing and approving, or recommending to the Board of Directors to approve the compensation of our CEO and other executive officers and directors,</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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">reviewing key employee compensation goals, policies, plans and programs,</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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">administering incentive and equity-based compensation,</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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">reviewing and approving employment agreements and other similar arrangements between us and our executive officers, and</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Compensation Committee
consists of Dan Fu (Chair), Shufang Lai and Qingshun Meng. 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.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Nominating Committee will be responsible for,
among other matters:</p><div>

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

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

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">reviewing and making recommendations regarding the structure and composition of our Board of Directors and the Board of Directors committees,</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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">developing and recommending to the Board of Directors corporate governance principles and practices;</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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">reviewing and monitoring our company&#8217;s Code of Business Conduct and Ethics, and</span></td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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">overseeing the evaluation of our company&#8217;s management.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Nominating Committee consists
of consists of Qingshun Meng (Chair), Dan Fu and Shufang Lai. 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.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><i>Code of Business Conduct and Ethics</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Board of Directors 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. We intend to disclose on our website any amendments to the Code of Business Conduct and Ethics and any waivers of the
Code of Business Conduct and Ethics that apply to our principal executive officer, principal financial officer, principal accounting officer,
controller, or persons performing similar functions.</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: 63; 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 -->59<!-- 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-indent: 0.5in"><i>Interested Transactions</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A director may vote, attend
a Board of Directors 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 of Directors or otherwise contained
in the minutes of a meeting or a written resolution of the Board of Directors or any committee of the Board of Directors 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.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The directors may receive
such remuneration as our Board of Directors 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 of Directors
or committees of our Board of Directors 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 of Directors 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.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">A director is not required to hold shares as a
qualification to office.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><i>Limitation on Liability and Other Indemnification
Matters</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">BVI law 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 BVI courts to be contrary to public policy, such as to provide indemnification against
civil fraud or the consequences of committing a crime. Under our Memorandum and Articles of Association, we may indemnify our directors,
officers and liquidators against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and
reasonably incurred in connection with civil, criminal, administrative or investigative proceedings to which they are party or are threatened
to be made a party by reason of their acting as our director, officer or liquidator. To be entitled to indemnification, these persons
must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings, they
must have had no reasonable cause to believe their conduct was unlawful. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted for our directors or officers 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 as a matter
of United States law.<b>&#160;</b></p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Employees</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; 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; text-indent: 0.5in">The table below provides information
as to the total number of employees at the end of the last three fiscal years. We have no contracts or collective bargaining agreements
with labor unions and have never experienced work stoppages due to labor dispute. We consider our relations with our employees to be good.</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="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="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><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)">
    <td style="width: 64%">Number of Employees</td><td style="width: 1%">&#160;</td>
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  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.5in"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>E.</b></span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">See Item 7 below.</p><div>

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

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

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->60<!-- 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><div><a id="a_009"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b></span></td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; 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; text-indent: 0.5in">The following table sets forth
certain information regarding beneficial ownership of our shares by each person who is known by us to beneficially own more than 5% of
our shares. The table also identifies the share ownership of each of our directors, each of our named executive officers, and all directors
and officers as a group. Except as otherwise indicated, the shareholders listed in the table have sole voting and investment powers with
respect to the shares indicated. Our major shareholders do not have different voting rights than any other holder of our shares.</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">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 April 13, 2023. 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 common 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 common shares held by them
are located in the United States. Applicable percentage ownership is based on 85,145,041 common shares outstanding as of April 13, 2023.
Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o MM Future Technology Limited.,Room 2302,
23rd Floor, FWD Financial Center, 308 Des Voeux Road Central, Sheung Wan, Hong Kong.</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="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">
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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"><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; ">
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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>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Shufang Lai *</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"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">**</span></td><td style="text-align: left">&#160;</td></tr>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td>&#160;</td><td>&#160;</td>
    <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</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>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table><div>



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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Officer
and/or director of our company</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; 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">Represent
(i) 309,600 shares owned by Mr. Wen and (ii) 54,001 shares owned by MMBD Information Technology Limited, of which Mr. Wen holds 33.33%.
This takes into account the 1-for-10 reverse stock split on the Company&#8217;s common stock that was effectuated on July 13, 2022. MMBD
Information Technology Limited, a Hong Kong corporation with the mailing address of Rm 18D 27/F Ho King Comm. Ctr., 2-16 Fayuen St. Mongkok,
Hong Kong 999077 China.</span></td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;&#160;</p><div>

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

</div><!-- Field: Page; Sequence: 65; 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: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of April 13, 2023, there
were 39 registered holders of record of our common shares, based upon information received from our stock transfer agent. However, this
number does not include beneficial owners whose shares were held of record by nominees or broker dealers. 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.</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Related Party Transactions</b></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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>Due to Related Parties</b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of December 31, 2022 and 2021, balances of
due to related parties were $0.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During fiscal year ended
December 31, 2020, Hinman Au, a director of the Company, paid $4,000 expenses on behalf of the Company.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 40pt"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>Shareholders&#8217; Contribution </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; text-indent: 0.5in">During the years ended December
31, 2022, 2021 and 2020, there were no shareholder contributions to the Company for working capital needs.</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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"><b>C.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Interests of Experts and Counsel</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not required.</p><div>

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

</div><div><a id="a_010"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 8. FINANCIAL INFORMATION</b></p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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"><b>A.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Consolidated Statements and Other Financial Information.</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">See Item 18 for our audited consolidated financial
statements.</p><div>

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

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

</div><!-- Field: Page; Sequence: 66; 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 -->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; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b>Legal Proceedings</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; text-indent: 0.5in">In the normal course of business, MM Global is
engaged in various trading and brokerage activities on a principal and agency basis through a clearing broker. As a regulated FINRA broker-dealer
MM Global is subject to regulatory trading inquiries and investigations to determine whether any violations of federal securities or FINRA
rules may have occurred. As such, MM Global has responded to FINRA inquires and continues to be subject to an open matter. MM Global submits
Letter of Acceptance, Waiver, and Consent for the purpose of proposing a settlement of the alleged rule violations on September 9, 2022.
Without admitting or denying the findings by FINRA related to Case Number 2019062623, the Company was censured, fined $450.000. Two individuals&#8217;
registration capacities were suspended for 45 days, fined $20,000 and $5,000 respectively. The Company elect to pay the fine via a 36
months&#8217; installment plan with $38,250 installment fee. As of December 31, 2022 the Company has total unpaid balance of $334,800
and recorded as &#8220;Accounts Payable&#8221; and non-current portion as &#8220;Accrue Liabilities, Non-current&#8221; in consolidation
financial statement.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Other than MM Global, we are
currently not involved in any legal proceedings; nor are we aware of any claims that could have a material adverse effect on our business,
financial condition, results of operations or cash flows.</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"><b>Dividend Policy</b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The holders of shares of our
common shares are entitled to dividends out of funds legally available when and as declared by our board of directors. Our board of directors
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 subsidiary and other holdings and investments. In addition, the operating companies 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 common shares are entitled to receive, ratably, the net assets available to shareholders after
payment of all creditors.</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%">
  <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"><b>B.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Significant Changes</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; 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; text-indent: 0.5in">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.</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><div><a id="a_011"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 9. THE OFFER AND LISTING</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Offer and Listing Details</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our shares have been listed
on the NASDAQ Stock Market under the symbol &#8220;MTC&#8221; since January 8, 2019 following the completion of our initial public offering.</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%">
  <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"><b>B.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Plan of Distribution</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not Applicable.</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>C.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Markets</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; 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; text-indent: 0.5in">Our shares have been listed
on the NASDAQ Stock Market under the symbol &#8220;MTC&#8221; since January 8, 2019 following the completion of our initial public offering.</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: 67; 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 -->63<!-- 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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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"><b>D.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Selling Shareholders</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not Applicable.</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>E.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Dilution</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not Applicable.</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>F.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Expenses of the Issue</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not Applicable.</p><div>

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

</div><div><a id="a_012"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 10. ADDITIONAL INFORMATION</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><b>&#160;</b></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>A.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Share Capital</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not Applicable.</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>B.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Memorandum and Articles of Association</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; 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; text-indent: 0.5in">The information required by
Item 10.B of Form 20-F is included in the section titled &#8220;Description of Share Capital&#8221; in our Registration Statement on Form
F-1 initially filed with the SEC on October 22, 2018, and subsequently updated (File No.: 333-227934), which section is incorporated herein
by reference.</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%">
  <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"><b>C.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Material Contracts</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; 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; text-indent: 0.5in">The information required by
Item 10.B of Form 20-F is included in the sections titled &#8220;Our Business,&#8221; &#8220;Directors and Executive Officers,&#8221;
&#8220;Related Party Transactions,&#8221; and &#8220;Underwriting&#8221; in in our Registration Statement on Form F-1 initially filed
with the SEC on October 22, 2018, and subsequently updated (File No.: 333-227934), which section is incorporated herein by reference.</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>On
February 22, 2021 we entered into a Securities Purchase Agreement with certain institutional investors in connection with a registered
direct offering of 4,300,000 of the Company&#8217;s common shares, at a purchase price of $3.70 per share. The Company sold the common
shares for aggregate gross proceeds of $</span>15,910,000<span>. The net proceeds from the transactions
were $14,637,200, after deducting certain fees due to the placement agent and the Company&#8217;s transaction 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"><span>On
December 20, 2021 we entered into a Securities Purchase Agreement with a single investor pursuant to which the investor will make a $2,000,000
investment in the Company in a Regulation S private placement. Under the terms of the Purchase Agreement, the investor will purchase 5,000,000
common shares of the Company at a purchase price of $0.40 per share. The gross proceeds of the transaction were $2,000,000 before deducting
fees and other 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"><span style="font-family: Times New Roman, Times, Serif; ">On
August 10, 2022, the Company entered into a common stock purchase agreement, with VG Master Fund SPC, under which, subject to specified
terms and conditions, the Company may sell to Investor up to $6.0 million of shares of common stock, par value $0.01 per share, from
time to time during the term of the Purchase Agreement. On August 12, 2022, the Company amended and restated the common stock purchase
agreement with VG Master Fund SPC which was initially entered into on August 10, 2022. Under the Purchase Agreement, subject to specified
terms and conditions, the Company may, from time to time during the term of the Purchase Agreement, sell to Investor up to the lesser
of (a) $6.0 million of shares of common stock, par value $0.01 per share, and (b) the maximum amount of securities the Company is permitted
to issue under its existing shelf registration statement, which was declared effective by the SEC on July 21, 2020. In consideration
for entering into the Purchase Agreement, the Company issued 53,334 shares of common stock to Investor as consideration for Investor&#8217;s
commitment to. As of December 31, 2022, the Company sold the 1,050,000 common shares for aggregate gross proceeds of $1,256,640, and
will be used for working capital and general corporate purposes.</span></p><div>

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

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

</div><!-- Field: Page; Sequence: 68; 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 -->64<!-- 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-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>D.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Exchange controls</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.5in"><b>&#160;</b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; 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">Under BVI 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.</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>China Exchange Control</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><i>Foreign Currency
Exchange</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">The
principal regulations governing foreign currency exchange in China are the Foreign Exchange Administration Regulations (1996), as amended
on August&#160;5, 2008, the Administration Rules of the Settlement, Sale and Payment of Foreign Exchange (1996) and the Interim Measures
on Administration on Foreign Debts (2003). Under these regulations, Renminbi is freely convertible for current account items, including
the distribution of dividends, interest payments, trade and service-related foreign exchange transactions, but not for most capital account
items, such as direct investment, loans, repatriation of investment and investment in securities outside China, unless the prior approval
of SAFE or its local counterparts is obtained. In addition, any loans to an operating subsidiary in China that is a foreign invested enterprise,
cannot, in the aggregate, exceed the difference between its respective approved total investment amount and its respective approved registered
capital amount. Furthermore, any foreign loan must be registered with SAFE or its local counterparts for the loan to be effective. Any
increase in the amount of the total investment and registered capital must be approved by the China Ministry of Commerce or its local
counterpart. We may not be able to obtain these government approvals or registrations on a timely basis, if at all, which could result
in a delay in the process of making these loans.</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; text-indent: 0.5in; ">The
dividends paid by the subsidiary 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 Chinese governmental authorities.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b><i>Circular 37</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">On
July&#160;4, 2014, SAFE issued Circular 37, which became effective as of July&#160;4, 2014. According to Circular 37, Chinese 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 Chinese
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.</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; ">Moreover,
Circular 37 applies retroactively. As a result, Chinese residents who have contributed domestic assets or interests to a SPV, but failed
to complete foreign exchange registration of overseas investments as required prior 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&#160;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.</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; ">Chinese
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 Chinese company owned by Chinese residents in the future, such Chinese residents
will be subject to the registration procedures described in Circular 37.</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: 69; 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 -->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; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b><i>Regulations on
Offshore Parent Holding Companies&#8217; Direct Investment in and Loans to Their PRC Subsidiaries</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">An
offshore company may invest equity in a Chinese company, which will become the Chinese 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.</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; ">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, Ministry of Commerce and SAFE.</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; ">Shareholder
loans made by offshore parent holding companies to their Chinese subsidiaries are regarded as foreign debts in China for regulatory purpose,
which is subject to a number of Chinese laws and regulations, including the Chinese 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.</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; ">Under
these regulations, the shareholder loans made by offshore parent holding companies to their Chinese subsidiaries shall be registered with
SAFE. Furthermore, the total amount of foreign debts that can be borrowed by such Chinese subsidiaries, including any shareholder loans,
shall not exceed the difference between the total investment amount and the registered capital amount of the Chinese subsidiaries, both
of which are subject to the governmental approval.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b><i>Regulation of Dividend
Distribution</i></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; text-indent: 0.5in; ">The
principal regulations governing the distribution of dividends by foreign holding companies include the Company Law of China (1993), as
amended in 2013, the Foreign Investment Enterprise Law (1986), as amended in 2000, and the Administrative Rules under the Foreign Investment
Enterprise Law (1990), as amended respectively in 2001 and 2014.</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; ">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 Chinese 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.</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%">
  <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"><b>E.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Taxation</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following sets forth the
material BVI, Chinese and U.S. federal income tax matters related to an investment in our common shares. It is directed to U.S. Holders
(as defined below) of our common shares and is based on laws and relevant interpretations thereof in effect as of the date of this report,
all of which are subject to change. This description does not deal with all possible tax consequences relating to an investment in our
common shares, such as the tax consequences under state, local and other tax laws. Ogier, our counsel as to the BVI law, advised us on
the BVI taxation matters and their opinion is set forth in the discussion below. The following brief description applies only to U.S.
Holders (defined below) that hold common shares as capital assets and that have the U.S. dollar as their functional currency. This brief
description is based on the tax laws of the United States in effect as of the date of this report and on U.S. Treasury regulations in
effect or, in some cases, proposed, as of the date of this report, as well as judicial and administrative interpretations thereof available
on or before such date. All of the foregoing authorities are subject to change, which change could apply retroactively and could affect
the tax consequences described below. The brief description below of the U.S. federal income tax consequences to &#8220;U.S. Holders&#8221;
will apply to you if you are a beneficial owner of common shares and you are, for U.S. federal income tax purposes:</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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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">an individual who is a citizen or resident of the United States,</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 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">a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the United States, any state thereof or the District of Columbia,</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 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">an estate whose income is subject to U.S. federal income taxation regardless of its source, or</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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">a trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons for all substantial decisions or (2) 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: 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: 70; 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 -->66<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">According to the Enterprise
Income Tax Law of PRC (the &#8220;EIT Law&#8221;), which was promulgated on March&#160;16, 2007, last amended in February 2017 and became
effective as of January&#160;1, 2008, the income tax for both domestic and foreign-invested enterprises is at a uniform rate of 25%. The
Regulation on the Implementation of Enterprise Income Tax Law of the PRC (the &#8220;EIT Rules&#8221;) was promulgated on December&#160;6,
2007 and became effective on January&#160;1, 2008. On April 14, 2008, the Chinese Ministry of Science and Technology, Ministry of Finance
and State Administration of Taxation enacted the Administrative Measures for Certifying High and New Technology Enterprises (the &#8220;Certifying
Measures&#8221;), which retroactively became effective on January 1, 2008 and was amended on January 29, 2016. In the years ended December
31, 2020 and 2019, Gujia was recognized as small low-profit enterprises and received a preferential income tax rate of 5%. Under the EIT
Law, an enterprise established outside of China with a &#8220;de facto management body&#8221; within China is considered a &#8220;resident
enterprise&#8221;, which means that it is treated in a manner similar to a Chinese enterprise for enterprise income tax purposes. Although
the implementation rules of the EIT Law define &#8220;<i>de facto</i>&#160;management body&#8221; as a managing body that exercises substantive
and overall management and control over the production and business, personnel, accounting books and assets of an enterprise, the only
official guidance for this definition currently available is set forth in Circular 82 issued by the State Administration of Taxation,
at April 22, 2009 which provides that a foreign enterprise controlled by a PRC company or a PRC company group will be classified as a
&#8220;resident enterprise&#8221; with its &#8220;<i>de facto</i>&#160;management bodies&#8221; located within China if the following
criteria are satisfied:</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%">
  <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">the place where the senior management and core management departments that are in charge of its daily operations perform their duties is mainly located in the PRC,</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 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">its financial and human resources decisions are made by or are subject to approval by persons or bodies in the PRC,</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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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">its major assets, accounting books, company seals, and minutes and files of its board and shareholders&#8217; meetings are located or kept in the PRC, and</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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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">more than half of the enterprise&#8217;s directors or senior management with voting rights frequently reside in the PRC.</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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We do not believe that we
meet the conditions outlined in the preceding paragraph since we do not have a PRC enterprise or enterprise group as our primary controlling
shareholder. In addition, we are not aware of any offshore holding companies with a corporate structure similar to our company that has
been deemed a PRC &#8220;resident enterprise&#8221; by the PRC tax authorities.</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">If we are deemed a China resident
enterprise, we may be subject to the EIT at the rate of 25% on our global income, except that the dividends we receive from our Chinese
subsidiaries may be exempt from the EIT to the extent such dividends are deemed dividends among qualified resident enterprises. If we
are considered a resident enterprise and earn income other than dividends from our Chinese subsidiaries, a 25% EIT on our global income
could significantly increase our tax burden and materially and adversely affect our cash flow and profitability.</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"><i>PRC Value Added Tax (&#8220;VAT&#8221;)</i></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">Pursuant to the Provisional
Regulations on Value-added Tax (VAT) of the PRC last amended on February 6, 2016 and became effective from January 1, 2009 and the Detailed
Rules for the Implementation of the Provisional Regulation of China on VAT last amended on October 28, 2011 and effective as of November
1, 2011, all entities or individuals in the PRC engaging in the sale of goods, the provision of processing services, repairs and replacement
services, and the importation of goods are required to pay VAT.</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">According to the requirements
of the Notice of the Ministry of Finance and the State Administration of Taxation on Implementing the Pilot Program of Replacing Business
Tax with Value-Added Tax in an All-round Manner (Cai Shui [2016] Document No. 36) and the annexes thereto, namely The Measures for Implementing
the Pilot Program of Replacing Business Tax with Value-Added Tax, the Provisions on Relevant Matters concerning the Pilot Program of Replacing
Business Tax with Value-Added Tax, the Provisions on the Transitional Policies for the Pilot Program of Replacing Business Tax with Value-Added
Tax, and the Provisions on the Application of VAT Zero Rate and VAT Exemption Policy to Cross-border Taxable Activities, effective from
1 May 2016, the pilot program of replacing business tax with value-added tax was implemented across the country, and the payment of business
tax for taxpayers in the construction industry, the real estate industry, the financial industry, and the living service industry shall
be replaced with the payment of value-added tax at 6% for general&#160;VAT payer, and 3% for small-scale VAT payer. Gujia was identified
as a general&#160;VAT payer on December 1, 2021.</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: center"></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>BVI Taxation</i></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">The company and all distributions,
interest and other amounts paid by the company in respect of the common shares of the company to persons who are not resident in the BVI
are exempt from all provisions of the Income Tax Ordinance in the BVI.</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">No estate, inheritance, succession
or gift tax, rate, duty, levy or other charge is payable by persons who are not resident in the BVI with respect to any common shares,
debt obligations or other securities of the company.</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">All instruments relating to
transactions in respect of the common shares, debt obligations or other securities of the company and all instruments relating to other
transactions relating to the business of the company are exempt from payment of stamp duty in the BVI provided that they do not relate
to real estate in the BVI.</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">There are currently no withholding
taxes or exchange control regulations in the BVI applicable to the company or its shareholders.</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"><i>United States Federal Income
Taxation</i></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">The following does not address
the tax consequences to any particular investor or to persons in special tax situations such as:</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%">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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

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

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

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

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

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

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

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

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 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">persons holding our common shares as part of a straddle, hedging, conversion or integrated transaction,</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 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">persons that actually or constructively own 10% or more of our common shares,</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 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">persons who acquired our common shares pursuant to the exercise of any employee common share option or otherwise as consideration, or</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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">persons holding our common shares through partnerships or other pass-through entities.</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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Prospective purchasers are
urged to consult their tax advisors about the application of the U.S. Federal tax rules to their particular circumstances as well as the
state, local, foreign and other tax consequences to them of the purchase, ownership and disposition of our common shares.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>Taxation of Dividends and
Other Distributions on our Common Shares</i></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">Subject to the passive foreign
investment company rules discussed below, the gross amount of distributions made by us to you with respect to the common shares (including
the amount of any taxes withheld therefrom) will generally be includable&#160;in your gross income as dividend income on the date of receipt
by you, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under
U.S. federal income tax principles). With respect to corporate U.S. Holders, to the extent that the amount of the distribution exceeds
our current and accumulated earnings and profits (as determined under U.S. federal income tax principles), it will be treated first as
a tax-free return of your tax basis in your common shares, and to the extent the amount of the distribution exceeds your tax basis, the
excess will be taxed as capital gain. We do not intend to calculate our earnings and profits under U.S. federal income tax principles.
Therefore, a U.S. Holder should expect that a distribution will be treated as a dividend even if that distribution would otherwise be
treated as a non-taxable return of capital or as capital gain under the rules described above. The dividends will not be eligible for
the dividends-received deduction allowed in respect of dividends received from other U.S. corporations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; 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">With respect to non-corporate
U.S. Holders, including individual U.S. Holders, dividends will be taxed at the lower capital gains rate applicable to qualified dividend
income,&#160;provided that (1)&#160;the common shares are readily tradable on an established securities market in the United States, or
we are eligible for the benefits of an approved qualifying income tax treaty with the United States that includes an exchange of information
program, (2)&#160;we are not a passive foreign investment company (as discussed below) for either our taxable year in which the dividend
is paid or the preceding taxable year, and (3)&#160;certain holding period requirements are met. Under U.S. Internal Revenue Service authority,
our common shares will be considered for purpose of clause (1)&#160;above to be readily tradable on an established securities market in
the United States if they are listed on the NASDAQ Capital Market. You are urged to consult your tax advisors regarding the availability
of the lower rate for dividends paid with respect to our common shares, including the effects of any change in law after the date of this
report.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; 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">Dividends on our common shares
will constitute foreign source income for foreign tax credit limitation purposes. If the dividends are taxed as qualified dividend income
(as discussed above), the amount of the dividend considered for purposes of calculating the foreign tax credit limitation will be limited
to the gross amount of the dividend, multiplied by the reduced rate divided by the highest rate of tax normally applicable to dividends.
The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose,
dividends distributed by us with respect to our common shares will constitute &#8220;passive category income&#8221; but could, in the
case of certain U.S. Holders, constitute &#8220;general category income.&#8221;</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"><i>Taxation of Dispositions
of Common Shares</i></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">Subject to the passive foreign
investment company rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of
common shares equal to the difference between the amount realized (in U.S. dollars) for the share and your tax basis (in U.S. dollars)
in the common shares. The gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder, including an individual U.S.
Holder, who has held the common shares for more than one year, you will be eligible for the capital gains tax rate of 20% (or lower for
individuals in lower tax brackets). The deductibility of capital losses is subject to limitations. Any such gain or loss that you recognize
will generally be treated as United States source income or loss for foreign tax credit limitation purposes.</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"><i>Passive Foreign Investment
Company</i></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">Based on our current and anticipated
operations and the composition of our assets, we&#160;do not expect to be a passive foreign investment company, or PFIC, for U.S. federal
income tax purposes for our current taxable year ending December&#160;31, 2022. Our actual PFIC status for the current taxable years ending
December&#160;31, 2022 will not be determinable until after the close of such year and, accordingly, there is no guarantee that we will
not be a PFIC for the current year. PFIC status is a factual determination for each taxable year which cannot be made until the close
of the taxable year. A non-U.S. corporation is considered a PFIC for any taxable year if either:</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 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">at least 75% of its gross income is passive income, or</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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">at least 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income (the &#8220;asset test&#8221;).</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: 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: 73; 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 -->69<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We will be treated as owning
our proportionate share of the assets and earning our proportionate share of the income of any other corporation in which we own, directly
or indirectly, at least 25% (by value) of the stock. We must make a separate determination each year as to whether we are a PFIC. As a
result, our PFIC status may change. In particular, because the value of our assets for purposes of the asset test will generally&#160;be
determined based on the market price of our common shares, our PFIC status will depend in large part on the market price of our common
shares. Accordingly, fluctuations in the market price of the common shares may cause us to become a PFIC. In addition, the application
of the PFIC rules is subject to uncertainty in several respects and the composition of our income and assets will be affected by how,
and how quickly, we spend the cash we raise in this offering. If we are a PFIC for any year during which you hold common shares, we will
continue to be treated as a PFIC for all succeeding years during which you hold common shares. However, if we cease to be a PFIC, you
may avoid some of the adverse effects of the PFIC regime by making a &#8220;deemed sale&#8221; election with respect to the common shares.</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">If we are a PFIC for any taxable
year during which you hold common shares, you will be subject to special tax rules with respect to any &#8220;excess distribution&#8221;
that you receive and any gain you realize from a sale or other disposition (including a pledge) of the common shares, unless you make
a &#8220;mark-to-market&#8221; election as discussed below. Distributions you receive in a taxable year that are greater than 125% of
the average annual distributions you received during the shorter of the three preceding taxable years or your holding period for the common
shares will be treated as an excess distribution. Under these special tax rules:</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 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">the excess distribution or gain will be allocated ratably over your holding period for the common shares,</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 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">the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <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">the amount allocated to each other year will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year. The tax liability for amounts allocated to such years cannot be offset by any net operating losses for such years, and gains realized on the sale of the common shares cannot be treated as capital, even if you hold the common shares as capital assets.</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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A U.S. Holder of &#8220;marketable
stock&#8221; (as defined below) in a PFIC may make a mark-to-market election for such stock to elect out of the tax treatment discussed
above. If you make a mark-to-market election for the common shares, you will include in income each year an amount equal to the excess,
if any, of the fair market value of the common shares as of the close of your taxable year over your adjusted basis in such common shares.
You are allowed a deduction for the excess, if any, of the adjusted basis of the common shares over their fair market value as of the
close of the taxable year. However, deductions are allowable only to the extent of any net mark-to-market gains on the common shares included
in your income for prior taxable years. Amounts included in your income under a mark-to-market election, as well as gain on the actual
sale or other disposition of the common shares, are treated as ordinary income. Ordinary loss treatment also applies to the deductible
portion of any mark-to-market loss on the common shares, as well as to any loss realized on the actual sale or disposition of the common
shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such common shares.
Your basis in the common shares will be adjusted to reflect any such income or loss amounts. If you make a valid mark-to-market election,
the tax rules that apply to distributions by corporations that are not PFICs would apply to distributions by us, except that the lower
applicable capital gains rate for qualified dividend income discussed above under &#8220;Taxation of Dividends and Other Distributions
on our Common Shares&#8221; generally would not apply.&#160;</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The mark-to-market election
is available only for &#8220;marketable stock&#8221;, which is stock that is traded in other than&#160;<i>de minimis</i>&#160;quantities
on at least 15 days during each calendar quarter (&#8220;regularly traded&#8221;) on a qualified exchange or other market (as defined
in applicable U.S. Treasury regulations), including the NASDAQ Capital Market. If the common shares are regularly traded on the NASDAQ
Capital Market and if you are a holder of common shares, the mark-to-market election would be available to you were we to be or become
a PFIC.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: 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: 74; 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 -->70<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Alternatively, a U.S. Holder
of stock in a PFIC may make a &#8220;qualified electing fund&#8221; election with respect to such PFIC to elect out of the tax treatment
discussed above. A U.S. Holder who makes a valid qualified electing fund election with respect to a PFIC will generally include in gross
income for a taxable year such holder&#8217;s pro rata share of the corporation&#8217;s earnings and profits for the taxable year. However,
the qualified electing fund election is available only if such PFIC provides such U.S. Holder with certain information regarding its earnings
and profits as required under applicable U.S. Treasury regulations. We do not currently intend to prepare or provide the information that
would enable you to make a qualified electing fund election. If you hold common shares in any year in which we are a PFIC, you will be
required to file U.S. Internal Revenue Service Form 8621 regarding distributions received on the common shares and any gain realized on
the disposition of the common shares.</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">You are urged to consult your
tax advisors regarding the application of the PFIC rules to your investment in our common shares and the elections discussed above.</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"><i>Information Reporting and
Backup Withholding</i></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">Dividend payments with respect
to our common shares and proceeds from the sale, exchange or redemption of our common shares may be subject to information reporting to
the U.S. Internal Revenue Service and possible U.S. backup withholding at a current rate of 28%. Backup withholding will not apply, however,
to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other required certification on U.S. Internal Revenue
Service Form W-9 or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status generally
must provide such certification on U.S. Internal Revenue Service Form W-9. U.S. Holders are urged to consult their tax advisors regarding
the application of the U.S. information reporting and backup withholding rules.</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">Backup withholding is not
an additional tax. Amounts withheld as backup withholding may be credited against your U.S. federal income tax liability, and you may
obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the
U.S. Internal Revenue Service and furnishing any required information.</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>F.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Dividends and paying agents</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not required.</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>G.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Statement by experts</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not required.</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>H.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Documents on display</b></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"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Documents concerning us that
are referred to in this document may be inspected at AF, 16/F, Block B, Jiacheng Plaza,18 Xiaguangli, Chaoyang District, Beijing, 100027
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.</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%">
  <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"><b>I.</b></span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Subsidiary Information</b></span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.5in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not required.</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: 75; 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 -->71<!-- 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><div><a id="a_013"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>Interest
Rate Risk</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; text-indent: 0.5in"><span>As
of December 31, 2022, we had no short-term borrowings and long-term borrowings. As of December 31, 2021, we had no short-term borrowings.
Our exposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits with
our banks. We have not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. However, our
future interest income may fall short of expectations due to changes in interest rates.</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"><span>Credit Risk</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; text-indent: 0.5in"><span>As
of December 31, 2022 and 2021, we had cash and cash equivalents of $3,825,477 and $11,206,220, respectively. Our cash and cash equivalents
are invested primarily in savings and deposit accounts with original maturities of three months or less. Savings and deposit accounts
generate a small amount of interest income.</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"><span>Inflation
Risk</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; text-indent: 0.5in"><span>Inflationary
factors such as increases in the cost of our product may adversely affect our operating results. Although we do not believe that inflation
has had a material effect on our financial position or results of operations to date, a high rate of inflation in the future may have
an adverse effect on our ability to maintain current levels of gross profit and selling and marketing, general and administrative expenses
as a percentage of revenue if the selling prices of our products do not increase with these increased costs.</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"><span>Foreign
Exchange Risk</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; 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><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; ">Our
functional currency is the RMB, and our financial statements are presented in U.S. dollars. The RMB depreciated by 2.3% in fiscal 2021
and appreciated by 9.2% 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.</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; ">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><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>Commodity
Risk</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; text-indent: 0.5in"><span>We
are not exposed to commodity price risk.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21pt; text-align: justify; ">&#160;</p><div>

</div><div><a id="a_014"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><b>&#160;</b></p><div>

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

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

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

</div><!-- Field: Page; Sequence: 76; 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 -->72<!-- 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><div><a id="a_015"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>PART II</b></p><div>

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

</div><div><a id="a_016"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">There has been no default of any indebtedness nor
is there any arrearage in the payment of dividends.</p><div>

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

</div><div><a id="a_017"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
AND USE OF PROCEEDS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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; text-indent: 0.5in; ">See
&#8220;Item 10. Additional Information&#8221; for a description of the rights of securities holders, which remain unchanged.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; 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; ">The
following &#8220;Use of Proceeds&#8221; information relates to the registration statement on Form F-1, as amended (File Number 333-227934),
which was declared effective December 26, 2018, for our IPO&#160;in which we offered and sold an aggregate 1,800,000 common shares at
$4 per share. Net proceeds raised by us from the IPO amounted to approximately $6,478,801 after deducting underwriting discounts and commissions
and other offering expenses. Out of the $6.5 million net proceeds, $500,000 was deposited into an escrow account to satisfy the initial
$500,000 in potential indemnification obligations arising during an escrow period of two years following the IPO closing date of January
7, 2019. On January 7, 2019, we sold additional 270,000 common shares at $4 per share. Net proceeds raised by us amounted to $993,600
after deducting underwriting discounts. As a result, we raised a total of $7,472,401 from the issuance of 2,070,000 shares of common stock
in the January 2019 IPO. WestPark Capital, Inc. acted as representative for the underwriters in the IPO.</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; ">We
have earmarked and have been using the proceeds of the initial public offering as follows: approximately $3.13 million for research and
development and additional hiring, approximately $1.86 million for sales and marketing; and balance of approximately $2.48 million for
additional working capital.&#160;</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">As
of December 31, 2022, we have used all amounts of the net proceeds from our IPO.</p><div>

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

</div><div><a id="a_018"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 15. CONTROLS AND PROCEDURES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b><i>Disclosure Controls and Procedures</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our management, with the participation
of our Chief Executive Officer and Chief Financial Officer, has performed an evaluation of the effectiveness of the design and operation
of our disclosure controls and procedures as of December 31, 2022. Based on that evaluation, management, including our Chief Executive
Officer and Chief Financial Officer, has concluded that our disclosure controls and procedures as of December 31, 2022 were effective.</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Disclosure controls and procedures
are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act (i) is
recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and
(ii) is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding
required disclosure.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><b><i>Management&#8217;s annual report on internal
control over financial reporting</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our management is responsible
for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under
the Securities and Exchange Act of 1934. Our internal control over financial reporting is a process designed by, or under the supervision
of, our Chief Executive Officer and Chief Financial Officer and effected by our management and other personnel to provide reasonable assurance
regarding the reliability of our financial reporting and the preparation of our financial statements for external reporting purposes in
accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes
policies and procedures that pertain to the maintenance of records that in reasonable detail accurately reflect the transactions and dispositions
of our assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements
in accordance with accounting principles generally accepted in the United States of America, and that our receipts and expenditures are
being made only in accordance with the authorization of our board of directors and management; and provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our
financial statements.</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">Because of inherent limitations,
internal control over financial reporting may not prevent or detect misstatement. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with our policies and procedures may deteriorate.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the supervision and
with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, management conducted an evaluation
of the effectiveness of our internal control over financial reporting based on the criteria established in Internal Control &#8212; Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management has concluded that our internal control
over financial reporting was effective as of December 31, 2022.</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: 77; 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>
    </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; text-indent: 0.5in">All internal control systems,
no matter how well designed, have inherent limitations including the possibility of human error and the circumvention or overriding of
controls. Further, because of changes in conditions, the effectiveness of internal controls may vary over time. Projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate. Accordingly, even those systems determined to be effective can
provide only reasonable assurance with respect to financial statement preparation and presentation. We cannot be certain that these measures
will successfully remediate the material weakness or that other material weaknesses will not be discovered in the future. If our efforts
are not successful or other material weaknesses or control deficiencies occur in the future, we may be unable to report our financial
results accurately on a timely basis or help prevent fraud, which could cause our reported financial results to be materially misstated
and result in the loss of investor confidence or delisting and cause the market price of our common stock to decline. In addition, it
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 securities.
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. Because of our status as an emerging growth
company, you will not be able to depend on any attestation from our independent registered public accountants as to our internal control
over financial reporting for the foreseeable future.</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"><b><i>Changes in Internal Controls over Financial
Reporting</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except as discussed above,
during the year ended December 31, 2022, there were no changes in the Company&#8217;s internal control over financial reporting that have
materially affected, or are reasonably likely to materially affect our company&#8217;s internal control over financial reporting. It should
be noted that while our management believes that our disclosure controls and procedures provide a reasonable level of assurance; our management
does not expect that our disclosure controls and procedures or internal financial controls will prevent all errors or fraud. A control
system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control
system are met.</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><div><a id="a_019"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 16. RESERVED</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><b>&#160;</b></p><div>

</div><div><a id="a_020"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Board of Directors has
determined that Ms. Shufang Lai 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.</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><div><a id="a_021"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 16B. CODE OF ETHICS.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our Board of Directors 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 at http://ir.haisc.com/corporate/governance. We intend to disclose on our website any amendments to the Code of Business
Conduct and Ethics and any waivers of the Code of Business Conduct and Ethics that apply to our principal executive officer, principal
financial officer, principal accounting officer, controller, or persons performing similar functions.</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><div><a id="a_022"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b><i>Audit Fees</i></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; text-indent: 0.5in; ">During
2022 and 2021, MaloneBailey, LLP&#8217;s fees for the annual audit of our financial statements and the periodic reviews of the financial
statements were $240,000 and $230,025, respectively.</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><i>Audit-Related Fees</i></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; text-indent: 0.5in; ">During 2022 and 2021, the Company incurred $25,000 and nil audit-related
services for services that are reasonably related to performance of the audit or review or our financial statements and are nor reported
under &#8220;Audit Fees.&#8221; These services include attest services that are not required by statute or regulation and consultation
concerning financial accounting and reporting standards.</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: center"></p><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b><i>Tax Fees</i></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; text-indent: 0.5in; ">The
company has not paid MaloneBailey, LLP for tax services in 2022 and 2021.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b><i>All Other Fees</i></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; text-indent: 0.5in; ">The
company has not paid MaloneBailey, LLP for any other services in 2022 and 2021.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">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;</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><div><a id="a_023"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT
COMMITTEES.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">None.</p><div>

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

</div><div><a id="a_032"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
PURCHASERS.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">No purchase of our securities
were made by us or our affiliates in the 2021 fiscal year.</p><div>

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

</div><div><a id="a_024"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 16F. CHANGES IN REGISTRANT&#8217;S CERTIFYING ACCOUNTANT.</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">There were no changes to our certifying accountants
for the year ended December&#160;31, 2022.</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><div><a id="a_025"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 16G. CORPORATE GOVERNANCE</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the home country
rule exemption set forth under Nasdaq Listing Rule 5615, we elected to be exempt from the requirements of NASDAQ Listing Rule 5635, which
requires shareholder approval for (i) certain acquisitions of stock or assets of another company; (ii) an issuance of shares that will
result in a change of control of the company; (iii) the establishment or amendment of certain equity based compensation plans and arrangements;
and (iv) certain transactions (other than a public offering) involving issuances of a 20% or more of our outstanding shares. Our shares
are listed on the NASDAQ Capital Market (&#8220;NASDAQ&#8221;). As such, we are subject to corporate governance requirements imposed by
NASDAQ. Under NASDAQ rules, listed non-US companies may, in general, follow their home country corporate governance practices in lieu
of some of the NASDAQ corporate governance requirements. Except for the foregoing, we endeavor to comply with the NASDAQ corporate governance
practices and except for the foregoing, there is no significant difference between our corporate governance practices and what the NASDAQ
requires of domestic U.S. companies.</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><div><a id="a_026"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 16H. MINE SAFETY DISCLOSURE</b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Not applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</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"><b>ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS
THAT PREVENT INSPECTIONS.</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-indent: 0.5in">Not applicable.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></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 -->75<!-- 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><div><a id="a_028"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>PART III</b></p><div>

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

</div><div><a id="a_029"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 17. FINANCIAL STATEMENTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><b>&#160;</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We have elected to provide financial statements
pursuant to Item 18.</p><div>

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

</div><div><a id="a_030"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 18. FINANCIAL STATEMENTS</b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The financial statements are filed as part of this
Annual Report beginning on page F-1.</p><div>

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

</div><div><a id="a_031"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 19. EXHIBITS</b> &#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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>
    <td style="vertical-align: top; width: 9%; border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Exhibit&#160;No.</b></span></td>
    <td style="vertical-align: top; width: 1%">&#160;</td>
    <td style="vertical-align: bottom; width: 90%; border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Description</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">1.1</span></td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1742518/000121390018014224/ff12018ex3-1_mmtecinc.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Memorandum and Articles of Association (1).</span></a></td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.1</span></td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1742518/000121390018014224/ff12018ex4-1_mmtecinc.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Specimen Share Certificate (1).</span></a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td>2.2</td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="f20f2022ex2-2_mmtecinc.htm">Description of Securities</a></td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.1</span></td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1742518/000121390018014224/ff12018ex1-1_mmtecinc.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Underwriting Agreement (1)</span></a></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">4.2</span></td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1742518/000121390018014224/ff12018ex10-1_mmtecinc.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Employment Agreement between the Company and CEO (1).</span></a></td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.3</span></td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1742518/000121390018014224/ff12018ex10-2_mmtecinc.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Employment Agreement between the Company and CFO (1).</span></a></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">4.4</span></td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1742518/000121390018014224/ff12018ex10-4_mmtecinc.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Individual Loan Contract with Zhen Fan (1).</span></a></td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.5</span></td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1742518/000121390018014224/ff12018ex10-6_mmtecinc.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Individual Loan Contract with Xiangdong Wen (1).</span></a></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">4.6</span></td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1742518/000121390018014224/ff12018ex10-8_mmtecinc.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Lease Agreement (1).</span></a></td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.7</span></td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1742518/000121390018014224/ff12018ex10-9_mmtecinc.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Share Repurchase Agreement (1).</span></a></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">4.8</span></td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1742518/000121390021010845/ea125703ex10-1_mmtecinc.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Securities Purchase Agreement entered into on February 22, 2021, by MMTec, Inc. and certain institutional investors (2).</span></a></td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.9</span></td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1742518/000121390021066478/ea152744ex10-1_mmtecinc.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Securities Purchase Agreement entered into on December 20, 2021, by MMTec, Inc. and an investor (3).</span></a></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">8.1</span></td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1742518/000121390018014224/ff12018ex21-1_mmtecinc.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">List of Subsidiaries of the Registrant (1).</span></a></td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">11.1</span></td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1742518/000121390018014224/ff12018ex14-1_mmtecinc.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Code of Conduct and Ethics (1).</span></a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: top; ">
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    <td>&#160;</td>
    <td style="text-align: justify"><a href="f20f2022ex12-2_mmtecinc.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certification of the Chief Financial Officer (Principal Financial Officer) pursuant to Rule 13a-14(a) of the Securities Exchange Act, as amended.</span></a></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">13.1</span></td>
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  <tr style="vertical-align: top; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">13.2</span></td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="f20f2022ex13-2_mmtecinc.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</span></a></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">15.1</span></td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="f20f2022ex15-1_mmtecinc.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consent of Malone Bailey LLP.</span></a></td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">99.1</span></td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1742518/000121390018014224/ff12018ex99-1_mmtecinc.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Charter of the Audit Committee (1).</span></a></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">99.2</span></td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1742518/000121390018014224/ff12018ex99-2_mmtecinc.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Charter of the Compensation Committee (1).</span></a></td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">99.3</span></td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1742518/000121390018014224/ff12018ex99-3_mmtecinc.htm"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Charter of the Nominating Committee (1).</span></a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">101.INS</span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inline XBRL Instance Document.</span></td></tr>
  <tr style="vertical-align: top; ">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">101.SCH</span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inline XBRL Taxonomy Extension Schema Document.</span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">101.CAL</span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inline XBRL Taxonomy Extension Calculation Linkbase Document.</span></td></tr>
  <tr style="vertical-align: top; ">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">101.DEF</span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inline XBRL Taxonomy Extension Definition Linkbase Document.</span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">101.LAB</span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inline XBRL Taxonomy Extension Label Linkbase Document.</span></td></tr>
  <tr style="vertical-align: top; ">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">101.PRE</span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inline XBRL Taxonomy Extension Presentation Linkbase Document.</span></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">104</span></td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 24px"><span style="font-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">Previously filed as part of the registration statement filed with the SEC on October 22, 2018 and incorporated by reference herein by reference.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 24px"><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">Incorporated by reference to Exhibit 10.1 to the Company&#8217;s Report on Form 6-K filed with the SEC on February 22, 2021 and incorporated by reference by reference.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <tr style="vertical-align: top">
    <td style="width: 24px"><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">Incorporated by reference to Exhibit 10.1 to the Company&#8217;s Report on Form 6-K filed with the SEC on December 21, 2021 and incorporated by reference by reference.</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: center"></p><div>

</div><!-- Field: Page; Sequence: 80; 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 -->76<!-- 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>SIGNATURES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; 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">The Registrant hereby certifies that it meets
all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report
on its behalf.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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>&#160;</td>
    <td colspan="3"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>MMTec, Inc. </b></span></td></tr>
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td>&#160;</td>
    <td colspan="2">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">April 13, 2023</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">By:</span></td>
    <td colspan="2" style="border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/ Xiangdong Wen</span></td></tr>
  <tr style="vertical-align: top">
    <td style="width: 60%">&#160;</td>
    <td style="width: 4%">&#160;</td>
    <td style="width: 5%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Name:&#160;</span></td>
    <td style="width: 31%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Xiangdong Wen</span></td></tr>
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Title:</span></td>
    <td>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Chief Executive Officer</p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(Principal Executive Officer)</p></td></tr>
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">April 13, 2023</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">By:</span></td>
    <td colspan="2" style="border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/ Min Kong</span></td></tr>
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Name:</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Min Kong</span></td></tr>
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Title:</span></td>
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    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Chief Financial Officer</p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(Principal Financial and Accounting Officer)</p></td></tr>
  </table><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>

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

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

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

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><b>December 31, 2022, 2021 and 2020</b></p><div>

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

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

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

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

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

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

</div><!-- Field: Page; Sequence: 82 --><div>
    </div><div style="text-align: center; margin-top: 6pt; 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="text-align: center; break-before: page; margin-top: 6pt; margin-bottom: 6pt"><p style="text-align: center; margin-top: 0pt; margin-bottom: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; 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>MMTEC, INC. AND SUBSIDIARIES</b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>December 31, 2022, 2021 and 2020</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>CONTENTS</b></p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top; background-color: #CCEEFF"> <td style="width: 93%; padding-left: 9pt; text-indent: -9pt"><a href="#F_001"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Report of Independent Registered Public Accounting Firm (PCAOB ID <ix:nonNumeric contextRef="c0" name="dei:AuditorFirmId">206</ix:nonNumeric>)</span></a></td> <td style="width: 7%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-2 </span></td></tr> <tr style="vertical-align: top; "> <td style="padding-left: 9pt; text-indent: -9pt">&#160;</td> <td style="text-align: center">&#160;</td></tr> <tr style="vertical-align: top; background-color: #CCEEFF"> <td style="padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated Financial Statements:</span></td> <td style="text-align: center">&#160;</td></tr> <tr style="vertical-align: top; "> <td style="padding-left: 9pt; text-indent: -9pt">&#160;</td> <td style="text-align: center">&#160;</td></tr> <tr style="vertical-align: top; background-color: #CCEEFF"> <td style="padding-left: 0.25in; text-indent: -9pt"><a href="#F_002"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated Balance Sheets - As of December 31, 2022 and 2021</span></a></td> <td 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: top; "> <td style="padding-left: 9pt; text-indent: -9pt">&#160;</td> <td style="text-align: center">&#160;</td></tr> <tr style="vertical-align: top; background-color: #CCEEFF"> <td style="padding-left: 0.25in; text-indent: -9pt"><a href="#F_003"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated Statements of Operations and Comprehensive Loss - For the Years Ended December 31, 2022, 2021 and 202<span style="text-decoration:underline">0</span></span></a></td> <td style="white-space: nowrap; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-4</span></td></tr> <tr style="vertical-align: top; "> <td style="padding-left: 9pt; text-indent: -9pt">&#160;</td> <td style="white-space: nowrap; text-align: center">&#160;</td></tr> <tr style="vertical-align: top; background-color: #CCEEFF"> <td style="padding-left: 0.25in; text-indent: -9pt"><a href="#F_004"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated Statements of Changes in Shareholders&#8217; Equity - For the Years Ended December 31, 2022, 2021 and 202<span style="text-decoration:underline">0</span></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: top; "> <td style="padding-left: 9pt; text-indent: -9pt">&#160;</td> <td style="text-align: center">&#160;</td></tr> <tr style="vertical-align: top; background-color: #CCEEFF"> <td style="padding-left: 0.25in; text-indent: -9pt"><a href="#F_005"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consolidated Statements of Cash Flows &#8211; For the Years Ended December 31, 2022, 2021 and 202<span style="text-decoration:underline">0</span></span></a></td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-6</span></td></tr> <tr style="vertical-align: top; "> <td style="padding-left: 9pt; text-indent: -9pt">&#160;</td> <td style="text-align: center">&#160;</td></tr> <tr style="vertical-align: top; background-color: #CCEEFF"> <td style="padding-left: 0.25in; text-indent: -9pt"><a href="#F_006"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notes to Consolidated Financial Statements</span></a></td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-7 </span></td></tr> </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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

</div><div><a id="F_001"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM</b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To the Shareholders and Board of Directors of</p><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 36.2pt 0pt 0"><b><i>Opinion on the Financial Statements</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have audited the accompanying consolidated
balance sheets of MMTEC, INC. and its subsidiaries (collectively, the &#8220;Company&#8221;) as of December 31, 2022 and 2021, and the
related consolidated statements of operations and comprehensive loss, changes in shareholders&#8217; equity, and cash flows for each of the three
years in the period ended December 31, 2022, and the related notes (collectively referred to as the &#8220;financial statements&#8221;).
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December
31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022,
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 0pt 0.5in; text-align: justify">&#160;</p><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">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
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (&#8220;PCAOB&#8221;)
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the 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 0pt 0.5in; 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; text-align: justify"><i>/s/ <ix:nonNumeric contextRef="c0" name="dei:AuditorName">MaloneBailey, LLP</ix:nonNumeric></i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have served as the Company&#8217;s auditor since
2018.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><ix:nonNumeric contextRef="c0" name="dei:AuditorLocation">Houston, Texas</ix:nonNumeric></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">April 13, 2023</p><div>

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

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

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>MMTEC, INC. AND SUBSIDIARIES</b></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>CONSOLIDATED BALANCE SHEETS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(IN U.S. DOLLARS)</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 style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">As of</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom">
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    <td colspan="2" style="text-align: right">&#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; text-indent: -0.125in; padding-left: 0.25in">&#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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    <td style="text-indent: -0.125in; padding-left: 0.125in">&#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></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)">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#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)">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#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: center; text-indent: -0.125in; padding-left: 0.125in">LIABILITIES AND SHAREHOLDERS&#8217; 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; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#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></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -0.125in; padding-left: 0.25in">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"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccruedSalariesCurrent" scale="0" unitRef="usd">372,980</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="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccountsPayableAndOtherAccruedLiabilitiesCurrent" scale="0" unitRef="usd">395,352</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="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:OperatingLeaseLiabilityCurrent" scale="0" unitRef="usd">405,591</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeaseLiabilityCurrent" scale="0" unitRef="usd">356,274</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.125in; padding-left: 0.25in">Total Current 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="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LiabilitiesCurrent" scale="0" unitRef="usd">1,173,923</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LiabilitiesCurrent" scale="0" unitRef="usd">1,128,232</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#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; text-indent: -0.125in; padding-left: 0.125in">NON-CURRENT LIABILITIES:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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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:AccountsPayableAndAccruedLiabilitiesNoncurrent" scale="0" unitRef="usd">209,250</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: -0.125in; padding-left: 0.25in">Operating lease liabilities, noncurrent</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:OperatingLeaseLiabilityNoncurrent" scale="0" unitRef="usd">647,983</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: -0.125in; padding-left: 0.125in">&#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-bottom: 1.5pt; text-indent: -0.125in; padding-left: 0.25in">Total Non-current 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="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LiabilitiesNoncurrent" scale="0" unitRef="usd">857,233</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LiabilitiesNoncurrent" scale="0" unitRef="usd">107,545</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#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-bottom: 1.5pt; text-indent: -0.125in; padding-left: 0.25in">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="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:Liabilities" scale="0" unitRef="usd">2,031,156</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:Liabilities" scale="0" unitRef="usd">1,235,777</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#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; text-indent: -0.125in; padding-left: 0.25in">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-1">&#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-2">&#160;</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#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; text-indent: -0.125in; padding-left: 0.125in">SHAREHOLDERS&#8217;  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; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -0.125in; 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="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AdditionalPaidInCapital" scale="0" unitRef="usd">31,727,407</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; text-indent: -0.125in; padding-left: 0.25in">Accumulated deficit</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: -0.125in; padding-left: 0.25in">Accumulated other comprehensive income (loss)</td><td style="padding-bottom: 1.5pt">&#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; text-align: center">&#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">*</td><td style="text-align: justify"><ix:footnote id="ix_0_footnote" xml:lang="en-US">After giving effect to the reverse stock split effected on July
13, 2022. Also see Note 13.</ix:footnote></td>
</tr></table><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The accompanying notes to consolidated financial
statements are an integral part of these 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><!-- Field: Page; Sequence: 85 --><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; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>MMTEC, INC. AND SUBSIDIARIES</b></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>CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(IN U.S. DOLLARS)</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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    <td colspan="2" style="font-weight: bold; text-align: center">For the<br/> Year Ended</td><td style="font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td 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)">
    <td style="text-align: left; text-indent: -0.125in; padding-left: 0.125in">OPERATING EXPENSES:</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -0.125in; padding-left: 0.25in">General and administrative</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#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; ">
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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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  <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: -0.125in; padding-left: 0.25in">Foreign currency transaction gain (loss)</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: -0.125in; padding-left: 0.25in">Loss on equity method 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">-</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><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#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; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -0.125in; padding-left: 0.375in">Total Other Income (Expense)</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#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; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -0.125in; padding-left: 0.125in">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:IncomeLossFromEquityMethodInvestments" scale="0" sign="-" unitRef="usd">5,645,376</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:IncomeLossFromEquityMethodInvestments" scale="0" sign="-" unitRef="usd">7,050,755</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="c6" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncomeLossFromEquityMethodInvestments" scale="0" sign="-" unitRef="usd">3,181,596</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#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; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -0.125in; padding-left: 0.125in">INCOME TAXES</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-6">-</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-7">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-8">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#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; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 4pt; text-indent: -0.125in; padding-left: 10pt">NET LOSS</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLoss" scale="0" sign="-" unitRef="usd">5,645,376</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLoss" scale="0" sign="-" unitRef="usd">7,050,755</ix:nonFraction></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">(<ix:nonFraction contextRef="c6" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLoss" scale="0" sign="-" unitRef="usd">3,181,596</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#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; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -0.125in; padding-left: 10pt">COMPREHENSIVE LOSS:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -0.125in; padding-left: 0.25in">NET LOSS</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:NetIncomeLoss" scale="0" sign="-" unitRef="usd">5,645,376</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:NetIncomeLoss" scale="0" sign="-" unitRef="usd">7,050,755</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="c6" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetIncomeLoss" scale="0" sign="-" unitRef="usd">3,181,596</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -0.125in; padding-left: 0.25in">OTHER COMPREHENSIVE (LOSS) INCOME</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="c6" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherComprehensiveIncomeLossForeignCurrencyTranslationAdjustmentTax" scale="0" sign="-" unitRef="usd">117,687</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 4pt; text-indent: -0.125in; padding-left: 0.25in">TOTAL COMPREHENSIVE LOSS</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="us-gaap:OtherComprehensiveIncomeLossTax" scale="0" unitRef="usd">5,830,261</ix:nonFraction></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">(<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherComprehensiveIncomeLossTax" scale="0" unitRef="usd">7,005,640</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#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; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in">NET LOSS PER COMMON SHARE</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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  </table><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; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left">*</td><td style="text-align: justify"><ix:footnote id="ix_1_footnote" xml:lang="en-US">After giving effect to the reverse stock split effected on
July 13, 2022. Also see Note 13.</ix:footnote></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: center">The accompanying notes to consolidated financial
statements are an integral part of these 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><!-- Field: Page; Sequence: 86 --><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><!-- 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>MMTEC, INC. AND SUBSIDIARIES</b></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>CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS&#8217;
EQUITY</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>FOR THE YEARS ENDED DECEMBER 31, 2022, 2021
AND 2020</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(IN U.S. DOLLARS)</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 style="padding-left: 0.125in; text-align: center; text-indent: -0.125in">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.125in; text-align: center; text-indent: -0.125in">&#160;</td><td style="font-weight: bold">&#160;</td>
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    <td style="padding-left: 0.125in; text-indent: -0.125in">&#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-indent: -0.125in; padding-left: 0.125in">&#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><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#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>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#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><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><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"><div style="-sec-ix-hidden: hidden-fact-33">-</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-34">-</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-35">-</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-36">-</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: -0.125in; padding-left: 0.125in">&#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><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><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"><div style="-sec-ix-hidden: hidden-fact-39">-</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: -0.125in; padding-left: 0.125in">&#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><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><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"><div style="-sec-ix-hidden: hidden-fact-41">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table><div>


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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.25in; text-align: left">*</td><td style="text-align: justify"><ix:footnote id="ix_2_footnote" xml:lang="en-US">After giving effect to the reverse stock split effected on July
13, 2022. Also see Note 13.</ix:footnote></td>
</tr></table><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The accompanying notes to consolidated financial
statements are an integral part of these statements.</p><div>

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

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

</div><!-- Field: Page; Sequence: 87 --><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>
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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>MMTEC, INC. AND SUBSIDIARIES</b></p><div>

</div><div><a id="F_005"></a></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"><b>(IN U.S. DOLLARS)</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: 9pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold">&#160;</td>
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    <td colspan="2" style="font-weight: bold; text-align: center">For the<br/> Year Ended</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">For the <br/> Year Ended</td><td style="font-weight: bold">&#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>
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    <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>
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  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td>&#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>CASH FLOWS FROM OPERATING ACTIVITIES:</td><td>&#160;</td>
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    <td colspan="2" style="text-align: center">&#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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    <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)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt">Net cash used in operating activities:</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; ">
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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: 27pt">Noncash lease expense</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)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt">Gain on extinguishment of debt</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 0.25in">Changes in operating assets and liabilities:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt">Operating lease liability</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:IncreaseDecreaseInOtherOperatingLiabilities" scale="0" sign="-" unitRef="usd">389,518</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; text-indent: -9pt; padding-left: 27pt">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" unitRef="usd">104,027</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">148,466</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="c6" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInAccountsReceivable" scale="0" unitRef="usd">30,360</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt">Security deposit</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:IncreaseDecreaseInDepositOtherAssets" scale="0" unitRef="usd">26,596</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:IncreaseDecreaseInDepositOtherAssets" scale="0" sign="-" unitRef="usd">465,843</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="c6" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInDepositOtherAssets" scale="0" sign="-" unitRef="usd">47,042</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt">Prepaid expenses and other current 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:IncreaseDecreaseInPrepaidDeferredExpenseAndOtherAssets" scale="0" sign="-" unitRef="usd">33,015</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:IncreaseDecreaseInPrepaidDeferredExpenseAndOtherAssets" scale="0" unitRef="usd">54,782</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="c6" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInPrepaidDeferredExpenseAndOtherAssets" scale="0" sign="-" unitRef="usd">206,743</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: 27pt">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">117,004</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:IncreaseDecreaseInDeferredRevenue" scale="0" unitRef="usd">121,984</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="c6" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInDeferredRevenue" scale="0" sign="-" unitRef="usd">63,966</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt">Salary 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:IncreaseDecreaseInEmployeeRelatedLiabilities" scale="0" unitRef="usd">108,133</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:IncreaseDecreaseInEmployeeRelatedLiabilities" scale="0" unitRef="usd">142,758</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c6" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInEmployeeRelatedLiabilities" scale="0" sign="-" unitRef="usd">49,024</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt">Accrued liabilities and other payables</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" unitRef="usd">252,159</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:IncreaseDecreaseInAccountsPayableAndAccruedLiabilities" scale="0" unitRef="usd">273,818</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="c6" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInAccountsPayableAndAccruedLiabilities" scale="0" sign="-" unitRef="usd">124,137</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#160;</td><td style="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: -9pt; padding-left: 9pt">NET CASH USED IN OPERATING ACTIVITIES</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInOperatingActivities" scale="0" sign="-" unitRef="usd">5,590,567</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInOperatingActivities" scale="0" sign="-" unitRef="usd">4,096,506</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="c6" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInOperatingActivities" scale="0" sign="-" unitRef="usd">1,982,847</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><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; text-indent: -9pt; padding-left: 9pt">CASH FLOWS FROM INVESTING ACTIVITIES:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt">Purchase 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:PaymentsToAcquirePropertyPlantAndEquipment" scale="0" unitRef="usd">3,792</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquirePropertyPlantAndEquipment" scale="0" unitRef="usd">37,068</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="c6" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquirePropertyPlantAndEquipment" scale="0" unitRef="usd">18,379</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt">Collection of loan to related party</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"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="mtc:CollectionLoanToRelatedParty" scale="0" unitRef="usd">93,887</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="c6" decimals="0" format="ixt:num-dot-decimal" name="mtc:CollectionLoanToRelatedParty" scale="0" unitRef="usd">79,520</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt">Collection of loan to employee</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"><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"><ix:nonFraction contextRef="c6" decimals="0" format="ixt:num-dot-decimal" name="mtc:CollectionOfLoanEmployee" scale="0" unitRef="usd">173,974</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: 27pt">Collection of loan to third 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="mtc:CollectionOfLoanToThirdParties" scale="0" unitRef="usd">75,000</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"><div style="-sec-ix-hidden: hidden-fact-79">-</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-80">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt">Cash received from return of investment</td><td>&#160;</td>
    <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>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c6" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromSaleMaturityAndCollectionsOfInvestments" scale="0" unitRef="usd">306,518</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: 27pt">Purchase of long-term investment</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-83">-</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:PaymentsToAcquireLongtermInvestments" scale="0" unitRef="usd">350,000</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="c6" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquireLongtermInvestments" scale="0" unitRef="usd">873,577</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 27pt">Loan to third parties</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: 27pt">Deposit for business acquisition</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <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; text-indent: -9pt; padding-left: 9pt">CASH FLOWS FROM FINANCING 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; ">
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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: 27pt">Payment on finance lease</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"><div style="-sec-ix-hidden: hidden-fact-91">-</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; text-indent: -9pt; padding-left: 27pt">Repayments to related parties</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#160;</td><td style="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: -9pt; padding-left: 9pt">NET CASH PROVIDED BY FINANCING ACTIVITIES</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><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; text-indent: -9pt; padding-left: 9pt">EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#160;</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#160;</td><td style="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; text-indent: -9pt; padding-left: 9pt">NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsPeriodIncreaseDecreaseIncludingExchangeRateEffect" scale="0" unitRef="usd">9,780,294</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-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><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-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">CASH AND CASH EQUIVALENTS - beginning of year</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="c23" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsIncludingDisposalGroupAndDiscontinuedOperations" scale="0" unitRef="usd">1,425,926</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: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><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-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">CASH AND CASH EQUIVALENTS - end of year</td><td style="padding-bottom: 4pt">&#160;</td>
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    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsIncludingDisposalGroupAndDiscontinuedOperations" scale="0" unitRef="usd">11,206,220</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><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; text-indent: -9pt; padding-left: 9pt">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>
    <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; text-indent: -9pt; padding-left: 27pt">Cash paid for:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</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 to consolidated financial
statements are an integral part of these 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>

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

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OPERATIONS</span></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="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_2" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">MMTEC, INC. (&#8220;MMTEC&#8221;, the &#8220;Company&#8221;)
was incorporated on January 4, 2018 under the laws of the British Virgin Islands (&#8220;BVI&#8221;). On March 19, 2018, MMTEC acquired
a wholly owned subsidiary, MM Future Technology Limited (&#8220;MM Future&#8221;). MM Future was incorporated in Hong Kong on October
31, 2017 for the purpose of being a holding company for the equity interest in Gujia (Beijing) Technology Co., Ltd. (&#8220;Gujia&#8221;).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

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</div><div>

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incorporated in People&#8217;s Republic of China (&#8220;PRC&#8221;) on June 9, 2015. Gujia is a technology provider, operates as an internet
business platform to support operations. Gujia provides investment services to the U.S. securities markets for PRC investors and provides
technical services to Chinese financial institutions to help them be able to provide investment services in the U.S. securities markets
for their clients<span>.</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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subsidiary Meimei Zhengtong (Beijing) Technology Ltd. (&#8220;Meimei Zhengtong&#8221;) which was dissolved in July 2018.</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="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_6" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 28, 2018, the Company acquired <ix:nonFraction contextRef="c44" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:BusinessAcquisitionPercentageOfVotingInterestsAcquired" scale="-2" unitRef="pure">24.9</ix:nonFraction>%
of MMBD Trading Limited. (&#8220;MMBD Trading&#8221;). MMBD Trading was incorporated on March 4, 2016 under the laws of the British Virgin
Islands. The remaining <ix:nonFraction contextRef="c45" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:RevenueRemainingPerformanceObligationPercentage" scale="-2" unitRef="pure">75.1</ix:nonFraction>% of MMBD Trading was owned by <ix:nonFraction contextRef="c45" decimals="3" format="ixt:num-dot-decimal" name="mtc:OwnershipPercentage" scale="-2" unitRef="pure">32.7</ix:nonFraction>% shareholders of the Company. The Company agreed to purchase the remaining
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and as a result of this acquisition, MMBD Trading has become a wholly-owned subsidiary of the Company. MMBD Trading acquired a wholly
owned subsidiary, MM Global Securities, INC. (&#8220;MM Global&#8221;) on August 16, 2017. MMBD Trading does not conduct any operations
or own any material assets or liabilities except for the <ix:nonFraction contextRef="c47" decimals="2" format="ixt:num-dot-decimal" name="mtc:EquityInterestPercentage" scale="-2" unitRef="pure">100</ix:nonFraction>% of the equity interest of MM Global. MM Global was incorporated in the State
of Illinois on September 25, 1997 as Feil Daily Investment Co. which was changed to Whitewood Group Inc. in 2011. MM Global&#8217;s continuing
membership application was approved by FINRA as a broker-dealer in August 2017 and changed its name to MM IGlobal, INC. in November 2017
pursuant to the ownership change. MM IGlobal, INC. changed its name to MM Global Securities, INC. in March 2019. MM Global operates as
a securities broker/dealer in New York City.</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="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_7" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On April 20, 2018, the Company incorporated MM
Fund Services Limited (&#8220;MM Fund&#8221;), a Cayman Islands company, for the purpose of providing administration services to the private
equity funds industry. MM Fund is dormant 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>

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Management Limited (&#8220;MM Capital&#8221;), a Cayman Islands company, for the purpose of providing assets management and investment
services to clients. MM Capital is dormant 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>

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Fund SPC (&#8220;MM SPC&#8221;), a Cayman Islands company, for the purpose of providing asset management services to clients. MM SPC is
a wholly-owned subsidiary of MM Capital and is dormant 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 continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_10" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 15, 2019, the Company incorporated MM
Global Capital Limited, a Hong Kong company, for the purpose of providing assets management and investment services to clients, and subsequently
changed its name to HC Securities (HK) limited (&#8220;HC Securities&#8221;) on December 22, 2021. HC Securities is a wholly-owned subsidiary
of MMTEC. HC Securities applied license to SFC and was approved on December 21, 2021. HC Securities is licensed on dealing in securities,
advising on securities and asset management.</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="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_11" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On July 9, 2019, the Company acquired <ix:nonFraction contextRef="c48" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:BusinessAcquisitionPercentageOfVotingInterestsAcquired" scale="-2" unitRef="pure">49</ix:nonFraction>% of a
newly-formed entity called Xchain Fintech PTE.LTD., (&#8220;Xchain&#8221;), a Singapore company, for the purpose of providing technical
support for the construction and development of a new solutions for the existing problems of the traditional financial industry, the difficulty
experienced by investors in investing and allocating investment assets globally, and the protection of funds and investments by using
advanced technologies, such as artificial intelligence, big data analysis and blockchain. Xchain is dormant 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>

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</div><div>

</div><ix:continuation continuedAt="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_13" id="_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On September 13, 2021, the Company incorporated
Fundex SPC, a Cayman Islands company, for the purpose of providing asset management services to clients, as a wholly-owned subsidiary
of MM Capital Management Limited.</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">During year ended 2022,
the Company planned for a potential business acquisition and paid $1,000,000 as a deposit for the business acquisition to the shareholders
of the potential acquiree, which was included in &#8220;deposit for business acquisition&#8221; on the accompanying consolidated balance
sheets. The deposit is refundable if the acquisition fails.</p><div>

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

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

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

</div><!-- Field: Page; Sequence: 89 --><div>
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</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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financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States
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</div><div>

</div><ix:continuation id="_BasisOfAccounting-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">The Company&#8217;s consolidated
financial statements include the accounts of MMTEC and its subsidiaries. All significant intercompany accounts and transactions have been
eliminated in consolidation.</p></ix:continuation><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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POLICIES</span></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="_SignificantAccountingPoliciesTextBlock-c0_cont_2" id="_SignificantAccountingPoliciesTextBlock-c0_cont_1"><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; "><b>Use of Estimates</b></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_3" id="_SignificantAccountingPoliciesTextBlock-c0_cont_2"><ix:continuation id="_UseOfEstimates-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">The preparation of the
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 disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates
during the years ended December 31, 2022, 2021 and 2020 include the allowance for doubtful accounts, impairment of long-term investment
and valuation of deferred tax assets.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_5" id="_SignificantAccountingPoliciesTextBlock-c0_cont_4"><ix:continuation continuedAt="_FairValueOfFinancialInstrumentsPolicy-c0_cont_2" id="_FairValueOfFinancialInstrumentsPolicy-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span>The
Company adopted the guidance of Accounting Standards Codification (&#8220;ASC&#8221;) 820 for fair value measurements which clarifies
the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs
used in measuring fair value as follows</span>:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_6" id="_SignificantAccountingPoliciesTextBlock-c0_cont_5"><ix:continuation continuedAt="_FairValueOfFinancialInstrumentsPolicy-c0_cont_3" id="_FairValueOfFinancialInstrumentsPolicy-c0_cont_2"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_7" id="_SignificantAccountingPoliciesTextBlock-c0_cont_6"><ix:continuation continuedAt="_FairValueOfFinancialInstrumentsPolicy-c0_cont_4" id="_FairValueOfFinancialInstrumentsPolicy-c0_cont_3"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_8" id="_SignificantAccountingPoliciesTextBlock-c0_cont_7"><ix:continuation continuedAt="_FairValueOfFinancialInstrumentsPolicy-c0_cont_5" id="_FairValueOfFinancialInstrumentsPolicy-c0_cont_4"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_9" id="_SignificantAccountingPoliciesTextBlock-c0_cont_8"><ix:continuation continuedAt="_FairValueOfFinancialInstrumentsPolicy-c0_cont_6" id="_FairValueOfFinancialInstrumentsPolicy-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span>The
</span>carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, loan receivable,
net, security deposits &#8211; current portion, other current assets, salary payable, operating lease liabilities &#8211; current and
accrued liabilities and other payables approximate their fair market value based on the short-term maturity of these instruments<span>.
</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_10" id="_SignificantAccountingPoliciesTextBlock-c0_cont_9"><ix:continuation id="_FairValueOfFinancialInstrumentsPolicy-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">Transactions involving
related parties cannot be presumed to be carried out on an arm&#8217;s-length basis, as the requisite conditions of competitive, free
market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party
transactions were consummated on terms equivalent to those that prevail in arm&#8217;s-length transactions unless such representations
can be substantiated. It is not, however, practical to determine the fair value of amounts due from or due to related parties due to their
related party nature.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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

</div><!-- Field: Page; Sequence: 90 --><div>
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTE 3 &#8211; <span style="text-decoration:underline">SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (continued)</span></b></p><div>

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

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</div><div>

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respectively, are uninsured. The Company has not experienced any losses in bank accounts and believes it is not exposed to any risks on
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_13" id="_SignificantAccountingPoliciesTextBlock-c0_cont_12"><ix:nonNumeric contextRef="c0" continuedAt="_LoansAndLeasesReceivableLeaseFinancingPolicy-c0_cont_1" escape="true" name="us-gaap:LoansAndLeasesReceivableLeaseFinancingPolicy"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>Loan Receivable, Net</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9pt; text-indent: -9pt; "><b>&#160;</b></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_14" id="_SignificantAccountingPoliciesTextBlock-c0_cont_13"><ix:continuation id="_LoansAndLeasesReceivableLeaseFinancingPolicy-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span>Loan receivable, net is recorded
at the uncollected principal balances, net of an allowance for doubtful accounts. An estimate for doubtful accounts is made when collection
of the full amount is no longer probable. Estimates are based on historical collection experience and current economic conditions.</span></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_15" id="_SignificantAccountingPoliciesTextBlock-c0_cont_14"><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"><b>Concentrations of Credit Risk</b></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_16" id="_SignificantAccountingPoliciesTextBlock-c0_cont_15"><ix:continuation id="_ConcentrationRiskCreditRisk-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span>T</span>he
Company has operations carried out in China. Accordingly, the Company&#8217;s business, financial condition and results of operations
may be influenced by the political, economic and legal environment in China, and by the general state of China&#8217;s economy. The Company&#8217;s
operations in China are subject to specific considerations and significant risks not typically associated with companies in North America.
The Company&#8217;s results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary
measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.</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_17" id="_SignificantAccountingPoliciesTextBlock-c0_cont_16"><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"><b>Property and Equipment</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>&#160;</i></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_18" id="_SignificantAccountingPoliciesTextBlock-c0_cont_17"><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; "><span>Property
</span>and equipment, including assets acquired through finance leases, are stated at cost less accumulated depreciation, and depreciated
on a straight-line basis over the estimated useful lives of the assets. Cost represents the purchase price of the asset and other costs
incurred to bring the asset into its existing use. The cost of repairs and maintenance is expensed as incurred; major replacements and
improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts,
and any resulting gains or losses are included in income/loss in the year of disposition<span>. </span>Estimated
useful lives are as follows:</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" escape="true" name="mtc:SchedulePropertyPlantAndEquipmentEstimatedUsefulLives"><ix:continuation id="_PropertyPlantAndEquipmentPolicyTextBlock-c0_cont_2"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td>&#160;</td>
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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: 91 --><div>
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 3 &#8211; <span style="text-decoration:underline">SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)</span></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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</span>accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances
indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment
loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is
measured as the difference between the asset&#8217;s estimated fair value and its book value. The Company did not record any impairment
charge for the years ended December 31, 2022, 2021 and 2020.</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_22" id="_SignificantAccountingPoliciesTextBlock-c0_cont_21"><ix:nonNumeric contextRef="c0" continuedAt="mtc_LongtermInvestmentPolicyTextBlock-c0_cont_1" escape="true" name="mtc:LongtermInvestmentPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span><b>Long-term
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_23" id="_SignificantAccountingPoliciesTextBlock-c0_cont_22"><ix:continuation id="mtc_LongtermInvestmentPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">The Company&#8217;s long-term
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_24" id="_SignificantAccountingPoliciesTextBlock-c0_cont_23"><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><b><span style="text-decoration:underline">Equity
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_25" id="_SignificantAccountingPoliciesTextBlock-c0_cont_24"><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; ">The Company uses the
measurement alternative for those investments over which the company does not have significant influence, and without readily determinable
fair value and do not qualify for the net asset value practical expedient in accordance with ASU 2016-01, &#8220;Financial Instruments-Overall:
Recognition and Measurement of Financial Assets and Financial Liabilities&#8221; which was adopted on January 1, 2019. The adoption did
not have a significant impact on the Company&#8217;s consolidated financial statements. The Company records these investments at cost,
less impairment, and plus or minus subsequent adjustments for observable price changes. Under this measurement alternative, changes in
the carrying value of the equity investments are required to be made whenever there are observable price changes in orderly transactions
for the identical or similar investment of the same issuer.</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_26" id="_SignificantAccountingPoliciesTextBlock-c0_cont_25"><ix:continuation continuedAt="_InvestmentPolicyTextBlock-c0_cont_3" id="_InvestmentPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">The Company periodically
reviews its equity investment for impairment. At each reporting date, an entity that uses the measurement alternative to measure an equity
investment without a readily determinable fair value is required to make a qualitative assessment of whether the investment is impaired.
The Company regularly evaluates the impairment of these investments based on performance and financial position of the investee as well
as other evidence of market value. Such evaluation includes, but is not limited to, reviewing the investee&#8217;s cash position, recent
financing, projected and historical financial performance, cash flow forecasts and financing needs. An impairment loss recognized equal
to the excess of the investment cost over its fair value at the end of each reporting period for which the assessment is made. The fair
value would then become the new cost basis of investment.</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_27" id="_SignificantAccountingPoliciesTextBlock-c0_cont_26"><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; "><b><span style="text-decoration:underline">Equity Method Investment</span></b></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_28" id="_SignificantAccountingPoliciesTextBlock-c0_cont_27"><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; ">The Company uses the
equity method of accounting for its investment in, and earning or loss of, company that it does not control but over which it does exert
significant influence. The Company initially records its investment at cost and the difference between the cost of the equity investee
and the fair value of the underlying equity in the net assets of the equity investee is recognized as equity method goodwill, which is
included in the equity method investment on the consolidated balance sheets. The Company subsequently adjusts the carrying amount of the
investment to recognize the Company&#8217;s proportionate share of each equity investee&#8217;s net income or loss into earnings after
the date of investment. If an equity investment no longer qualifies to be accounted for under the equity method, the investment&#8217;s
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_29" id="_SignificantAccountingPoliciesTextBlock-c0_cont_28"><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; ">The Company periodically
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fair value of an equity investment is determined to be below its carrying amount and the reduction is considered to be other than temporary.
In judging &#8220;other than temporary,&#8221; the Company considers the length of time and extent to which the fair value of the investment
has been less than the carrying amount of the equity investment, the near-term and long-term operating and financial prospects of the
entity and the Company&#8217;s longer-term intent of retaining its investment in the entity. The Company considers whether the fair value
of its equity method investment has declined below its carrying value whenever adverse events or changes in circumstances indicate that
recorded value may not be recoverable. If the Company considers any decline to be other than temporary (based on various factors, including
historical financial results and the overall health of the investee), then a write-down would be recorded to estimated fair 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_30" id="_SignificantAccountingPoliciesTextBlock-c0_cont_29"><ix:continuation id="_InvestmentPolicyTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">See <b>NOTE 8</b> for
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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: 92 --><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 -->10<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 3 &#8211; <span style="text-decoration:underline">SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)</span></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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is determined by applying the applicable tax rate to the invoiced amount of professional services provided. The Company reports revenue
net of PRC&#8217;s value added tax for all the periods presented in the consolidated statements of operations and comprehensive loss.
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_33" id="_SignificantAccountingPoliciesTextBlock-c0_cont_32"><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; "><b>Revenue Recognition</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>&#160;</b></p></ix:nonNumeric></ix:continuation><div>

</div><div>

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Topic 606, &#8220;Revenue from Contracts with Customers&#8221; (&#8220;ASC 606&#8221;) effective January 1, 2018. Under ASC 606, the Company
recognizes revenue when a customer obtains control of promised goods, in an amount that reflects the consideration which the Company expects
to receive in exchange for the goods. To determine revenue recognition for arrangements within the scope of ASC 606, the Company performs
the following five steps: (1) identify the contracts with a customer; (2) identify the performance obligations in the contract; (3) determine
the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when
or as the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that
the entity will collect the consideration it is entitled to in exchange for the goods it transfers to the customer.</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_35" id="_SignificantAccountingPoliciesTextBlock-c0_cont_34"><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">The Company does not offer promotional payments,
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_36" id="_SignificantAccountingPoliciesTextBlock-c0_cont_35"><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"><b><span style="text-decoration:underline">Market data services and investor relation
management services revenue</span></b></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_37" id="_SignificantAccountingPoliciesTextBlock-c0_cont_36"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_5" id="_RevenueRecognitionPolicyTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company generates these revenues by providing
services under written service contracts with its customers. Revenue related to its service offered is recognized over time as the services
are performed when the performance obligation is satisfied.</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_38" id="_SignificantAccountingPoliciesTextBlock-c0_cont_37"><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"><b><span style="text-decoration:underline">Placement agent services</span></b></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_39" id="_SignificantAccountingPoliciesTextBlock-c0_cont_38"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_7" id="_RevenueRecognitionPolicyTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company generates revenue from placement agent
services by successfully selling customers&#8217; stocks to qualified investors through registered offerings or private placement activities.
Placement agent fee is recognized when the services are completed.</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_40" id="_SignificantAccountingPoliciesTextBlock-c0_cont_39"><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"><b><span style="text-decoration:underline">Software development and post-contract maintenance</span></b></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_41" id="_SignificantAccountingPoliciesTextBlock-c0_cont_40"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_9" id="_RevenueRecognitionPolicyTextBlock-c0_cont_8"><p style="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The
Company generates revenue from software development and post-contract maintenance. The Company identifies two performance obligations,
as the customers can benefit from software development and post-contract maintenance separately. The transaction price is fixed in the
contract and the Company allocates the transaction price to software development and maintenance by reference to their relative standalone
selling price estimated. The Company determines the standalone selling price based on pricing objectives, taking into consideration market
conditions. The Company recognizes revenue of software development at a point of customer acceptance. The post-contract maintenance service
is performed on a standby ready basis and provided to the customer subsequent to the transfer of the software for a period of time, typically
12 months from customer acceptance. The Company recognizes revenue of maintenance over the service period.</span></p><p style="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_42" id="_SignificantAccountingPoliciesTextBlock-c0_cont_41"><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"><b><span style="text-decoration:underline">Commissions</span></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_43" id="_SignificantAccountingPoliciesTextBlock-c0_cont_42"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_11" id="_RevenueRecognitionPolicyTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company generates revenue from commissions
through customers&#8217; transactions in stocks by providing brokerage service for its customers. Commission revenue is recognized at
a point in time on the trade date when the performance obligation is satisfied.</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_44" id="_SignificantAccountingPoliciesTextBlock-c0_cont_43"><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"><b><span style="text-decoration:underline">Fund management services</span></b></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_45" id="_SignificantAccountingPoliciesTextBlock-c0_cont_44"><ix:continuation continuedAt="_RevenueRecognitionPolicyTextBlock-c0_cont_13" id="_RevenueRecognitionPolicyTextBlock-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Revenue from fund management services mainly includes
management fees and performance-based fees, in a typical arrangement.</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_46" id="_SignificantAccountingPoliciesTextBlock-c0_cont_45"><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">Management fees</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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services provided to funds the Company manages. Management fees are computed as a percentage of daily asset value and are recognized as
earned over the specified contract period.</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="_RevenueRecognitionPolicyTextBlock-c0_cont_16" id="_RevenueRecognitionPolicyTextBlock-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Performance-based 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>

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fee is typically calculated and recognized at a point of time when the cumulative return of the fund can be determined, and is not subject
to clawback provisions.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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

</div><!-- Field: Page; Sequence: 93 --><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 -->11<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 3 &#8211; <span style="text-decoration:underline">SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)</span></b></p><div>

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

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_50" id="_SignificantAccountingPoliciesTextBlock-c0_cont_49"><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">The following table disaggregates the Company&#8217;s
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</div><div>

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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_52" id="_SignificantAccountingPoliciesTextBlock-c0_cont_51"><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">The following table disaggregates the Company&#8217;s
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</div><div>

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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_54" id="_SignificantAccountingPoliciesTextBlock-c0_cont_53"><ix:continuation id="_RevenueRecognitionPolicyTextBlock-c0_cont_21"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Deferred revenue represents income collected but
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_55" id="_SignificantAccountingPoliciesTextBlock-c0_cont_54"><ix:nonNumeric contextRef="c0" continuedAt="_CostOfSalesPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:CostOfSalesPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Cost of Revenue</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>&#160;</b></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_56" id="_SignificantAccountingPoliciesTextBlock-c0_cont_55"><ix:continuation id="_CostOfSalesPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">Cost&#160;<span>of
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</div><div>

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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_58" id="_SignificantAccountingPoliciesTextBlock-c0_cont_57"><ix:continuation continuedAt="_ResearchAndDevelopmentExpensePolicy-c0_cont_2" id="_ResearchAndDevelopmentExpensePolicy-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span>Expenditures
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</div><div>

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respectively.</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_60" id="_SignificantAccountingPoliciesTextBlock-c0_cont_59"><ix:nonNumeric contextRef="c0" continuedAt="_AdvertisingCostsPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:AdvertisingCostsPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>Selling and Marketing
Costs</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><i>&#160;</i></p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_61" id="_SignificantAccountingPoliciesTextBlock-c0_cont_60"><ix:continuation id="_AdvertisingCostsPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span>All
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costs were </span>$<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:GoodwillImpairmentLoss" scale="0" unitRef="usd">1,007,652</ix:nonFraction><span>, $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:GoodwillImpairmentLoss" scale="0" unitRef="usd">303,079</ix:nonFraction></span>, and <span>$<ix:nonFraction contextRef="c6" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:GoodwillImpairmentLoss" scale="0" unitRef="usd">244,163</ix:nonFraction>
</span>respectively.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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

</div><!-- Field: Page; Sequence: 94 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTE 3 &#8211; <span style="text-decoration:underline">SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (continued)</span></b></p><div>

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

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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_63" id="_SignificantAccountingPoliciesTextBlock-c0_cont_62"><ix:continuation continuedAt="_LesseeLeasesPolicyTextBlock-c0_cont_2" id="_LesseeLeasesPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">On January 1, 2019,
the Company adopted ASU No. 2016-02, Leases (Topic 842), as amended, which supersedes the lease accounting guidance under Topic 840,
and generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use assets on the balance
sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements.</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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to apply practical expedients permitted under the transition method that allow the Company to use the beginning of the period of adoption
as the date of initial application, to not recognize lease assets and lease liabilities for leases with a term of twelve months or less,
to not separate non-lease components from lease components, and to not reassess lease classification, treatment of initial direct costs,
or whether an existing or expired contract contains a lease. The Company used modified retrospective method and did not adjust the prior
comparative periods. Under the new lease standard, the Company determines if an arrangement is or contains a lease at inception. Right-of-use
assets and liabilities are recognized at lease commencement date based on the present value of remaining lease payments over the lease
terms. The Company considers only payments that are fixed and determinable at the time of lease commencement. See <b>NOTE 7</b> for discussion
of finance lease and see <b>NOTE 15</b> for discussion of operating leases.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_66" id="_SignificantAccountingPoliciesTextBlock-c0_cont_65"><ix:continuation continuedAt="_SegmentReportingPolicyPolicyTextBlock-c0_cont_2" id="_SegmentReportingPolicyPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">ASC 280 &#8220;Segment reporting&#8221; establishes
standards for reporting information on operating segments in interim and annual financial statements. Operating segments are defined
as the components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing performance. Our chief operating decision makers direct the allocation
of resources to operating segments based on the profitability, cash flows, and growth opportunities of each respective segment.</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_67" id="_SignificantAccountingPoliciesTextBlock-c0_cont_66"><ix:continuation id="_SegmentReportingPolicyPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company currently has two operating segments,
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_68" id="_SignificantAccountingPoliciesTextBlock-c0_cont_67"><ix:nonNumeric contextRef="c0" continuedAt="_IncomeTaxPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:IncomeTaxPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>Income Taxes</b></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_69" id="_SignificantAccountingPoliciesTextBlock-c0_cont_68"><ix:continuation continuedAt="_IncomeTaxPolicyTextBlock-c0_cont_2" id="_IncomeTaxPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">The Company accounts
for income taxes using the asset/liability method prescribed by ASC 740, &#8220;Income Taxes.&#8221; Under this method, deferred tax
assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities
using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a
valuation allowance to offset deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some
portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized
as income or loss in the period that includes the enactment date.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_70" id="_SignificantAccountingPoliciesTextBlock-c0_cont_69"><ix:continuation id="_IncomeTaxPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company follows the accounting guidance for
uncertainty in income taxes using the provisions of ASC 740 &#8220;Income Taxes&#8221;. Using that guidance, tax positions initially
need to be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by
the tax authorities. For the years ended December 31, 2022, 2021 and 2020, the Company had no significant uncertain tax positions that
qualify for either recognition or disclosure in the financial statements. Tax years that remain subject to examination are the years
ended December 31, 2022, 2021 and 2020. The Company recognizes interest and penalties related to significant uncertain income tax positions
in other expense. No such interest and penalties incurred for the years ended December 31, 2022, 2021 and 2020.</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_71" id="_SignificantAccountingPoliciesTextBlock-c0_cont_70"><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; "><b>Foreign Currency Translation</b></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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of the Company is the U.S. dollar. The functional currency of the parent company, MMTEC, and MM Future, MM Fund, MM Capital, MM SPC,
MMBD Trading, HC securities, MM Global, Fundex SPC and MMBD Advisory is the U.S. dollar and the functional currency of Gujia is the Chinese
Renminbi (&#8220;RMB&#8221;). For the subsidiary whose functional currency is the RMB, result of operations and cash flows are translated
at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period,
and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements
of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments
resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining 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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

</div><!-- Field: Page; Sequence: 95 --><div>
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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTE 3 &#8211; <span style="text-decoration:underline">SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (continued)</span></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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in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and
liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance
sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency
other than the functional currency are included in the results of operations as incurred. All of the Company&#8217;s revenue and expense
transactions are transacted in the functional currency of the operating subsidiaries. The Company does not enter into any material transaction
in foreign currencies. Transaction gains or losses have not had, and are not expected to have, a material effect on the results of operations
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_74" id="_SignificantAccountingPoliciesTextBlock-c0_cont_73"><ix:continuation id="_ForeignCurrencyTransactionsAndTranslationsPolicyTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><ix:nonNumeric contextRef="c0" name="us-gaap:ForeignCurrencyTranslationAdjustmentDescription">The consolidated balance
sheet amounts, with the exception of equity, as of December 31, 2022 and 2021, were translated at RMB 6.9646 to $1.00 and RMB 6.3757
to $1.00, respectively. Equity accounts were stated at their historical rates. The average translation rates applied to consolidated
statements of operations and comprehensive loss and cash flows for the years ended December 31, 2022, 2021 and 2020 were RMB 6.7261,
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_75" id="_SignificantAccountingPoliciesTextBlock-c0_cont_74"><ix:nonNumeric contextRef="c0" continuedAt="_ComprehensiveIncomePolicyPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:ComprehensiveIncomePolicyPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>Comprehensive Loss</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></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_76" id="_SignificantAccountingPoliciesTextBlock-c0_cont_75"><ix:continuation id="_ComprehensiveIncomePolicyPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">Comprehensive loss is
comprised of net loss and all changes to the statements of shareholders&#8217; equity, except those due to investments by shareholders,
changes in paid-in capital and distributions to shareholders. For the Company, comprehensive loss for the years ended December 31, 2022,
2021 and 2020 consisted of net loss and unrealized income/loss from foreign currency translation adjustment.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

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awards, including share options for the purchase of the Company&#8217;s ordinary shares. In June 2018, the Financial Accounting Standards
Board (&#8220;FASB&#8221;) issued Accounting Standards Update (&#8220;ASU&#8221;) 2018-07,&#160;Compensation-Stock Compensation (Topic
718): Improvements to Nonemployee Share-Based Payment Accounting&#160;(&#8220;ASU 2018-07&#8221;) to simplify the accounting for share-based
payments to nonemployees by aligning it with the accounting for share-based payments to employees. The Company adopted ASU 2018-07 on
January&#160;1, 2019, and accounts for&#160;share-based compensation to nonemployees under the fair value method which requires all such
compensation to be calculated based on the fair value at the measurement date (generally the grant date) and recognized in the statement
of operations over the requisite service period. The Company recognized <span style="-sec-ix-hidden: hidden-fact-129">nil</span>, $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AllocatedShareBasedCompensationExpense" scale="0" unitRef="usd">1,024,361</ix:nonFraction> and $<ix:nonFraction contextRef="c6" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AllocatedShareBasedCompensationExpense" scale="0" unitRef="usd">1,005,000</ix:nonFraction> share-based compensation for the
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</div><div>

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</div><div>

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numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes
dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised
or converted into common stock or resulted in the issuance of common stock that then shared in the earnings 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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

</div><!-- Field: Page; Sequence: 96 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTE 3 &#8211; <span style="text-decoration:underline">SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (continued)</span></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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during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common
stock, common stock equivalents and potentially dilutive securities outstanding during each period. Common stock equivalents are not
included in the calculation of diluted loss per common share if their effect would be anti-dilutive. The following table presents a reconciliation
of basic and diluted net loss per common share:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_83" id="_SignificantAccountingPoliciesTextBlock-c0_cont_82"><ix:continuation id="_ScheduleOfEarningsPerShareBasicAndDilutedTableTextBlock-c0_cont_1"><ix:continuation continuedAt="_EarningsPerSharePolicyTextBlock-c0_cont_5" id="_EarningsPerSharePolicyTextBlock-c0_cont_4"><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">*</td><td style="text-align: justify"><ix:footnote id="ix_3_footnote" xml:lang="en-US">After giving effect to the reverse stock split effected on
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_84" id="_SignificantAccountingPoliciesTextBlock-c0_cont_83"><ix:continuation id="_EarningsPerSharePolicyTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">The Company did not
have any common stock equivalents and potentially dilutive common stock outstanding during the years ended December 31, 2022, 2021 and
2020.</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_85" id="_SignificantAccountingPoliciesTextBlock-c0_cont_84"><ix:nonNumeric contextRef="c0" continuedAt="mtc_RelatedPartiesPolicyTextBlock-c0_cont_1" escape="true" name="mtc:RelatedPartiesPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Related Parties</b></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_86" id="_SignificantAccountingPoliciesTextBlock-c0_cont_85"><ix:continuation id="mtc_RelatedPartiesPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">Parties are considered
to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by,
or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of
the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if
one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting
parties might be prevented from fully pursuing its own separate interests. The Company discloses all significant related party transactions
in <b>NOTE 11</b>.</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_87" id="_SignificantAccountingPoliciesTextBlock-c0_cont_86"><ix:nonNumeric contextRef="c0" continuedAt="_FiscalPeriod-c0_cont_1" escape="true" name="us-gaap:FiscalPeriod"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>Fiscal Year End</b></p><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="_SignificantAccountingPoliciesTextBlock-c0_cont_88" id="_SignificantAccountingPoliciesTextBlock-c0_cont_87"><ix:continuation id="_FiscalPeriod-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">The Company has adopted
a fiscal year end of December 31st.</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><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_89" id="_SignificantAccountingPoliciesTextBlock-c0_cont_88"><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"><b>Recent Accounting Pronouncements</b></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_90" id="_SignificantAccountingPoliciesTextBlock-c0_cont_89"><ix:continuation continuedAt="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_2" id="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In June 2016, the FASB issued ASU 2016-13, &#8220;Measurement
of Credit Losses on Financial Instruments (Topic 326)&#8221;, and issued subsequent amendments to the initial guidance, transitional
guidance and other interpretive guidance between November 2018 and March 2020 within ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11,
ASU 2020-02 and ASU 2020-03. ASU 2016-13 introduces new guidance for credit losses on instruments within its scope, which significantly
changes the way entities recognize impairment of many financial assets by requiring immediate recognition of estimated credit losses
expected to occur over their remaining life, instead of when incurred. For smaller reporting companies, the guidance is effective for
fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. All entities may adopt this ASU
through a cumulative effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is
effective (that is, a modified-retrospective approach). The amendments in ASU 2016-13 and 2018-19 are effective for the Company for fiscal
years beginning after December 15, 2022, including interim periods within those fiscal years. As the Company is an &#8220;emerging growth
company&#8221; and elects to apply for the new and revised accounting standards at the effective date for a private company, the Company
adopted ASU No. 2016-13 on January 1, 2023 and the adoption 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; "><b>&#160;</b></p></ix:continuation></ix:continuation><div>


</div><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 3 &#8211; <span style="text-decoration:underline">SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)</span></b></p><div>

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

</div><ix:continuation id="_SignificantAccountingPoliciesTextBlock-c0_cont_90"><ix:continuation id="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion
and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity&#8217;s Own Equity (Subtopic 815-40): Accounting
for Convertible Instruments and Contracts in an Entity&#8217;s Own Equity (&#8220;ASU 2020-06&#8221;), which simplifies accounting for
convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions
that are required for equity-linked contracts to qualify for scope exception, and it simplifies the diluted earnings per share calculation
in certain areas. For public business entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including
interim periods within those fiscal years. The Company adopted ASU 2020-06 on January 1, 2022. The adoption did not have an impact on
the Company&#8217;s consolidated financial statements.</p></ix:continuation></ix:continuation><div>

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

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</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">Pursuant to the investment agreement dated as
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Trading&#8221;), a Hong Kong corporation. HuaMei Trading acquired a wholly-owned subsidiary, Xiaosong Xiaoya (Chongqing) Technology Co.,
Ltd (&#8220;Xiaosong Xiaoya&#8221;) on January 25, 2021. Xiaosong Xiaoya was incorporated in People&#8217;s Republic of China (&#8220;PRC&#8221;)
on January 25, 2021. HuaMei Trading is a financial technology company which provides data service. As the Company changed its investment
strategy and considered operation risks, on December 5, 2021, HuaMei Trading has agreed to return $<ix:nonFraction contextRef="c64" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquireInvestments" scale="0" unitRef="usd">350,000</ix:nonFraction> in full before December 5,
2022. The balance of $<ix:nonFraction contextRef="c65" decimals="0" format="ixt:num-dot-decimal" name="mtc:TransferFromInvestment" scale="0" unitRef="usd">350,000</ix:nonFraction> was transferred into an interest-bearing loan. The term of the loan is December 5, 2021 to December 4,
2022, and the interest rate is <ix:nonFraction contextRef="c66" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:InvestmentInterestRate" scale="-2" unitRef="pure">3.85</ix:nonFraction>% per annum.</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"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">Pursuant to the loan
agreement dated November 5, 2021, the Company has agreed to loan $<ix:nonFraction contextRef="c67" decimals="0" format="ixt:num-dot-decimal" name="mtc:AgreedLoan" scale="0" unitRef="usd">200,000</ix:nonFraction> to HuaMei Trading. The term of the loan is from November 12,
2021, to November 11, 2022, and the interest rate is <ix:nonFraction contextRef="c68" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:ShortTermDebtInterestRateIncrease" scale="-2" unitRef="pure">3.85</ix:nonFraction>% per annum.</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_4" id="_LoansNotesTradeAndOtherReceivablesDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">Considering that the
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the loan to Huamei Trading during fiscal year ended December 31, 2021, which was included in &#8220;Other general and administrative
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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; text-align: justify; margin: 0pt 0">In December 2021, the Company extended a loan to Cacti Fintec Limited
in an amount of $<ix:nonFraction contextRef="c69" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:OtherLoansPayable" scale="6" unitRef="usd">2.1</ix:nonFraction> million. The loan bears an interest rate of <ix:nonFraction contextRef="c69" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:DebtInstrumentInterestRateStatedPercentage" scale="-2" unitRef="pure">3.78</ix:nonFraction>% per annum with maturity date in December, 2022. In December 2022,
the loan is extended to December 2023 with a modified interest rate of <ix:nonFraction contextRef="c4" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:DebtInstrumentInterestRateEffectivePercentage" scale="-2" unitRef="pure">4.35</ix:nonFraction>% per annum subsequently. In November 2022 and December 2022,
the Company extended additional two loans to Cacti Fintec Limited in the amount of $<ix:nonFraction contextRef="c70" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:InterestAndFeeIncomeLoansOtherConsumer" scale="6" unitRef="usd">1.3</ix:nonFraction> million and $<ix:nonFraction contextRef="c71" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:InterestAndFeeIncomeLoansOtherConsumer" scale="0" unitRef="usd">250,000</ix:nonFraction>, respectively. The loans
bear an interest rate of <ix:nonFraction contextRef="c3" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:DebtInstrumentInterestRateEffectivePercentage" scale="-2" unitRef="pure">4.35</ix:nonFraction>% per annum with maturity dates in <ix:nonNumeric contextRef="c72" name="mtc:MaturityDate">November 2023</ix:nonNumeric> and <ix:nonNumeric contextRef="c0" name="mtc:MaturityDate">December 2023</ix:nonNumeric>, respectively. As of December 31, 2022,
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</div><div>

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which was included in &#8220;Other general and administrative expenses&#8221; on the accompanying consolidated statements of operations
and comprehensive loss.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>
</div><div>

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in an amount of $<ix:nonFraction contextRef="c74" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:InterestAndFeeIncomeLoansOtherConsumer" scale="0" unitRef="usd">120,000</ix:nonFraction>. The loan bears an interest rate of <ix:nonFraction contextRef="c75" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:DebtInstrumentInterestRateEffectivePercentage" scale="-2" unitRef="pure">3.85</ix:nonFraction>% per annum with a maturity date in July 2023. Sun Yifan repaid $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="mtc:RepaidAmount" scale="0" unitRef="usd">75,000</ix:nonFraction>
during fiscal year ended December 31, 2022. The balance of the loan is $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="mtc:LoanAmount" scale="0" unitRef="usd">45,000</ix:nonFraction> as of December 31, 2022. The Company fully collected the
loan and interest as of reporting date.</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_8" id="_LoansNotesTradeAndOtherReceivablesDisclosureTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">In July 2022 and September
2022, the Company extended two loans to FLJ Group Limited (formerly known&#160;as &#8220;Q&amp;K International Group Limited&#8221;)
in the amount of $<ix:nonFraction contextRef="c76" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:InterestAndFeeIncomeLoansOtherConsumer" scale="0" unitRef="usd">500,000</ix:nonFraction> and $<ix:nonFraction contextRef="c77" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:InterestAndFeeIncomeLoansOtherConsumer" scale="0" unitRef="usd">100,000</ix:nonFraction>, respectively. The loans bear an interest rate of <ix:nonFraction contextRef="c78" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:DebtInstrumentInterestRateEffectivePercentage" scale="-2" unitRef="pure">3.85</ix:nonFraction>% per annum with a maturity date in July
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</div><div>

</div><ix:continuation id="_LoansNotesTradeAndOtherReceivablesDisclosureTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">In September 2022, the
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

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

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

</div><ix:nonNumeric contextRef="c0" continuedAt="_FinancingReceivablesTextBlock-c0_cont_1" escape="true" name="us-gaap:FinancingReceivablesTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 5 &#8211;&#160;<span style="text-decoration:underline">LOAN RECEIVABLE &#8211; RELATED PARTY</span></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>&#160;</b>&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation id="_FinancingReceivablesTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On January 1, 2020, the Company invested RMB&#160;<ix:nonFraction contextRef="c82" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:Investments" scale="6" unitRef="cny">5.7</ix:nonFraction>&#160;million
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in the investment agreement, pursuant to the supplementary investment agreement dated October 31, 2020, Xtranfer has agreed to return
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As of December 31, 2020, the Company has received RMB&#160;<ix:nonFraction contextRef="c23" decimals="-5" format="ixt:num-dot-decimal" name="mtc:AmountReceivedFromInvestment" scale="6" unitRef="cny">2.0</ix:nonFraction>&#160;million (approximately $<ix:nonFraction contextRef="c23" decimals="0" format="ixt:num-dot-decimal" name="mtc:AmountReceivedFromInvestment" scale="0" unitRef="usd">306,000</ix:nonFraction>) from Xtransfer. The remaining RMB&#160;<ix:nonFraction contextRef="c23" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:DepositsWithOtherFederalHomeLoanBanks" scale="6" unitRef="cny">0.6</ix:nonFraction>&#160;million
(approximately $<ix:nonFraction contextRef="c23" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DepositsWithOtherFederalHomeLoanBanks" scale="0" unitRef="usd">93,000</ix:nonFraction>) was transferred into non-interest-bearing loan and was recorded as &#8220;loan receivable - related party&#8221;
on the accompanying consolidated balance sheet as of December 31, 2020. The loan has been fully collected during the year ended December
31, 2021.</p></ix:continuation><div>

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

</div><ix:nonNumeric contextRef="c0" continuedAt="_OtherCurrentAssetsTextBlock-c0_cont_1" escape="true" name="us-gaap:OtherCurrentAssetsTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>NOTE 6 &#8211; <span style="text-decoration:underline">PREPAID EXPENSES AND
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</div><div>

</div><ix:continuation continuedAt="_OtherCurrentAssetsTextBlock-c0_cont_2" id="_OtherCurrentAssetsTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">As of December 31, 2022 and 2021, prepaid
expenses and other current assets consisted of the following:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_OtherCurrentAssetsTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfOtherAssetsAndOtherLiabilitiesTableTextBlock"><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; 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></ix:nonNumeric></ix:continuation><div>


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

</div><ix:nonNumeric contextRef="c0" continuedAt="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:PropertyPlantAndEquipmentDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>NOTE 7 &#8211;&#160;<span style="text-decoration:underline">PROPERTY AND EQUIPMENT,
NET</span></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="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_2" id="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">As of December 31, 2022
and 2021, property and equipment 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="_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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  <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>Software</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)">
    <td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="text-align: center; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
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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="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_4" id="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the years ended December 31, 2022, 2021 and
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</div><div>

</div><ix:continuation id="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company entered into a finance vehicle lease
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respectively, were included in property and equipment, net. Finance lease liabilities were nil as of December 31, 2022 and 2021. The
Company made cash payments of $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromLeasePayments" scale="0" unitRef="usd">163,301</ix:nonFraction> for finance lease liabilities during the year ended December 31, 2021, which is included within
the financing activities section on the consolidated statements of cash flows.</p></ix:continuation><div>

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

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

</div><!-- Field: Page; Sequence: 99 --><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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>&#160;</b></p><div>

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</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_2" id="_LongTermDebtTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">The Company&#8217;s
long-term investments consist of equity investments without readily determinable fair value which were accounted for using measurement
alternative as of December 31, 2022 and 2021.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_3" id="_LongTermDebtTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b><span style="text-decoration:underline">Equity Investment Using Measurement
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</div><div>

</div><ix:continuation continuedAt="_LongTermDebtTextBlock-c0_cont_4" id="_LongTermDebtTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">On July 1, 2019, the
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Ltd (&#8220;Caishang&#8221;). Since the Company does not exercise significant influence over Caishang and Caishang does not have readily
determinable fair value as a privately held Company, the investment was accounted for using measurement alternative, in which the Company
record the investment at cost, less impairment, and plus or minus subsequent adjustments for observable price changes.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>&#160;</b></p></ix:continuation><div>

</div><div>

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Since the Company no longer has significant influence over Xtransfer after the return of investment and Xtransfer does not have readily
determinable fair value as a privately held Company, the remaining investment was accounted for using measurement alternative, in which
the initial basis of the investment is the carrying amount as of October 31, 2020 and subsequently adjusted for any impairment and observable
price changes.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_LongTermDebtTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">The Company reviews its investments for impairment based on performance
and financial position of the investees as well as other evidence of market value. Such evaluation includes, but is not limited to, reviewing
the investee&#8217;s cash position, recent financing, projected and historical financial performance, cash flow forecasts and financing
needs. The Company recorded impairment on long-term investments for an amount of RMB<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="mtc:ImpairmentOnLongtermInvestments" scale="0" unitRef="cny">3,776,275</ix:nonFraction> (approximately $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="mtc:ImpairmentOnLongtermInvestments" scale="0" unitRef="usd">585,000</ix:nonFraction>) during the year
ended December 31, 2021. As a result, the carrying value of long-term investments was reduced to zero.</p></ix:continuation><div>

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

</div><ix:nonNumeric contextRef="c0" continuedAt="_AccountsPayableAndAccruedLiabilitiesDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:AccountsPayableAndAccruedLiabilitiesDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>NOTE 9 &#8211; <span style="text-decoration:underline">ACCRUED LIABILITIES
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</div><div>

</div><ix:continuation continuedAt="_AccountsPayableAndAccruedLiabilitiesDisclosureTextBlock-c0_cont_2" id="_AccountsPayableAndAccruedLiabilitiesDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">As of December 31, 2022 and 2021, accrued
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</div><div>

</div><ix:continuation continuedAt="_AccountsPayableAndAccruedLiabilitiesDisclosureTextBlock-c0_cont_3" id="_AccountsPayableAndAccruedLiabilitiesDisclosureTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" continuedAt="mtc_ScheduleOfAccruedLiabilitiesAndOtherPayablesTableTextBlock-c0_cont_1" escape="true" name="mtc:ScheduleOfAccruedLiabilitiesAndOtherPayablesTableTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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</div><div>

</div><ix:continuation id="_AccountsPayableAndAccruedLiabilitiesDisclosureTextBlock-c0_cont_3"><ix:continuation id="mtc_ScheduleOfAccruedLiabilitiesAndOtherPayablesTableTextBlock-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: 0.25in; text-align: left">*</td><td style="text-align: justify"><ix:footnote id="ix_4_footnote" xml:lang="en-US">See Note 16.</ix:footnote></td>
</tr></table></ix:continuation></ix:continuation><div>



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</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; "><b>NOTE 10 &#8211; <span style="text-decoration:underline">LOAN PAYABLE&#160;</span></b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>&#160;</b></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation id="_DebtDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">On April 22, 2020, the
Company entered into a loan of $<ix:nonFraction contextRef="c104" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NotesAndLoansPayable" scale="0" unitRef="usd">41,250</ix:nonFraction> pursuant to the Paycheck Protection Program of the Coronavirus Aid, Relief, and Economic Security
Act (the &#8220;CARES Act&#8221;) as administered by the U.S. Small Business Administration (the &#8220;SBA&#8221;). The loan proceeds
will be used to cover payroll costs, rent, interest, and utilities. The Company believes it has met the requirements for <ix:nonFraction contextRef="c104" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:ShortTermDebtPercentageBearingFixedInterestRate" scale="-2" unitRef="pure">100</ix:nonFraction>% forgiveness
on December 4, 2020. The PPP loan Forgiveness Application was approved by SBA on January 12, 2021 and the entire PPP Loan amount of $<ix:nonFraction contextRef="c105" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ParticipatingMortgageLoansParticipationLiabilitiesAmount" scale="0" unitRef="usd">41,250</ix:nonFraction>
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loan payable balance as of December 31, 2022 and 2021.</p></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>&#160;</b></p><div>

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

</div><!-- Field: Page; Sequence: 100 --><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><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; "><b>NOTE 11 &#8211;&#160;<span style="text-decoration:underline">RELATED PARTY
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</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; "><b>Loan Receivable &#8211; Related Party</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_3" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">As of December 31, 2022
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</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_4" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>Due to Related Parties</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; ">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_5" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2022 and 2021, balances of
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</div><div>

</div><ix:continuation id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">During fiscal year ended
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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>

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</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_2" id="_IncomeTaxDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>British Virgin Islands
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</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_3" id="_IncomeTaxDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">Under the current laws
of BVI, MMTEC and MMBD Trading is not subject to tax on income or capital gain. In addition, payments of dividends by the Company to
their shareholders are not subject to withholding tax in the BVI.</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; "><b>Hong Kong</b></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_5" id="_IncomeTaxDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><ix:nonNumeric contextRef="c0" name="mtc:TaxableIncomeDescription">Subsidiaries in Hong
Kong are subject to&#160;16.5% income tax on their taxable income generated from operations in Hong Kong. The first HK$2&#160;million
of profits arising in or derived from Hong Kong are taxed at 8.25% and any assessable profits over HK$2 million are taxed at 16.5%.</ix:nonNumeric> The
Company&#8217;s subsidiaries, MM Future and MM Global Capital are incorporated in Hong Kong and had a loss for the years ended December
31, 2022, 2021 and 2020. Therefore, there was no provision for income taxes in the years ended December 31, 2022, 2021 and 2020.</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_6" id="_IncomeTaxDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>Cayman Islands </b></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="_IncomeTaxDisclosureTextBlock-c0_cont_7" id="_IncomeTaxDisclosureTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">There is no income tax
for companies domiciled in the Cayman Islands. Accordingly, MM Fund, MM Capital, Fundex SPC and MM SPC do not present any income tax
provisions related to Cayman Islands tax jurisdiction, where these four companies are domiciled.</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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "></p><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; "><b>United States</b></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_9" id="_IncomeTaxDisclosureTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">MM Global was incorporated
in the State of Illinois and operates as a securities broker/dealer in New York City. MMBD Advisory is formed as an investment advisor
firm under the laws of the State of New York.&#160;MM Global and MMBD Advisory are subject to Federal, State, and Local income taxes on
its net income. MM Global and MMBD Advisory had a net loss for the years ended December 31, 2022 and 2021. As a result, no provision for
income tax has been made in the years ended December 31, 2022 and 2021. MM Global and MMBD Advisory have determined that there are no
material uncertain tax positions that require recognition or disclosure in its financial statements.</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="_IncomeTaxDisclosureTextBlock-c0_cont_10" id="_IncomeTaxDisclosureTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">MM Global and MMBD Advisory&#8217;s
income tax returns are subject to examination by the appropriate tax jurisdictions. As of December 31, 2022, MM Global and MMBD Advisory&#8217;s
federal and state tax returns generally remain open for the last three years.</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="_IncomeTaxDisclosureTextBlock-c0_cont_11" id="_IncomeTaxDisclosureTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>PRC</b></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_12" id="_IncomeTaxDisclosureTextBlock-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">Gujia was incorporated
in the PRC and are subject to PRC Enterprise Income Tax (&#8220;EIT&#8221;) on the taxable income in accordance with the relevant PRC
income tax laws. On March 16, 2007, the National People&#8217;s Congress enacted a new enterprise income tax law, which took effect on
January 1, 2008. The law applies a uniform <ix:nonFraction contextRef="c107" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EffectiveIncomeTaxRateReconciliationChangeInEnactedTaxRate" scale="-2" unitRef="pure">25</ix:nonFraction>% enterprise income tax rate to both foreign invested enterprises and domestic enterprises.
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income tax rate of <ix:nonFraction contextRef="c108" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:EffectiveIncomeTaxRateReconciliationChangeInEnactedTaxRate" scale="-2" unitRef="pure">5</ix:nonFraction>%. In the years ended December 31, 2022, 2021 and 2020, Gujia did not generate any taxable income. Therefore, there
was no provision for income taxes in the years ended December 31, 2022, 2021 and 2020.</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 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>
    </div><!-- Field: /Page --><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTE 12 &#8211;&#160;<span style="text-decoration:underline">INCOME
TAXES (continued)</span></b></p><div>

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

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_13" id="_IncomeTaxDisclosureTextBlock-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">The reconciliations
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</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_14" id="_IncomeTaxDisclosureTextBlock-c0_cont_13"><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">
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    <td colspan="2" style="font-weight: bold; text-align: center">For the<br/> Year Ended</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">For the <br/> Year Ended</td><td style="font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.125in; text-indent: -0.125in; text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; 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="padding-left: 0.125in; text-indent: -0.125in; text-align: justify">US corporate tax rate</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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  </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="_IncomeTaxDisclosureTextBlock-c0_cont_15" id="_IncomeTaxDisclosureTextBlock-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2022, 2021 and 2020, the components
of the Company&#8217;s deferred income tax assets were set forth below:</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="_IncomeTaxDisclosureTextBlock-c0_cont_16" id="_IncomeTaxDisclosureTextBlock-c0_cont_15"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock"><table cellpadding="0" cellspacing="0" style="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>Deferred Tax Assets:</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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</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_17" id="_IncomeTaxDisclosureTextBlock-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2022, the Company has a net
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NOLs from its subsidiaries as of December 31, 2022 will expire in years 2023 to 2027 if not utilized. The NOL from the MM Global and
MMBD Advisory as of December 31, 2022 will expire in years 2038 to 2042 if not utilized.</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="_IncomeTaxDisclosureTextBlock-c0_cont_18" id="_IncomeTaxDisclosureTextBlock-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">The Company provided
a valuation allowance equal to the deferred income tax asset for the years ended December 31, 2022, 2021 and 2020. The management believes
that the Company&#8217;s cumulative losses arising from recurring business of subsidiaries constituted significant strong evidence that
most of the deferred tax assets would not be realizable and this evidence outweighed the expectations that the Company would generate
future taxable income. As such, deferred tax assets arise from net operating losses are fully allowed for the years ended December 31,
2022, 2021 and 2020. The increase in the allowance was $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ValuationAllowanceDeferredTaxAssetChangeInAmount" scale="0" unitRef="usd">331,290</ix:nonFraction>, $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ValuationAllowanceDeferredTaxAssetChangeInAmount" scale="0" unitRef="usd">261,814</ix:nonFraction>, and $<ix:nonFraction contextRef="c6" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ValuationAllowanceDeferredTaxAssetChangeInAmount" scale="0" unitRef="usd">118,826</ix:nonFraction> for the years ended December 31, 2022, 2021 and
2020, respectively.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>&#160;</b></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_19" id="_IncomeTaxDisclosureTextBlock-c0_cont_18"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>Accounting for Uncertainty in Income Taxes</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>&#160;</b></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_IncomeTaxDisclosureTextBlock-c0_cont_20" id="_IncomeTaxDisclosureTextBlock-c0_cont_19"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">The tax authority of
the PRC government conducts periodic and ad hoc tax filing reviews on business enterprises operating in the PRC after those enterprises
complete their relevant tax filings. Therefore, the Company&#8217;s PRC entities&#8217; tax filings results are subject to change. It
is therefore uncertain as to whether the PRC tax authority may take different views about the Company&#8217;s PRC entities&#8217; tax
filings, which may lead to additional tax liabilities. Tax years that remain subject to examination are the years ended December 31,
2022, 2021 and 2020. </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; "><b>&#160;</b></p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_IncomeTaxDisclosureTextBlock-c0_cont_20"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">ASC 740 requires recognition
and measurement of uncertain income tax positions using a &#8220;more-likely-than-not&#8221; approach. The management evaluated the Company&#8217;s
tax positions and concluded that no provision for uncertainty in income taxes was necessary as of December 31, 2022, 2021 and 2020.</p></ix:continuation><div>

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

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

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EQUITY</span></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="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_2" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>Common Stock</b></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; ">The Company is authorized
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</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; ">Pursuant to the service
agreement dated July 21, 2020, the Company issued <ix:nonFraction contextRef="c109" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">75,000</ix:nonFraction> common shares (given effect of the Reverse Stock Split) to Tony Wayne Network
Technology Co., Limited as compensation of a Hong Kong and China based consulting program. The stock-based compensation of $<ix:nonFraction contextRef="c110" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProfessionalFees" scale="0" unitRef="usd">1,005,000</ix:nonFraction>
was recognized as part of the &#8220;professional fees&#8221; in the Company&#8217;s consolidated statement of operations and comprehensive
loss.</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="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_5" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">On February 22, 2021,
the Company entered into a Securities Purchase Agreement with certain institutional investors in connection with a registered direct offering
of <ix:nonFraction contextRef="c111" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SaleOfStockNumberOfSharesIssuedInTransaction" scale="0" unitRef="shares">430,000</ix:nonFraction> (given effect of the Reverse Stock Split) of the Company&#8217;s common shares, at a purchase price of $<ix:nonFraction contextRef="c112" decimals="1" format="ixt:num-dot-decimal" name="us-gaap:SaleOfStockPricePerShare" scale="0" unitRef="usdPershares">37.0</ix:nonFraction> per share (given
effect of the Reverse Stock Split). The Company sold the common shares for aggregate gross proceeds of $<ix:nonFraction contextRef="c111" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SaleOfStockConsiderationReceivedOnTransaction" scale="0" unitRef="usd">15,910,000</ix:nonFraction>. The net proceeds from
the transactions were $<ix:nonFraction contextRef="c111" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SaleOfStockConsiderationReceivedPerTransaction" scale="0" unitRef="usd">14,637,200</ix:nonFraction>, after deducting certain fees due to the placement agent and the Company&#8217;s transaction expenses
and will be used for working capital and general corporate purposes.&#160;</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">Pursuant to the service agreement dated September
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on December 28, 2021, as compensation of an investor relationship consulting program.&#160;The fair value of the shares on the grant date
was $<ix:nonFraction contextRef="c113" decimals="0" format="ixt:num-dot-decimal" name="mtc:TreasuryStockSharesCancelled" scale="0" unitRef="shares">319,820</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_7" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 20, 2021, the Company entered into
a Securities Purchase Agreement with a single investor pursuant to which the investor will make a $<ix:nonFraction contextRef="c114" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherInvestments" scale="0" unitRef="usd">2,000,000</ix:nonFraction> investment in the Company
in a Regulation S private placement. Under the terms of the Purchase Agreement, the investor will purchase <ix:nonFraction contextRef="c115" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesPurchaseOfAssets" scale="0" unitRef="shares">500,000</ix:nonFraction> common shares (given
effect of the Reverse Stock Split) of the Company at a purchase price of $<ix:nonFraction contextRef="c114" decimals="1" format="ixt:num-dot-decimal" name="us-gaap:SharesIssuedPricePerShare" scale="0" unitRef="usdPershares">4.0</ix:nonFraction> per share (given effect of the Reverse Stock Split). The
gross proceeds of the transaction were $<ix:nonFraction contextRef="c115" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:SaleOfStockConsiderationReceivedOnTransaction" scale="6" unitRef="usd">2.0</ix:nonFraction> million before deducting fees and other expenses.</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_8" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the restricted stock award agreement
dated December 17, 2021, the board issued <ix:nonFraction contextRef="c116" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesRestrictedStockAwardGross" scale="0" unitRef="shares">53,130</ix:nonFraction> shares (given effect of the Reverse Stock Split) to employees as 2020 awards on December
31, 2021. The fair value of the shares on the grant date was $<ix:nonFraction contextRef="c117" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RestrictedStockValueSharesIssuedNetOfTaxWithholdings" scale="0" unitRef="usd">475,514</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_9" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the restricted stock award agreement
dated December 24, 2021, the board issued <ix:nonFraction contextRef="c118" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesRestrictedStockAwardGross" scale="0" unitRef="shares">29,250</ix:nonFraction> shares (given effect of the Reverse Stock Split) to former employees on December 31,
2021. The fair value of the shares on the grant date was $<ix:nonFraction contextRef="c119" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RestrictedStockValueSharesIssuedNetOfTaxWithholdings" scale="0" unitRef="usd">229,028</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_10" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Effective on July 13, 2022, the Company has approved a reverse stock
split of the Company&#8217;s authorized and issued and outstanding shares of common stock, par value $<ix:nonFraction contextRef="c120" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:CommonStockParOrStatedValuePerShare" scale="0" unitRef="usdPershares">0.001</ix:nonFraction> per share, at a ratio of 10-for-1
(the &#8220;Reverse Stock Split&#8221;). As a result of the Reverse Stock Split, the Company&#8217;s authorized shares of common stock
reduced from <ix:nonFraction contextRef="c121" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesAuthorized" scale="0" unitRef="shares">500,000,000</ix:nonFraction> shares to <ix:nonFraction contextRef="c122" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesAuthorized" scale="0" unitRef="shares">50,000,000</ix:nonFraction> shares, and the par value per share was increased from $<ix:nonFraction contextRef="c122" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:CommonStockParOrStatedValuePerShare" scale="0" unitRef="usdPershares">0.001</ix:nonFraction> to $<ix:nonFraction contextRef="c121" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:CommonStockParOrStatedValuePerShare" scale="0" unitRef="usdPershares">0.01</ix:nonFraction>. All share and per
share amount in the accompanying financial statement for the prior periods have been retroactively adjusted to reflect the Reverse Stock
Split.</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_11" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">On August 12, 2022, the Company entered into a common stock purchase
agreement with VG Master Fund SPC (&#8220;Investor&#8221;). Under the purchase agreement, subject to specified terms and conditions, the
Company may, from time to time during the term of the purchase agreement, sell to Investor up to the lesser of (a) $<ix:nonFraction contextRef="c123" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:OtherInvestmentsAndSecuritiesAtCost" scale="6" unitRef="usd">5.5</ix:nonFraction> million of shares
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shelf registration statement, which was declared effective by the SEC on July 21, 2020. In consideration for entering into the purchase
agreement, the Company issued <ix:nonFraction contextRef="c123" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares">53,334</ix:nonFraction> shares of common stock to Investor as direct offering costs. The fair value of the shares on the
grant date was $<ix:nonFraction contextRef="c124" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:EquityFairValueAdjustment" scale="0" unitRef="usd">146,137</ix:nonFraction>. The $<ix:nonFraction contextRef="c123" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CapitalizedContractCostGross" scale="0" unitRef="usd">146,137</ix:nonFraction> was capitalized and was subsequently reduced to $<ix:nonFraction contextRef="c123" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredOfferingCosts" scale="0" unitRef="usd">112,748</ix:nonFraction> which was included in &#8220;Deferred offering
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to the Investor after reduction of $<ix:nonFraction contextRef="c123" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CapitalUnitsTotalCostToInvestors" scale="0" unitRef="usd">33,389</ix:nonFraction> direct offering cost. The proceeds will be used for working capital and general corporate purposes.</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_12" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On October 26, 2022, the Company adopted a resolution
to amend the Company&#8217;s Memorandum and Articles of Association to increase the maximum number of shares that the Company is authorized
to issue from <ix:nonFraction contextRef="c126" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesAuthorized" scale="0" unitRef="shares">50,000,000</ix:nonFraction> to <ix:nonFraction contextRef="c127" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesAuthorized" scale="0" unitRef="shares">5,000,000,000</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>

</div><!-- Field: Page; Sequence: 103 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->21<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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 &#8211;&#160;<span style="text-decoration:underline">SHAREHOLDERS&#8217;
EQUITY (continued)</span></b></p><div>

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

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_13" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On October 29, 2022, the Company entered into
a Securities Purchase Agreement (the &#8220;Agreement 1&#8221;) with an investor. Pursuant to the Agreement 1, the Company agreed to sell
to this investor <ix:nonFraction contextRef="c128" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:InvestmentOwnedBalanceShares" scale="0" unitRef="shares">400,000</ix:nonFraction> shares of common stock at a purchase price of $<ix:nonFraction contextRef="c128" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:SharePrice" scale="0" unitRef="usdPershares">0.59</ix:nonFraction> for a consideration of $<ix:nonFraction contextRef="c128" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationContingentConsiderationAsset" scale="0" unitRef="usd">236,000</ix:nonFraction>. The Company issued <ix:nonFraction contextRef="c129" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NoncashOrPartNoncashAcquisitionNoncashFinancialOrEquityInstrumentConsiderationSharesIssued1" scale="0" unitRef="shares">400,000</ix:nonFraction>
shares to this purchaser on December 3, 2022 and received consideration on December 30, 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><div>
</div><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">On November 23, 2022, the Company entered into
a Securities Purchase Agreement (the &#8220;Agreement 2&#8221;) with an investor. Pursuant to the Agreement 2, the Company agreed to sell
to this investor <ix:nonFraction contextRef="c130" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:InvestmentOwnedBalanceShares" scale="0" unitRef="shares">500,000</ix:nonFraction> shares of common stock at a purchase price of $<ix:nonFraction contextRef="c130" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:SharePrice" scale="0" unitRef="usdPershares">0.515</ix:nonFraction> for a consideration of $<ix:nonFraction contextRef="c130" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationContingentConsiderationAsset" scale="0" unitRef="usd">257,500</ix:nonFraction>. The Company issued <ix:nonFraction contextRef="c131" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NoncashOrPartNoncashAcquisitionNoncashFinancialOrEquityInstrumentConsiderationSharesIssued1" scale="0" unitRef="shares">500,000</ix:nonFraction>
shares to this purchaser on December 7, 2022 and received consideration on December 23, 2022.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_15" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>Share-based compensation</b></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_16" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On January 14, 2020, the 2019 Share Incentive Plan was approved by
the Company&#8217;s shareholders at the Annual Meeting, the purpose of which is to provide an incentive for employees and consultant contributing
to the Company. The Company has Stock Option Plan with <ix:nonFraction contextRef="c132" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesReverseStockSplits" scale="0" unitRef="shares">200,000</ix:nonFraction> shares (given effect of the Reverse Stock Split) authorized for issuance
under the Plan. The fair value of restricted share units granted with service conditions is estimated based on the fair market value of
the underlying ordinary shares of the Company on the date of grant.</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_17" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the service agreement dated July 21,
2020, the Company issued <ix:nonFraction contextRef="c110" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RestrictedStockSharesIssuedNetOfSharesForTaxWithholdings" scale="0" unitRef="shares">75,000</ix:nonFraction> shares (given effect of the Reverse Stock Split) to Tony Wayne Network Technology Co., Limited (&#8220;Tony
Wayne&#8221;) on July 30, 2020 as compensation of a Hong Kong and China based consulting program.&#160;The fair value of the shares on
the grant date was $<ix:nonFraction contextRef="c110" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RestrictedStockValueSharesIssuedNetOfTaxWithholdings" scale="0" unitRef="usd">1,005,000</ix:nonFraction>. The Company recognized the $<ix:nonFraction contextRef="c133" decimals="0" format="ixt:num-dot-decimal" name="mtc:StockBasedCompensationAmountReceived" scale="0" unitRef="usd">1,005,000</ix:nonFraction> in full as stock-based compensation to nonemployee during the year
ended December 31, 2020.</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">Pursuant to the service agreement dated September
25, 2021, the Company issued <ix:nonFraction contextRef="c134" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RestrictedStockSharesIssuedNetOfSharesForTaxWithholdings" scale="0" unitRef="shares">42,620</ix:nonFraction> shares (given effect of the Reverse Stock Split) to Fortune Fintech Limited (&#8220;Fortune&#8221;)
on December 28, 2021 as compensation of an investor relationship consulting program.&#160;The fair value of the shares on the grant date
was $<ix:nonFraction contextRef="c135" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RestrictedStockValueSharesIssuedNetOfTaxWithholdings" scale="0" unitRef="usd">319,820</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_19" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_18"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Subject to 2019 Share Incentive Plan, pursuant
to the restricted stock award agreement dated December 17, 2021, the board issued <ix:nonFraction contextRef="c136" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RestrictedStockSharesIssuedNetOfSharesForTaxWithholdings" scale="0" unitRef="shares">53,130</ix:nonFraction> shares (given effect of the Reverse Stock Split)
to employees as 2020 awards on December 31, 2021. The fair value of the shares on the grant date was $<ix:nonFraction contextRef="c136" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RestrictedStockValueSharesIssuedNetOfTaxWithholdings" scale="0" unitRef="usd">475,514</ix:nonFraction>. Pursuant to the restricted
stock award agreement dated December 24, 2021, the board issued <ix:nonFraction contextRef="c118" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RestrictedStockSharesIssuedNetOfSharesForTaxWithholdings" scale="0" unitRef="shares">29,250</ix:nonFraction> shares (given effect of the Reverse Stock Split) to former employees
on December 31, 2021. The fair value of the shares on the grant date was $<ix:nonFraction contextRef="c137" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RestrictedStockValueSharesIssuedNetOfTaxWithholdings" scale="0" unitRef="usd">229,028</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_20" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_19"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company recognized the fair value of the
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this report, all the authorized shares under the 2019 Share Incentive Plan were issued.</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="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_20"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On January 17, 2022, the 2021 Share Incentive Plan was approved by
the Company&#8217;s shareholders at the Annual Meeting, the purpose of which is to provide an incentive for employees and consultant contributing
to the Company. The Company has Stock Option Plan with <ix:nonFraction contextRef="c138" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesReverseStockSplits" scale="0" unitRef="shares">300,000</ix:nonFraction> shares (given effect of the Reverse Stock Split) authorized for issuance
under the Plan. The fair value of restricted share units granted with service conditions is estimated based on the fair market value of
the underlying ordinary shares of the Company on the date of grant. As of the date of this report,&#160;there were <ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesReverseStockSplits" scale="0" unitRef="shares">300,000</ix:nonFraction> shares (given
effect of the Reverse Stock Split) available for issuance under the 2021 Share Incentive Plan.</p></ix:continuation><div>

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

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RESERVE</span></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>

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regulations. Appropriation to the statutory reserve by the Company is based on profit arrived at under PRC accounting standards for business
enterprises for each year. The profit arrived at must be set off against any accumulated losses sustained by the Company in prior years
before allocation is made to the statutory reserve. Appropriation to the statutory reserve must be made before distribution of dividends
to shareholders. The appropriation is required until the statutory reserve reaches <ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" name="mtc:PercentageOfRegisteredCapital" scale="-2" unitRef="pure">50</ix:nonFraction>% of the registered capital. This statutory reserve
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</div><div>

</div><ix:continuation id="mtc_StatutoryReserveTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">Gujia had sustained
losses since establishment. As of December 31, 2022, 2021 and 2020, no appropriation to statutory reserves was required as it incurred
recurring net losses.</p></ix:continuation><div>

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

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

</div><!-- Field: Page; Sequence: 104 --><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 -->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; text-align: center"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#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 15 &#8211;&#160;<span style="text-decoration:underline">COMMITMENTS
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</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; "><b>Operating Leases</b></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="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_3" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><ix:nonNumeric contextRef="c0" name="us-gaap:LessorOperatingLeaseDescription">The Company leases office
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</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_4" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_3"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfFutureMinimumRentalPaymentsForOperatingLeasesTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeasesFutureMinimumPaymentsDueInThreeYears" scale="0" unitRef="usd">463,187</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeasesFutureMinimumPaymentsDueInFourYears" scale="0" unitRef="usd">407,941</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OperatingLeasesFutureMinimumPaymentsDue" scale="0" unitRef="usd">1,129,222</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="mtc:ImputedInterest" scale="0" unitRef="usd">75,648</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Total lease liabilities</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:FinanceLeaseLiabilityPaymentsDue" scale="0" unitRef="usd">1,053,574</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</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:LongTermDebtCurrent" scale="0" unitRef="usd">405,591</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
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</div><div>

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

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</div><div>

</div><ix:continuation id="_LossContingencyDisclosures-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">In the normal course of business, MM Global is engaged in various trading
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to regulatory trading inquiries and investigations to determine whether any violations of federal securities or FINRA rules may have occurred.
During fiscal year ended December 31, 2022, FINRA&#8217;s Department of Enforcement concluded its investigation and alleges that there
have been violations of the federal securities laws and FINRA rules. FINRA has issued the settlement for MMGS with a fine of $<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SettlementAssetsCurrent" scale="0" unitRef="usd">450,000</ix:nonFraction>
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<ix:nonNumeric contextRef="c0" format="ixt-sec:durwordsen" name="mtc:CustomerTermPeriod">two years</ix:nonNumeric>. The settlement also prohibits MMGS from engaging in any business in which MMGS provides market access to customers unless and
until a registered principal or officer of MMGS certifies in writing to FINRA that the firm revised and enhanced its AML and supervisory
procedures related to detecting and investigating suspicious trading activity and potential market manipulation. During fiscal year ended
December 31, 2022, the Company had made payment in the amount of $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsForFees" scale="0" unitRef="usd">153,450</ix:nonFraction> and as of December 31, 2022, the payable to FINRA was in the
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

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</div><div>

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</div><div>

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</div><div>

</div><ix:continuation continuedAt="_ConcentrationRiskDisclosureTextBlock-c0_cont_4" id="_ConcentrationRiskDisclosureTextBlock-c0_cont_3"><ix:nonNumeric contextRef="c0" continuedAt="_SchedulesOfConcentrationOfRiskByRiskFactorTextBlock-c0_cont_1" escape="true" name="us-gaap:SchedulesOfConcentrationOfRiskByRiskFactorTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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</div><div>

</div><ix:continuation id="_ConcentrationRiskDisclosureTextBlock-c0_cont_4"><ix:continuation id="_SchedulesOfConcentrationOfRiskByRiskFactorTextBlock-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: 24px"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</span></td> <td style="text-align: justify"><ix:footnote id="ix_5_footnote" xml:lang="en-US"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Less than 10%</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; "><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: 105 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->23<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><div>

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

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</div><div>

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as an introducing broker that clears all transactions through a clearing broker dealer and earns commission income, placement agent services
fee and other related income from customers. Unallocated amounts that do not relate to an operating segment have been allocated to &#8220;Unallocated.&#8221;
Since most of the Company&#8217;s long-lived assets are located in the PRC, no geographical information on long-lived assets is presented.
Refer to Note 3 for disaggregated revenue information by geographical region attributed on the basis of the location where the revenue
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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">The following tables present summary information by segment:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_SegmentReportingDisclosureTextBlock-c0_cont_3"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfSegmentReportingInformationBySegmentTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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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">&#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; ">
    <td>&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><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">DEPRECIATION AND AMORTIZATION</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-154">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</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:DepreciationAndAmortization" scale="0" unitRef="usd">40,130</ix:nonFraction></td><td style="padding-bottom: 1.5pt; 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">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-155">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-156">-</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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    <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">&#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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    <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="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-158">-</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; ">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">&#160;</p><div>

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

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

</div><!-- Field: Page; Sequence: 106 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_SubsequentEventsTextBlock-c0_cont_1" escape="true" name="us-gaap:SubsequentEventsTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b>NOTE 19 &#8211; <span style="text-decoration:underline">SUBSEQUENT
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</div><div>

</div><ix:continuation continuedAt="_SubsequentEventsTextBlock-c0_cont_2" id="_SubsequentEventsTextBlock-c0_cont_1"><p style="font: 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
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</div><div>

</div><ix:continuation continuedAt="_SubsequentEventsTextBlock-c0_cont_3" id="_SubsequentEventsTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">Except as set forth
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financial statements.</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="_SubsequentEventsTextBlock-c0_cont_4" id="_SubsequentEventsTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; ">On February 22, 2023,
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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; ">On February 24, 2023,
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</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"></p><div>

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
20-F
(Mark one)
☐
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
for the transition period from ____________to ____________
Commission file number
001-38766
MMTEC, INC.
(Exact name of Registrant as specified in its charter)
British Virgin Islands
(Jurisdiction of incorporation or organization)
c/o MM Future Technology Limited
Room 2302, 23rd Floor
FWD Financial Center
308 Des Voeux Road Central
Sheung Wan
,
Hong Kong
Tel: +852 36908356
(Address of principal executive offices)
Xiangdong Wen
, Chief Executive Officer
c/o MM Future Technology Limited
FWD Financial Center
308 Des Voeux Road Central
Sheung Wan
,
Hong Kong
Tel:
+852
36908356
(Name, Telephone, E-mail and/or Facsimile Number
and Address of Company Contact Person)
Securities registered or to be registered pursuant
to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which
registered
Common Shares, par value $0.01
MTC
The NASDAQ Stock Market LLC
Securities registered or to be registered pursuant
to Section 12(g) of the Act:
None.
Securities for which there is a reporting obligation
pursuant to Section 15(d) of the Act:
None.
On
April 13, 2023, the issuer had
85,145,041
shares
issued and outstanding.
Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act.
Yes ☐
No
☒
If this report is an annual or transition report,
indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934.
Yes ☐
No
☒
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes
☒             No
☐
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes
☒             No
☐
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of "large
accelerated filer, "accelerated filer," and "emerging growth company" in Rule 12b-2 of the Exchange Act..
☐ Large Accelerated filer
☐ Accelerated filer
☒
Non-accelerated filer
Emerging growth company
☒
If an emerging growth company that prepares its
financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition
period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
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:
☒
US 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
☒
Table
of Contents
Page
PART I
ITEM 1.
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
1
ITEM 2.
OFFER STATISTICS AND EXPECTED TIMETABLE
1
ITEM 3.
KEY INFORMATION
1
ITEM 4.
INFORMATION ON THE COMPANY
29
ITEM 4A.
UNRESOLVED STAFF COMMENTS
44
ITEM 5.
OPERATING AND FINANCIAL REVIEW AND PROSPECT
44
ITEM 6.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
55
ITEM 7.
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
61
ITEM 8.
FINANCIAL INFORMATION
62
ITEM 9.
THE OFFER AND LISTING
63
ITEM 10.
ADDITIONAL INFORMATION
64
ITEM 11.
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
72
ITEM 12.
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
72
PART II
ITEM 13.
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
73
ITEM 14.
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
73
ITEM 15.
CONTROLS AND PROCEDURES
73
ITEM 16.
RESERVED
74
ITEM 16A.
AUDIT COMMITTEE FINANCIAL EXPERT.
74
ITEM 16B.
CODE OF ETHICS.
74
ITEM 16C.
PRINCIPAL ACCOUNTANT FEES AND SERVICES.
74
ITEM 16D.
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.
75
ITEM 16E.
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.
75
ITEM 16F.
CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
75
ITEM 16G.
CORPORATE GOVERNANCE
75
ITEM 16H.
MINE SAFETY DISCLOSURE
75
ITEM 16I.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
75
PART III
ITEM 17.
FINANCIAL STATEMENTS
76
ITEM 18.
FINANCIAL STATEMENTS
76
ITEM 19.
EXHIBITS
76
i
CERTAIN INFORMATION
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.
Except where the context otherwise requires and
for purposes of this Annual Report only:
Depending on the context,
the terms "we," "us," "our company," and "our" refer to MMTEC, INC., a BVI company, and
its consolidated subsidiaries:
●
MM Future Technology Ltd. ("MM Future"), a Hong Kong incorporated limited company.
●
MM Fund Services Limited ("MM Fund"), a Cayman Islands incorporated limited company.
●
MM Capital Management Limited ("MM Capital"), a Cayman Islands incorporated limited company.
●
MM Fund SPC ("MM SPC"), a Cayman Islands incorporated segregated portfolio company.
●
Gujia (Beijing) Technology Co., Ltd ("Gujia"), a PRC incorporated limited company.
●
Meimei Zhengtong (Beijing) Technology Co., Ltd., a PRC incorporated entity (dissolved effective as of June 8, 2018).
●
MMBD Trading Limited ("MMBD Trading"), a British Virgin Islands incorporated limited company.
●
MM Global Securities, INC. ("MM Global"), a State of Illinois incorporated limited company.
●
HC Securities (HK) Limited ("HC Securities"), formerly known as MM Global Capital Limited, a Hong Kong incorporated limited company.
●
MMBD Investment Advisory Company Limited ("MMBD Advisory"), a State of New York incorporated limited company.
●
Fundex SPC ("Fundex SPC"), a Cayman Islands incorporated segregated portfolio company.
●
"common shares" refer to our common shares, $0.01 par value per share,
●
"China" and "PRC" refer to the People's Republic of China, excluding, for the purposes of this report only, Macau, Taiwan and Hong Kong, and
●
all references to "RMB," "yuan" and "Renminbi" are to the legal currency of China, and all references to "USD," "$", and "U.S. dollars" are to the legal currency of the United States.
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
ii
FORWARD-LOOKING STATEMENTS
This Annual Report contains
"forward-looking statements" that represent our beliefs, projections and predictions about future events. All statements other
than statements of historical fact are "forward-looking statements" including any projections of earnings, revenue or other
financial items, any statements of the plans, strategies and objectives of management for future operations, any statements concerning
proposed new projects or other developments, any statements regarding future economic conditions or performance, any statements of management's
beliefs, goals, strategies, intentions and objectives, and any statements of assumptions underlying any of the foregoing. Words such as
"may", "will", "should", "could", "would", "predicts", "potential",
"continue", "expects", "anticipates", "future", "intends", "plans",
"believes", "estimates" and similar expressions, as well as statements in the future tense, identify forward-looking
statements.
These statements are necessarily
subjective and involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance
or achievements, or industry results, to differ materially from any future results, performance or achievements described in or implied
by such statements. Actual results may differ materially from expected results described in our forward-looking statements, including
with respect to correct measurement and identification of factors affecting our business or the extent of their likely impact, the accuracy
and completeness of the publicly available information with respect to the factors upon which our business strategy is based on the success
of our business.
Forward-looking statements
should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of whether, or the
times by which, our performance or results may be achieved. Forward-looking statements are based on information available at the time
those statements are made and management's belief as of that time with respect to future events and are subject to risks and uncertainties
that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements.
Important factors that could cause such differences include, but are not limited to, those factors discussed under the headings "Risk
Factors", "Operating and Financial Review and Prospects," "Information on the Company" and elsewhere in
this Annual Report.
This Annual Report should
be read in conjunction with our audited financial statements and the accompanying notes thereto, which are included in Item 18 of this
Annual Report.
iii
PART I
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not required.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not required.
ITEM 3. KEY INFORMATION
A.
[Reserved]
B.
Capitalization and Indebtedness
Not required.
C.
Reasons for the Offer and Use of Proceeds
Not required.
D.
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
We have incurred substantial losses in recent
periods and may incur losses in the future.
We have incurred substantial
losses in several recent periods as we have sought to expand our operations. We recorded net losses of $5,645,376, $7,050,755 and $3,181,596
for the years ended December 31, 2022, 2021 and 2020, respectively. We may incur losses in future periods. If our future revenues do not
increase sufficiently, or even if our future revenues increase but we are unable to manage our expenses, we may not achieve and maintain
profitability in the future periods.
Our ability to protect the confidential
information of our users may be adversely affected by cyber-attacks, computer viruses, physical or electronic break-ins or similar disruptions.
Our platform processes certain
personal and other sensitive data from our users, which makes it an attractive target and potentially vulnerable to cyber-attacks, computer
viruses, physical or electronic break-ins or similar disruptions. While we have taken steps to protect the confidential information that
we have access to, our security measures could be breached. Because techniques used to sabotage or obtain unauthorized access to systems
change frequently and generally are not recognized until they are launched against a target, we may be unable to anticipate these techniques
or to implement adequate preventative measures. Any accidental or willful security breaches or other unauthorized access to our platform
could cause confidential user information to be stolen and used for criminal purposes. Security breaches or unauthorized access to confidential
information could also expose us to liability related to the loss of the information, time-consuming and expensive litigation and negative
publicity. If security measures are breached because of third-party action, employee error, malfeasance or otherwise, or if design flaws
in our technology infrastructure are exposed and exploited, our relationships with borrowers and investors could be severely damaged,
we could incur significant liability and our business and operations could be adversely affected. In addition, we expect the secure transmission
of confidential information over public networks to be a critical element of our operations. Our networks, those of our third-party service
vendors, and associated clearing corporations, and our customers may be vulnerable to unauthorized access, computer viruses and other
security problems. Persons who circumvent security measures could wrongfully use our information or cause interruptions or malfunctions
in our operations, which could make our customers hesitant to use our electronic marketplaces. We may be required to expend significant
resources to protect against the threat of security breaches or to alleviate problems, including reputational harm and litigation, caused
by any breaches.
1
We may pursue strategic alliances, acquisitions
or joint ventures, which could present unforeseen integration obstacles.
These acquisitions may be
necessary in order for us to enter into or develop new product areas. Strategic alliances, acquisitions, joint ventures involve a number
of risks and present financial, managerial and operational challenges, including:
●
potential disruption of our ongoing business and product development and distraction of management,
●
difficulty retaining and integrating personnel and integrating financial and other systems,
●
the necessity of hiring additional management and other critical personnel and integrating them into our current operations,
●
increasing the scope, geographic diversity and complexity of our operations,
●
potential dependence upon, and exposure to liability, losses or reputational damage relating to systems, controls and personnel that are not under our control,
●
potential unfavorable reaction to our strategic alliance, acquisition or joint venture strategy by our customers,
●
to the extent that we pursue business opportunities outside the U.S., exposure to political, economic, legal, operational and other risks that are inherent in operating in a foreign country, including risks of possible nationalization, expropriation, price controls, capital controls, exchange controls and other restrictive governmental actions, as well as the outbreak of hostilities,
●
conflicts or disagreements between any strategic alliance or joint venture partners and us, and
●
exposure to additional liabilities of any acquired business, strategic alliance or joint venture.
As a result of these risks
and challenges, we may not realize any anticipated benefits from strategic alliances, acquisitions or joint ventures, and such strategic
alliances, acquisitions or joint ventures may in fact materially adversely affect our business, financial condition and results of operations.
If we are unable to continue to identify
and exploit new market opportunities, our future revenues may decline and as a result our business, financial condition and results of
operations could be materially adversely affected.
As more participants enter
our markets, the resulting competition often leads to lower commissions. This may result in a decrease in future revenues in a particular
market even if the volume of trades we handle in that market increases. We may not be able to attract new customers or successfully enter
new markets. If we are unable to continue to identify and exploit new market opportunities on a timely and cost-effective basis, our future
revenues may decline and as a result our business, financial condition and results of operations could be materially adversely affected.
Our ability to retain our key employees
and the ability of certain key employees to devote adequate time to us is critical to the success of our business, and failure to do so
may adversely affect our future revenues and as a result could materially adversely affect our business, financial condition and results
of operations.
Our people are our most important
resource and our success depends on the efforts and talent of our employees, including risk management, software engineering, financial
and marketing personnel. We must retain the services of our key employees and strategically recruit and hire new talented employees to
obtain customer transactions that generate substantially all our revenues. If any of our key employees, including Xiangdong Wen and Min
Kong, were to join an existing competitor, form a competing company, or otherwise leave us, some of our customers could choose to use
the services of that competitor or another competitor instead of our services, which could adversely affect our future revenues and as
a result could materially adversely affect our business, financial condition and results of operations. Our future success depends on
our continued ability to attract, develop, motivate and retain qualified and skilled employees. Competition for highly skilled technical,
risk management and financial personnel is extremely intense. We may not be able to hire and retain these personnel at compensation levels
consistent with our existing compensation and salary structure. Some of the companies with which we compete for experienced employees
have greater resources than we have and may be able to offer more attractive terms of employment. In addition, we invest significant time
and expenses in training our employees, which increases their value to competitors who may seek to recruit them. If we fail to retain
our employees, we could incur significant expenses in hiring and training their replacements, and the quality of our services and our
ability to serve borrowers and investors could diminish, resulting in a material adverse effect to our business.
2
Difficult market conditions, economic conditions
and geopolitical uncertainties could adversely affect our business in many ways by negatively impacting our future revenues in the financial
markets in which we offer services, which could have a material adverse effect on our business, financial condition and results of operations.
Difficult market conditions,
economic conditions and geopolitical uncertainties have in the past adversely affected and may in the future adversely affect our business
and profitability. Our business and financial services industry in general are directly affected by national and international economic
and political conditions, broad trends in business and finance, the level and volatility of interest rates, changes in and uncertainty
regarding tax laws and substantial fluctuations in the volume and price levels of securities transactions. The financial markets and the
global financial services business are, by their nature, risky and volatile and are directly affected by many national and international
factors that are beyond our control. Any one of these factors may cause a substantial decline in the U.S. and global financial services
markets, resulting in reduced trading volume. These events could have a material adverse effect on our results and profitability. These
factors include:
●
economic and political conditions in China, the U.S., Europe and elsewhere in the world,
●
concerns about terrorism, war and other armed hostilities,
●
concerns over inflation and wavering institutional and consumer confidence levels,
●
the availability of cash for investment by our dealer customers and their customers,
●
the level and volatility of interest rates and foreign currency exchange rates,
●
the level and volatility of trading in certain equity and commodity markets, and
●
currency values.
In addition, any prolonged
slowdown in the Chinese or global economy may have a negative impact on our business, results of operations and financial condition. Economic
conditions in China are sensitive to global economic conditions. The global financial markets have experienced significant disruptions
since 2008 and the United States, Europe and other economies have experienced periods of recession. The recovery from the lows of 2008
and 2009 has been uneven and there are new challenges, including the escalation of the European sovereign debt crisis from 2011 and the
slowdown of China's economic growth since 2012 which may continue. There is considerable uncertainty over the long-term effects
of the expansionary monetary and fiscal policies adopted by the central banks and financial authorities of some of the world's leading
economies, including the United States and China. There have also been concerns about the economic effect of the tensions in the relationship
between China and surrounding Asian countries. Adverse economic conditions could have negative adverse effects on our business and financial
conditions. Additionally, continued turbulence in the international markets may adversely affect our ability to access the capital markets
to meet liquidity needs.
Employee misconduct or error could harm
us by impairing our ability to attract and retain customers and subjecting us to significant legal liability and reputational harm; moreover,
this type of misconduct is difficult to detect and deter and error is difficult to prevent.
Employee misconduct or error
could subject us to financial losses and regulatory sanctions and could seriously harm our reputation and negatively affect our business.
It is not always possible to deter employee misconduct, and the precautions taken to prevent and detect employee misconduct may not always
be effective. Misconduct by employees could include engaging in improper or unauthorized transactions or activities, failing to properly
supervise other employees, or improperly using confidential information. Employee errors, including mistakes in executing, recording or
processing transactions for customers, could cause us to enter into transactions that customers may disavow and refuse to settle, which
could expose us to the risk of material losses even if the errors are detected and the transactions are unwound or reversed. If our customers
are not able to settle their transactions on a timely basis, the time in which employee errors are detected may be increased and our risk
of material loss could be increased. The risk of employee error or miscommunication may be greater for products that are new or have non-standardized
terms. It is not always possible to deter employee misconduct or error, and the precautions we take to detect and prevent this activity
may not be effective in all cases.
3
Financial services firms are highly regulated,
and the increased regulatory scrutiny over the last several years may increase the risk of financial liability and reputational harm resulting
from adverse regulatory actions
In April 2019, the Company
acquired the remaining 75.1% of outstanding securities of MMBD Trading Ltd., a British Virgin Islands company ("MMBD"). The
acquisition closed on October 18, 2019, following the receipt by the Company of requisite corporate and regulatory approvals, including,
without limitation, FINRA CMA application approval, and the Company's Audit Committee's review and approval of the terms and
provisions of this transaction involving related parties. Following and as a result of this acquisition, MMBD has become a wholly-owned
subsidiary of the Company. In March 23, 2020, the Company acquired all outstanding securities of MMBD Investment Advisory Company Limited
("MMBD Advisory") for a consideration of $1,000. Prior to this transaction, all outstanding securities of MMBD Advisory were
owned by Hinman Au, a director, and 1.7% shareholder of the Company. MMBD Advisory was formed in January 2018 in the U.S. and is registered
as an investment advisor firm under the laws of the State of New York on May 7, 2018. Over the last several years, financial services
firms have been operating in an evolving regulatory environment. The industry has experienced an extended period of significant change
in laws and regulations governing the financial services industry, as well as increased scrutiny from various regulators. Penalties and
fines imposed by regulatory authorities have increased substantially in recent years. We may be adversely affected by changes in the interpretation
or enforcement of existing laws, rules, and regulations. There is also increased regulatory scrutiny (and related compliance costs) as
we continue to grow and surpass certain consolidated asset thresholds established under the Dodd-Frank Act, which have the effect of imposing
enhanced standards and requirements on larger institutions. Broker-dealers and investment advisers are subject to regulations covering
all aspects of the securities business, including, but not limited to: sales and trading methods; trade practices among broker-dealers;
use and safekeeping of clients' funds and securities; capital structure of securities firms; anti-money laundering efforts; recordkeeping;
and the conduct of directors, officers and employees. Any violation of these laws or regulations could subject us to the following events,
any of which could have a material adverse effect on our business, financial condition and prospects: civil and criminal liability; sanctions,
which could include the revocation of our subsidiaries' registrations as investment advisers or broker-dealers; the revocation of
the licenses of our financial advisors; censures; fines; or a temporary suspension or permanent bar from conducting business. Failure
to comply with regulatory capital requirements primarily applicable to our company, our bank subsidiaries, or our broker-dealer subsidiaries
would significantly harm our business.
Growth of our business could increase costs
and regulatory and integration risks
Integrating acquired businesses,
providing a platform for new businesses, and partnering with other firms involve risks and present financial, managerial, and operational
challenges. We may incur significant expense in connection with expanding our existing businesses, recruiting financial advisors, or making
strategic acquisitions or investments. Our overall profitability would be negatively affected if investments and expenses associated with
such growth are not matched or exceeded by the revenues derived from such investments or growth. Expansion may also create a need for
additional compliance, documentation, risk management, and internal control procedures, and often involves hiring additional personnel
to address these procedures. To the extent such procedures are not adequate or not adhered to with respect to our expanded business or
any new business, we could be exposed to a material loss or regulatory sanction. Financial services firms are subject to numerous actual
or perceived conflicts of interest, which are routinely examined by U.S. federal and state regulators and SROs such as FINRA. Our risk
management processes include addressing potential conflicts of interest that arise in our business. Management of potential conflicts
of interest has become increasingly complex as we expand our business activities. A perceived or actual failure to address conflicts of
interest adequately could affect our reputation, the willingness of clients to transact business with us or give rise to litigation or
regulatory actions. Therefore, there can be no assurance that conflicts of interest will not arise in the future that could cause result
in material harm to our business and financial condition.
We are generally subject to risks inherent
in doing business in the financial markets, and any failure to develop effective compliance and reporting systems could result in regulatory
penalties in the applicable jurisdiction and our business could be adversely affected.
There are certain additional
political, economic, legal, regulatory, operational and other risks inherent in doing business in international financial markets. These
risks include:
●
less developed automation in exchanges, depositories and national clearing systems,
●
additional or unexpected changes in regulatory and capital requirements,
4
●
the impact of the laws and regulations of foreign governmental and regulatory authorities of each country in which we conduct business,
●
possible nationalization, expropriation and regulatory, political and price controls,
●
difficulties in staffing and managing international operations,
●
capital controls and other restrictive governmental actions,
●
any failure to develop effective compliance and reporting systems, which could result in regulatory penalties in the applicable jurisdiction,
●
fluctuations in currency exchange rates,
●
reduced protections for intellectual property rights,
●
adverse labor laws,
●
outbreak of hostilities, and
●
potentially adverse tax consequences arising from compliance with foreign laws and regulations to which our international subsidiaries are subject.
In many countries, the laws
and regulations applicable to the securities and financial services industries are uncertain and evolving, and it may be difficult for
us to determine the exact requirements of local laws in every market. Our inability to remain in compliance with local laws and regulations
in a particular foreign market could have a significant and negative effect not only on our businesses in that market but also on our
reputation generally. If we are unable to manage any of these risks effectively, our business could be adversely affected.
If the value of the U.S. dollar against
RMB in which we pay expenses continues to decline or if the value of the U.S. dollar against RMB in which we earn revenues improves dramatically,
our financial results could suffer.
Significant exchange rate
fluctuations can impact our results. Significant movements in the U.S. dollar against RMB, in which we pay expenses or earn profits may
have an adverse effect on our financial results. Potential movements in the U.S. dollar against RMB in which we earn revenues could also
adversely affect our financial results.
We may not be able to obtain additional
financing, if needed, on terms that are acceptable, which could prevent us from developing or enhancing our business, taking advantage
of future opportunities or responding to competitive pressure or unanticipated requirements.
Our business is dependent
upon the availability of adequate funding and sufficient capital. If for any reason we need to raise additional funds, we may not be able
to obtain additional financing when needed. If we cannot raise additional funds on acceptable terms, we may not be able to develop or
enhance our business, take advantage of future opportunities or respond to competitive pressure or unanticipated requirements.
We may not be able to protect our intellectual
property rights or may be prevented from using intellectual property necessary for our business.
Our success is dependent,
in part, upon our intellectual property. We generally rely primarily on trade secret, contract, copyright and trademark laws to establish
and protect our rights to our proprietary technology, methods and products. It is possible that third parties may copy or otherwise obtain
and use our proprietary technology without authorization or otherwise infringe on our rights. We cannot assure you that any of the rights
granted under any patent, copyright or trademark that we may obtain will protect our competitive advantages. In addition, the laws of
some foreign countries may not protect our proprietary rights to the same extent as the laws in the U.S. We may also face claims of infringement
that could interfere with our ability to use technology that is material to our business operations. This may limit the comprehensiveness
and quality of the data we are able to distribute or sell. In the future, we may have to rely on litigation to enforce our intellectual
property rights, protect our trade secrets, determine the validity and scope of the proprietary rights of others or defend against claims
of infringement or invalidity. Any such claims or litigation, whether successful or unsuccessful, could result in substantial costs and
the diversion of resources and the attention of management, any of which could negatively affect our business. Responding to these claims
could also require us to enter into royalty or licensing agreements with the third parties claiming infringement. Such royalty or licensing
agreements, if available, may not be available on terms acceptable to us.
5
We may experience technology failures while
developing and enhancing our software.
In order to maintain our competitive
advantage, our software is under continuous development. There is risk that software failures may occur and result in service interruptions
and have other unintended consequences, which could have a material adverse effect on our business, financial condition and results of
operations
.
Our operations depend on the performance
of the Internet infrastructure and fixed telecommunications networks in China.
Almost all access to the Internet
in China is maintained through state-owned telecommunication operators under the administrative control and regulatory supervision of
the Ministry of Industry and Information Technology, or the MIIT. We primarily rely on a limited number of telecommunication service providers
to provide us with data communications capacity through local telecommunications lines and Internet data centers to host our servers.
We have limited access to alternative networks or services in the event of disruptions, failures or other problems with China's
Internet infrastructure or the fixed telecommunications networks provided by telecommunication service providers. With the expansion of
our business, we may be required to upgrade our technology and infrastructure to keep up with the increasing traffic on our platform.
We cannot assure you that the Internet infrastructure and the fixed telecommunications networks in China will be able to support the demands
associated with the continued growth in Internet usage. In addition, we have no control over the costs of the services provided by telecommunication
service providers. If the prices we pay for telecommunications and Internet services rise significantly, our results of operations may
be adversely affected. Furthermore, if Internet access fees or other charges to Internet users increase, our user traffic may decline,
and our business may be harmed.
Any significant disruption in service on
our platform or in our computer systems, including events beyond our control, could prevent us from processing or posting transactions
on our platform, reduce the attractiveness of our platform and result in a loss of borrowers or investors.
In the event of a platform
outage and physical data loss, our ability to perform our servicing obligations, process applications or make trades available on our
platform would be materially and adversely affected. The satisfactory performance, reliability and availability of our platform and our
underlying network infrastructure are critical to our operations, customer service, reputation and our ability to retain existing and
attract new borrowers and investors. Our operations depend on our ability to protect our systems against damage or interruption from natural
disasters, power or telecommunications failures, air quality issues, environmental conditions, computer viruses or attempts to harm our
systems, criminal acts and similar events. If there is a lapse in service or damage to our facilities, we could experience interruptions
in our service as well as delays and additional expense in arranging new facilities. Any interruptions or delays in our service, whether
as a result of third-party error, our error, natural disasters or security breaches, whether accidental or willful, could harm our relationships
with our borrowers and investors and our reputation. Additionally, in the event of damage or interruption, our insurance policies currently
in place may not adequately compensate us for any losses that we may incur.
Our platform and internal systems rely on
software that is highly technical, and if it contains undetected errors, our business could be adversely affected.
Our platform and internal
systems rely on software that is highly technical and complex. In addition, our platform and internal systems depend on the ability of
such software to store, retrieve, process and manage immense amounts of data. The software on which we rely has contained, and may now
or in the future contain, undetected errors or bugs. Some errors may only be discovered after the code has been released for external
or internal use. Errors or other design defects within the software on which we rely may result in a negative experience for our users,
delay introductions of new features or enhancements, result in errors or compromise our ability to protect user data or our intellectual
property. Any errors, bugs or defects discovered in the software on which we rely could result in harm to our reputation, loss of user
or liability for damages, any of which could adversely affect our business, results of operations and financial conditions.
The financial markets in which we operate
are generally affected by seasonality which could have a material adverse effect on our financial performance in a given period.
Traditionally, the financial
markets around the world experience lower volume during the summer and at the end of the year due to a general slowdown in the business
environment and, therefore, our transaction volume levels may decrease during those periods. The timing of the holidays also affects transaction
volume. These factors could have a material adverse effect on our financial performance in a given period.
6
We operate in a rapidly evolving business
environment. If we are unable to adapt our business effectively to keep pace with these changes, our ability to succeed will be adversely
affected, which could have a material adverse effect on our business, financial condition and results of operations.
The pace of change in our
industry is extremely rapid. Operating in such a rapidly changing business environment involves a high degree of risk. Our ability to
succeed will depend on our ability to adapt effectively to these changing market conditions. If we are unable to keep up with rapid technological
changes, we may not be able to compete effectively. To remain competitive, we must continue to enhance and improve the responsiveness,
functionality, accessibility and features of our proprietary software, network distribution systems and technologies. Our business environment
is characterized by rapid technological changes, changes in use and customer requirements and preferences, frequent product and service
introductions embodying new technologies and the emergence of new industry standards and practices that could render our existing proprietary
technology and systems obsolete. Our success will depend, in part, on our ability to:
●
develop, license and defend intellectual property useful in our business,
●
enhance our existing services,
●
develop new services and technologies that address the increasingly sophisticated and varied needs of our prospective customers,
●
respond to technological advances and emerging industry standards and practices on a cost-effective and timely basis,
●
respond to the demand for new services, products and technologies on a cost-effective and timely basis, and
●
adapt to technological advancements and changing standards to address the increasingly sophisticated requirements and varied needs of our prospective customers.
We cannot assure you that
we will be able to respond in a timely manner to changing market conditions or customer requirements. The development of proprietary electronic
trading technology entails significant technical, financial and business risks. Further, the adoption of new Internet, networking or telecommunications
technologies may require us to devote substantial resources to modify, adapt and defend our technology. We cannot assure you that we will
successfully implement new technologies or adapt our proprietary technology and transaction-processing systems to customer requirements
or emerging industry standards, or that we will be able to successfully defend any challenges to any technology we develop. Any failure
on our part to anticipate or respond adequately to technological advancements, customer requirements or changing industry standards, or
any significant delays in the development, introduction or availability of new services, products or enhancements, could have a material
adverse effect on our business, financial condition and results of operations.
Lack of liquidity or access to capital could
impair our business and financial condition.
Liquidity, or ready access
to funds, is essential to our business. We expend significant resources investing in our business, particularly with respect to our technology
and service platforms. As a result, reduced levels of liquidity could have a significant negative effect on us. Some potential conditions
that could negatively affect our liquidity include:
●
illiquid or volatile markets,
●
diminished access to debt or capital markets,
●
unforeseen cash or capital requirements, or
●
regulatory penalties or fines, or adverse legal settlements or judgments.
7
The capital and credit markets
continue to experience varying degrees of volatility and disruption. In some cases, the markets have exerted downward pressure on availability
of liquidity and credit capacity for businesses similar to ours. Without sufficient liquidity, we could be required to limit or curtail
our operations or growth plans, and our business would suffer. Notwithstanding the self-funding nature of our operations, we may sometimes
be required to fund timing differences arising from the delayed receipt of client funds associated with the settlement of client transactions
in securities markets. These timing differences are funded either with internally generated cash flow or, if needed, with funds drawn
under our revolving credit facility. We may also need access to capital in connection with the growth of our business, through acquisitions
or otherwise. In the event current resources are insufficient to satisfy our needs, we may need to rely on financing sources such as bank
debt. The availability of additional financing will depend on a variety of factors such as:
●
market conditions,
●
the general availability of credit,
●
the volume of trading activities,
●
the overall availability of credit to the financial services industry,
●
our credit ratings and credit capacity, and
●
the possibility that our lenders could develop a negative perception of our long- or short-term financial prospects is a result of industry- or company-specific considerations. Similarly, our access to funds may be impaired if regulatory authorities or rating organizations take negative actions against us.
Disruptions, uncertainty or
volatility in the capital and credit markets may also limit our access to capital required to operate our business. Such market conditions
may limit our ability to satisfy statutory capital requirements, generate commission, fee and other market-related revenue to meet liquidity
needs and access the capital necessary to grow our business. As such, we may be forced to delay raising capital, issue different types
of capital than we would otherwise, less effectively deploy such capital, or bear an unattractive cost of capital, which could decrease
our profitability and significantly reduce our financial flexibility.
Our business could be materially adversely
affected as a result of the risks associated with acquisitions and investments.
We may pursue further acquisitions
and investments in the future. These transactions are accompanied by risks. For instance, an acquisition could have a negative effect
on our financial and strategic position and reputation or the acquired business could fail to further our strategic goals. Moreover, we
may not be able to successfully integrate acquired businesses into ours, and therefore we may not be able to realize the intended benefits
from an acquisition. We may have a lack of experience in new markets, products or technologies brought on by the acquisition and we may
have an initial dependence on unfamiliar supply or distribution partners. An acquisition may create an impairment of relationships with
customers or suppliers of the acquired business or our advisors or suppliers. All of these and other potential risks may serve as a diversion
of our management's attention from other business concerns, and any of these factors could have a material adverse effect on our
business.
We operate in an intensely competitive industry,
which could cause us to lose advisors and their assets.
Many of our competitors have
substantially greater resources than we do and may offer a broader range of products and services across more markets. Some operate in
a different regulatory environment than we do, which may give them certain competitive advantages in the services they offer. For example,
certain of our competitors only provide clearing services and consequently would not have any supervision or oversight liability relating
to actions of their financial advisors. We believe that competition within our industry will intensify as a result of consolidation and
acquisition activity and because new competitors face few barriers to entry, which could adversely affect our ability to recruit new advisors
and retain existing advisors. If current or potential clients decide to use our competitors, we could face a significant decline in market
share, future fee revenues and future net income.
8
We may be subject to intellectual property
infringement claims, which may be expensive to defend and may disrupt our business and operations.
We cannot be certain that
our operations or any aspects of our business do not or will not infringe upon or otherwise violate trademarks, patents, copyrights, know-how
or other intellectual property rights held by third parties. We may be from time to time in the future subject to legal proceedings and
claims relating to the intellectual property rights of others. In addition, there may be third-party trademarks, patents, copyrights,
know-how or other intellectual property rights that are infringed by our products, services or other aspects of our business without our
awareness. Holders of such intellectual property rights may seek to enforce such intellectual property rights against us in China, the
United States or other jurisdictions. If any third-party infringement claims are brought against us, we may be forced to divert management's
time and other resources from our business and operations to defend against these claims, regardless of their merits. Additionally, the
application and interpretation of China's intellectual property right laws and the procedures and standards for granting trademarks,
patents, copyrights, know-how or other intellectual property rights in China are still evolving and are uncertain, and we cannot assure
you that PRC courts or regulatory authorities would agree with our analysis. If we were found to have violated the intellectual property
rights of others, we may be subject to liability for our infringement activities or may be prohibited from using such intellectual property,
and we may incur licensing fees or be forced to develop alternatives of our own. As a result, our business and results of operations may
be materially and adversely affected.
Increases in labor costs in the PRC may
adversely affect our business and results of operations.
The economy in China has experienced
increases in inflation and labor costs in recent years. As a result, average wages in the PRC are expected to continue to increase. In
addition, we are required by PRC laws and regulations to pay various statutory employee benefits, including pension, housing fund, medical
insurance, work-related injury insurance, unemployment insurance and maternity insurance to designated government agencies for the benefit
of our employees. The relevant government agencies may examine whether an employer has made adequate payments to the statutory employee
benefits, and those employers who fail to make adequate payments may be subject to late payment fees, fines and/or other penalties. We
expect that our labor costs, including wages and employee benefits, will continue to increase. Unless we are able to control our labor
costs or pass on these increased labor costs to our users by increasing the fees of our services, our financial condition and results
of operations may be adversely affected.
The laws and regulations governing the financial
industry in China are developing and evolving rapidly. If any of our business practices is deemed to violate any PRC laws or regulations,
our business, financial condition and results of operations would be materially and adversely affected.
Due to the relatively short
history of the finance industry in China, the PRC government has yet to establish a comprehensive regulatory framework governing our industry.
To comply with existing laws, regulations, rules and governmental policies relating to the online finance industry, we have implemented
various policies and procedures to conduct our business and operations. However, due to the lack of detailed rules and the fact that the
relevant laws, regulations and rules are expected to continue to evolve, we cannot be certain that our existing practices would not be
deemed to violate any existing or future rules, laws and regulations. As of the date of this report, we have never been subject to any
material fines or other penalties under any PRC laws or regulations, including those governing our industry in China. However, to the
extent that we are not able to fully comply with any existing or new regulations when they are promulgated, our business, financial condition
and results of operations may be materially and adversely affected. We are unable to predict with certainty the impact, if any, that future
legislation, judicial precedents or regulations relating to the online consumer finance industry will have on our business, financial
condition and results of operations. Furthermore, the growth in the popularity of online consumer finance increases the likelihood that
the PRC government will seek to further regulate this industry.
9
Our operations may be adversely affected
by international communication failures, which may affect trade executions and data updates.
Any significant disruption
in service on our platforms, our computer systems or third-party service providers' systems, including events beyond our control,
could reduce the attractiveness of our platforms and result in a loss of customers or investors. In the event of a platform outage and
physical data loss, our ability to perform our servicing obligations, and process loan applications would be materially and adversely
affected. The satisfactory performance, reliability and availability of our platforms and our underlying network infrastructure are critical
to our operations, customer service, reputation, and ability to retain existing and attract new customers, investors and institutional
funding partners. Our operations depend on our ability to protect our systems against damage or interruption from natural disasters, power
or telecommunications failures, air quality issues, environmental conditions, computer viruses, or attempts to harm our systems, criminal
acts and similar events. Any interruptions or delays in our service, whether as a result of third-party or our error, natural disasters
or security breaches, whether accidental or willful, could harm our relationships with our customers, investors and institutional funding
partners and our reputation. Our disaster recovery plan has not been tested under actual disaster conditions, and we may not have sufficient
capacity to recover all data and services in the event of an outage. These factors could prevent us from processing loans, damage our
brand and reputation, divert our employees' attention, subject us to liability and cause customers, investors and institutional
funding partners to abandon our platforms, any of which could adversely affect our business, financial condition and results of operations.
Our platforms and internal systems rely
on software that is highly technical, and if it contains undetected errors, our business could be adversely affected.
Our platforms and internal
systems rely on software that is highly technical and complex. In addition, our platform and internal systems depend on the ability of
such software to store, retrieve, process and manage immense amounts of data. The software on which we rely has contained, and may now
or in the future contain, undetected errors or bugs. Errors or other design defects within the software on which we rely may result in
a negative experience for customers and funding sources, delay introductions of new features or enhancements, result in errors or compromise
our ability to protect customer or investor data or our intellectual property. Any errors, bugs or defects discovered in the software
on which we rely could result in harm to our reputation, loss of customers or investors or liability for damages, any of which could adversely
affect our business, results of operations and financial condition.
Uncertainties relating to the growth and
profitability of the e-commerce industry in China could adversely affect our operating revenue and business prospects.
Our future results of operations
will depend on numerous factors affecting the development of the e-commerce industry in China, which may be beyond our control. These
factors include:
●
the growth of Internet, broadband, personal computer and mobile penetration and usage in China, and the rate of any such growth,
●
the level of trust and confidence of Chinese consumers in online trading, as well as changes in investor demographics and investor tastes and preferences,
●
whether alternative lending channels or business models that better address the needs of investor emerge in China, and
●
the development of fulfillment, payment and other ancillary services associated with online purchases.
Unfavorable developments in
domestic and international politics, including military conflicts, political turmoil and social instability, may also adversely affect
investor confidence and reduce investments, which could in turn materially and adversely affect our growth and profitability.
Any negative publicity or investor complaints
with respect to us, investor and our service providers may materially and adversely affect our business and results of operations.
The reputation of our brands
is critical to our business and competitiveness. Any malicious or negative publicity or any publicized incidents in connection with the
use of our services, whether or not we are negligent or at fault, including but not limited to those relating to our management, business,
compliance with the law, financial conditions or prospects, whether with or without merit, could severely compromise our reputation and
harm our business and operating results.
10
As China's online investing
industry is new and the regulatory framework for this industry is also evolving, negative publicity about this industry and the market
segment in which we operate may arise from time to time. Negative publicity about China's online investing industry in general may
also have a negative impact on our reputation, regardless of whether or not we have engaged in any inappropriate activities. The PRC government
has recently instituted specific rules, including the Guidelines, Interim Measures and the CBRC Circular 26, to develop a more transparent
regulatory environment for the online consumer finance industry. Any players in China's online consumer finance industry who are
not in compliance with these regulations may adversely impact the reputation of the industry as a whole. Furthermore, any negative development
or perception of the consumer finance industry as a whole, including campus lending, even if factually incorrect or based on isolated
incidents or as result of conduct by other market players, could compromise our image, undermine our trust and credibility, and negatively
impact our ability to attract new customers, investors and institutional funding partners. Negative developments in the consumer finance
industry, such as widespread customer defaults, fraudulent behavior, the closure of other online consumer finance platforms, or incidents
indirectly resulting from the accumulation of large amounts of debt and inability to repay by any particular customer, may also lead to
tightened regulatory scrutiny of the sector and limit the scope of permissible business activities that may be conducted by market players
in the consumer finance industry. For instance, since 2015, there has been a number of reports of business failures of, or accusations
of fraud and unfair dealing against, certain companies in the consumer finance industry in China. If customers, investors or institutional
funding partners associate our company with these companies, they may be less willing to engage in borrowing or funding activities on
our platform. If any of the foregoing takes place, our business and results of operations could be materially and adversely affected.
Our business is dependent on our ability
to maintain relationships with our business partners and other third parties, and at the same time, we are subject to risks associated
with our business partners and other third parties.
We currently rely on a number
of business partners and other third parties in various aspects of our business. In addition, we cooperate with a number of business partners
and other third parties to deliver our services to our customers. Furthermore, if third-party service providers fail to function properly,
we cannot assure you that we would be able to find an alternative in a timely and cost-efficient manner, or at all. Pursuing, establishing
and maintaining relationships with business partners and other third parties, as well as integrating their data and services with our
system, require significant time and resources.
The smooth operation of our
business also depends on the compliance by our business partners and other third parties with applicable laws and regulations. Any negative
publicity about business partners and other third parties, such as negative publicity about their loan collection practices and any failure
by them to adequately protect the information of our customers and investors, to comply with applicable laws and regulations or to otherwise
meet required quality and service standards, could harm our reputation. If any of the foregoing were to occur, our business and results
of operations could be materially and adversely affected. Our reputation is associated with these business partners and other third parties,
and if any of the foregoing were to occur, our reputation may suffer.
Any lack of requisite approvals, licenses
or permits applicable to our business may have a material and adverse impact on our business, financial condition and results of operations.
Our business is subject to
governmental supervision and regulation by the relevant PRC governmental authorities. Together, these government authorities promulgate
and enforce regulations that cover many aspects of the operation of the online retail and the online finance industries. The PRC government
extensively regulates the Internet industry. As a result, in certain circumstances it may be difficult to determine what actions or omissions
may be deemed to be in violation of applicable laws and regulations.
We have made efforts to obtain
all the applicable licenses and permits. 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 new ones. If the PRC government determines that we are
operating without the proper approvals, licenses or permits or promulgates new laws and regulations that require additional approvals
or licenses or imposes additional restrictions on the operation of any part of our business, it has the power, among other things, to
levy fines, confiscate our income, revoke our business licenses, and require us to discontinue the relevant parts of our business or to
impose restrictions on the affected portion of our business. Any of these actions by the PRC government may have a material adverse effect
on our business and results of operations.
11
Risks Relating to Our Corporate Structure
We will likely not pay dividends in the
foreseeable future.
Dividend policy is subject
to the discretion of our Board of Directors and will depend on, among other things, our earnings, financial condition, capital requirements
and other factors. There is no assurance that our Board of Directors 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 BVI law, we may only pay dividends from
profits of our company, or credits standing in our 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 accounting standards and regulations in China.
The transfer to this reserve must be made before distribution of any dividend to shareholders.
Our business may be materially and adversely
affected if any of our Chinese subsidiaries 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 subsidiaries undergoes 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.
Wholly Owned Foreign Entity (WOFE) is required
to allocate a portion of its after-tax profits, to the statutory reserve fund, and as determined by its Board of Directors, to the staff
welfare and bonus funds, which may not be distributed to equity owners.
Pursuant to Company Law of
P.R. China (2013 Revision), Wholly Foreign-Owned Enterprise Law of the P.R. China (2000 Revision) and Implementing Rules for the Law of
the People's Republic of China on Wholly Foreign Owned Enterprises (2014 Revision), our WOFE entity is required to allocate a portion
of its after-tax profits, to the statutory reserve fund, and in its discretion, to the staff welfare and bonus funds. No lower than 10%
of an enterprise's after tax-profits should be allocated to the statutory reserve fund. When the statutory reserve fund account
balance is equal to or greater than 50% of the WOFE's registered capital, no further allocation to the statutory reserve fund account
is required. WOFE determines, in its own discretion, the amount contributed to the staff welfare and bonus funds. These reserves represent
appropriations of retained earnings determined according to Chinese law.
12
Our failure to obtain prior approval of
the China Securities Regulatory Commission for the listing and trading of our common shares on a foreign stock exchange could have a material
adverse effect upon our business, operating results, reputation and trading price of our common shares.
On August 8, 2006, six Chinese
regulatory agencies, including the Ministry of Commerce of the People's Republic of China ("MOFCOM"), jointly issued
the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the "M&A Rule"), which was amended
on June 22, 2009. The M&A Rule contains provisions that require that an offshore special purpose vehicle ("SPV") formed
for listing purposes and controlled directly or indirectly by Chinese companies or individuals shall obtain the approval of the CSRC prior
to the listing and trading of such SPV's securities on an overseas stock exchange. On September 21, 2006, the CSRC published procedures
specifying documents and materials required to be submitted to it by an SPV seeking CSRC approval of overseas listings. However, the application
of the M&A Rule remains unclear with no consensus currently existing among leading Chinese law firms regarding the scope and applicability
of the CSRC approval requirement. The CSRC has not issued any such definitive rule or interpretation, and we have not chosen to voluntarily
request approval under the M&A Rule.
If we fail to maintain continuing compliance
with the PRC state regulatory rules, policies and procedures applicable to our industry, we may risk losing certain preferential tax and
other treatments which may adversely affect the viability of our current corporate structure, corporate governance and business operations.
According to the Guidelines
on Foreign Investment issued by the State Council in 2002 and the Catalog on Foreign Invested Industries (2017 Revision) issued by the
National Development and Reform Commission and MOFCOM, IT services fall into the category of industries in which foreign investment is
encouraged. 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. If and to the extent we fail to maintain compliance
with such applicable rules and regulations, our operations and financial results may be adversely affected.
Risks Related to Doing Business in China
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.
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 change 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.
13
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. Prior court decisions may be cited for reference but have limited precedential value. Since the late 1970s, the PRC
government has been building a comprehensive system of laws and regulations governing economic matters in general. The overall effect
has been to significantly enhance the protections afforded to various forms of foreign investments in China. We conduct our business primarily
through our subsidiaries established in China. These subsidiaries are generally subject to laws and regulations applicable to foreign
investment in China. However, since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve,
the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involves
uncertainties, which may limit legal protections available to us. In addition, some regulatory requirements issued by certain PRC government
authorities may not be consistently applied by other government authorities (including local government authorities), thus making strict
compliance with all regulatory requirements impractical, or in some circumstances impossible. For example, we may have to resort to administrative
and court proceedings to enforce the legal protection that we enjoy either by law or contract. However, since PRC administrative and court
authorities have discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to predict the
outcome of administrative and court proceedings and the level of legal protection we enjoy than in more developed legal systems. These
uncertainties may impede our ability to enforce the contracts we plan to enter into with our business partners, clients and suppliers.
In addition, such uncertainties, including any inability to enforce our contracts, together with any development or interpretation of
PRC law that is adverse to us, could materially and adversely affect our business and operations. Furthermore, intellectual property rights
and confidentiality protections in China may not be as effective as in the United States or other more developed countries. We cannot
predict the effect of future developments in the PRC legal system, including the promulgation of new laws, changes to existing laws or
the interpretation or enforcement thereof, or the preemption of local regulations by national laws. These uncertainties could limit the
legal protections available to us and other foreign investors, including you. In addition, any litigation in China may be protracted and
result in substantial costs and diversion of our resources and management attention.
The Chinese government may intervene in or influence our operations
at any time, which could result in a material change in our operations and significantly and adversely impact the value of our securities.
The Chinese government has significant oversight
and discretion over the conduct of our business and may intervene or influence our operations as the government deems appropriate to further
regulatory, political and societal goals. The Chinese government has recently published new policies that significantly affected certain
industries such as the education and internet industries, and we cannot rule out the possibility that it will in the future release regulations
or policies regarding our industry that could require us to seek permission from Chinese authorities to continue to operate our business
adversely affect our business, financial condition and results of operations. Furthermore, recent statements made by the Chinese government
have indicated an intent to increase the government's oversight and control over offerings of companies with significant operations
in China that are to be conducted in foreign markets, as well as foreign investment in China-based issuers like us. Any such action, once
taken by the Chinese government, could significantly limit or completely hinder our ability to offer or continue to offer securities to
our investors, and could cause the value of our securities to significantly decline or become worthless.
Recent regulatory developments in China may subject us to additional
regulatory review and disclosure requirement, expose us to government interference, or otherwise restrict our ability to offer securities
and raise capitals outside China, all of which could materially and adversely affect our business and the value of our securities.
In light of the recent statements by the Chinese
government indicating its intention to exert more oversight and control over overseas offerings of China-based companies and the proposed
CAC review for certain data processing operators in China, we may adjust our business operations in the future, to comply with PRC laws
regulating our industry and our business operations. However, such efforts may not be completed in a liability-free manner or at all.
We cannot guarantee that we will not be subject to PRC regulatory inspection and/or review relating to cybersecurity, especially when
there remains significant uncertainty as to the scope and manner of the regulatory enforcement. If we become subject to regulatory inspection
and/or review by the CAC or other PRC authorities, or are required by them to take any specific actions, it could cause suspension or
termination of the future offering of our securities, disruptions to our operations, result in negative publicity regarding our company,
and divert our managerial and financial resources. We may also be subject to fines or other penalties, which could materially and adversely
affect our business, financial condition, and results of operations.
14
We may be subject to PRC laws relating to, among
others, data security and restrictions over foreign investments in value-added telecommunications services and other industry sectors
set out in the Special Administrative Measures (Negative List) for the Access of Foreign Investment (2020 Edition). Specifically, we may
be subject to PRC laws relating to the collection, use, sharing, retention, security, and transfer of confidential and private information,
such as personal information and other data. These PRC laws apply not only to third-party transactions, but also to transfers of information
between us and our wholly foreign-owned enterprises in China and Hong Kong, and other parties with which we have commercial relations.
These PRC laws and their interpretations and enforcement continue to develop and are subject to change, and the PRC government may adopt
other rules and restrictions in the future.
The recent regulatory developments in China, in
particular with respect to restrictions on China-based companies raising capital offshore, and the government-led cybersecurity reviews
of certain companies with variable-interest entity ("VIE") structure, may lead to additional regulatory review in China over
our financing and capital raising activities in the United States. Pursuant to the PRC Cybersecurity Law, which was promulgated by the
Standing Committee of the National People's Congress on November 7, 2016 and took effect on June 1, 2017, personal information and
important data collected and generated by a critical information infrastructure operator in the course of its operations in China must
be stored in China, and if a critical information infrastructure operator purchases internet products and services that affect or may
affect national security, it should be subject to cybersecurity review by the Cyberspace Administration of China (the "CAC").
The PRC Cybersecurity Law also establishes more stringent requirements applicable to operators of computer networks, especially to operators
of networks which involve critical information infrastructure. The PRC Cybersecurity Law contains an overarching framework for regulating
Internet security, protection of private and sensitive information, and safeguards for national cyberspace security and provisions for
the continued government regulation of the Internet and content available in China. The PRC Cybersecurity Law emphasizes requirements
for network products, services, operations and information security, as well as monitoring, early detection, emergency response and reporting.
Due to the lack of further interpretations, the exact scope of "critical information infrastructure operator" remains unclear.
On July 10, 2021, the CAC publicly issued the Cybersecurity
Review Measures (the "Draft Measures") for public comments until July 25, 2021. According to the Draft Measures, the scope
of cybersecurity reviews is extended to data processing operators engaging in data processing activities that affect or may affect national
security. The Draft Measures further requires that any operator applying for listing on a foreign exchange must go through cybersecurity
review if it possesses personal information of more than one million users. According to the Draft Measures, a cybersecurity review assesses
potential national security risk that may be brought about by any procurement, data processing, or overseas listing. The review focuses
on several factors, including, among others, (1) the risk of theft, leakage, corruption, illegal use or export of any core or important
data, or a large amount of personal information, and (2) the risk of any critical information infrastructure, core or important data,
or a large amount of personal information being affected, controlled or maliciously exploited by a foreign government after a company
is listed overseas. While the Draft Measures have been released for consultation purposes, there is still uncertainty regarding the final
content of the Draft Measures, its adoption timeline or effective date, its final interpretation and implementation, and other aspects.
Furthermore, the Standing Committee of the National
People's Congress passed the Personal Information Protection Law of the PRC ("PIPL"), which will become effective from
November 1, 2021, and requires general network operators to obtain a personal information protection certification issued by recognized
institutions in accordance with the CAC regulation before such information can be transferred out of China.
On July 30, 2021, in response to the recent regulatory
developments in China and actions adopted by the PRC government, the Chairman of the SEC issued a statement requesting additional disclosures
from offshore issuers with China-based operating companies before their registration statements will be declared effective, including
detailed disclosure related to VIE structures and whether the VIE and the issuer, when applicable, received or were denied permission
from the PRC authorities to list on U.S. exchanges and the risks that such approval could be denied or rescinded.
15
On August 1, 2021, the CSRC stated that it had
taken note of the new disclosure requirements announced by the SEC regarding the listings of Chinese companies and the recent regulatory
development in China, and that the securities regulators in both countries should strengthen communications on regulating China-related
issuers. Our PRC legal counsel, Beijing Jindong Law Firm, has advised us that, in light of our business operations, we should not be required
to undergo the CAC review for any offering that we may make. However, if the enacted version of the Draft Measures mandates clearance
of cybersecurity review and other specific actions to be completed by companies aiming to offer securities outside China, we cannot assure
you that the PRC regulatory authorities will not take a contrary view or will not subsequently require us to undergo the approval procedures
and subject us to penalties for non-compliance, or that if we are required to obtain such clearance, such clearance can be timely obtained,
or at all. If we become subject to cybersecurity inspection and/or review by the CAC or other PRC authorities or are required by them
to take any specific actions, it could cause suspension or termination of the future offering of our securities, including offerings under
this registration statement, disruptions to our operations, result in negative publicity regarding our company, and divert our managerial
and financial resources. We may also be subject to significant fines or other penalties, which could materially and adversely affect our
business, financial condition and results of operations. Furthermore, in the event that our subsidiaries become operators of critical
information infrastructure in the future they (and MMTEC) may be subjected to the above-described regulation.
The PRC government has significant influence over companies with
China-based operations by enforcing existing rules and regulation, adopting new ones, or changing relevant industrial policies in a manner
that may materially increase our compliance cost, change relevant industry landscape or otherwise cause significant changes to our business
operations in China, which could result in material and adverse changes in our operations and cause the value of our securities to significantly
decline or be worthless.
Our operations are located entirely within China.
The PRC government has significant influence over the China-based operations of any company by allocating resources, providing preferential
treatment to particular industries or companies, or imposing industry-wide policies on certain industries. The PRC government may also
amend or enforce existing rules and regulation, or adopt ones, which could materially increase our compliance cost, change the relevant
industry landscape, or cause significant changes to our business operations in China. In addition, the PRC regulatory system is based
in part on government policies and internal guidance, some of which are not published on a timely basis, or at all, and some of which
may even have a retroactive effect. We may not be aware of all non-compliance incidents at all times, and we may face regulatory investigation,
fines and other penalties as a consequence. As a result of the changes in the industrial policies of the PRC government, including the
amendment to and/or enforcement of the related laws and regulations, companies with China-based operations, including us, and the industries
in which we operate, face significant compliance and operational risks and uncertainties. For example, on July 24, 2021, Chinese state
media, including Xinhua News Agency and China Central Television, announced a broad set of reforms targeting private education companies
providing after-school tutoring services and prohibiting foreign investments in institutions providing such after-school tutoring services.
As a result, the market value of certain U.S. listed companies with China-based operations in the affected sectors declined substantially.
As of the date of this prospectus, we are not aware of any similar regulations that may be adopted to significantly curtail our business
operations in China. However, if such other adverse regulations or policies are adopted in China, our operations in China will be materially
and adversely affected, which may significantly disrupt our operations and adversely affect our business.
16
We may be subject to anti-monopoly concerns as a result of our
doing business in China.
Article 3 of Anti-Monopoly Law of the People's
Republic of China (the "Anti-Monopoly Law") prohibits "monopolistic practices," which include: a) the conclusion
of monopoly agreements between operators; b) the abuse of dominant market position by operators; and c) concentration of undertakings
which has or may have the effect of eliminating or restricting market competition. Also, according to Article 19 of the Anti-Monopoly
Law, the operator(s) will be assumed to have a dominant market position if it has following situation: a) an operator has 50% or higher
market share in a relevant market; b) two operators have 66% or higher market share in a relevant market; or c) three operators have 75%
or higher market share in a relevant market. We believe none of our subsidiaries in China has engaged in any monopolistic practices in
China, and that recent statements and regulatory actions by the Chinese government do not impact our ability to conduct business, accept
foreign investments, or list on an U.S. or other foreign stock exchange. However, there can be no assurance that regulators in China will
not promulgate new laws and regulations or adopt new series of regulatory actions which may require our Chinese subsidiaries to meet new
requirements on the issues mentioned above.
We rely on offerings of our securities in the United States capital
markets to fund our working capital needs. The approval of and the filing with the CSRC or other PRC government authorities may be required
in connection with our future offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be
able to obtain such approval or complete such filing. Our failure to obtain or maintain any requisite approvals would have a material
adverse effect on our ability to continue as a going concern, and could result in a loss of your entire investment.
Regulations on Mergers and Acquisitions of Domestic
Enterprises by Foreign Investors, or the M&A Rules, adopted by six PRC regulatory agencies in 2006 and amended in 2009, requires an
overseas special purpose vehicle, that is controlled directly or indirectly by the PRC companies or individuals and that has been formed
for overseas listing purposes through acquisitions of PRC domestic interest held by such PRC companies or individuals, to obtain the approval
of the CSRC prior to the listing and trading of such special purpose vehicle's securities on an overseas stock exchange. The CSRC
currently has not issued any definitive rule or interpretation concerning whether our offshore offerings are subject to the M&A Rules.
The interpretation and application of the regulations remain unclear, and our offshore offerings may ultimately require approval of the
CSRC. If the CSRC approval is required, it is uncertain whether we can or how long it will take us to obtain the approval and, even if
we obtain such CSRC approval, the approval could be rescinded. Any failure to obtain or delay in obtaining the CSRC approval for any of
our offshore offerings, or a rescission of such approval if obtained, would subject us to sanctions imposed by the CSRC or other PRC regulatory
authorities, which could include fines and penalties on our operations in China, restrictions or limitations on our ability to pay dividends
outside of China, and other forms of sanctions that may materially and adversely affect our business, financial condition, and results
of operations.
On July 6, 2021, the relevant PRC government authorities
issued Opinions on Strictly Cracking Down Illegal Securities Activities in Accordance with the Law. These opinions emphasized the need
to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies
and proposed to take effective measures, such as promoting the construction of relevant regulatory systems to deal with the risks and
incidents faced by China-based overseas-listed companies. As a follow-up, on December 24, 2021, the CSRC issued a draft of the Provisions
of the State Council on the Administration of Overseas Securities Offering and Listing by Domestic Companies, and issued a draft of Administration
Measures for the Filing of Overseas Securities Offering and Listing by Domestic Companies for public comments. These draft measures propose
to establish a new filing-based regime to regulate overseas offerings and listings by domestic companies. Specifically, an overseas offering
and listing by a PRC company, whether directly or indirectly, an initial or follow-on offering, must be filed with the CSRC. The examination
and determination of an indirect offering and listing will be conducted on a substance-over-form basis, and an offering and listing shall
be deemed as a PRC company's indirect overseas offering and listing if the issuer meets the following conditions: (i) any of the
operating income, gross profit, total assets, or net assets of the PRC enterprise in the most recent fiscal year was more than 50% of
the relevant line item in the issuer's audited consolidated financial statement for that year; and (ii) senior management personnel
responsible for business operations and management are mostly PRC citizens or are ordinarily resident in the PRC, and the principal place
of business is in the PRC or carried out in the PRC. The issuer or its affiliated PRC entity, as the case may be, shall file with the
CSRC for its initial public offering, follow-on offering and other equivalent offering activities. Particularly, the issuer shall submit
the filing with respect to its initial public offering and listing within three business days after its initial filing of the listing
application, and submit the filing with respect to its follow-on offering within three business days after the completion of the follow-on
offering. Failure to comply with the filing requirements may result in fines to the relevant PRC companies, suspension of their businesses,
revocation of their business licenses and operation permits and fines on the controlling shareholder and other responsible persons. These
draft measures also set forth certain regulatory red lines for overseas offerings and listings by PRC enterprises.
17
On February 17, 2023, the CSRC issued the Trial
Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, which will become effective
on March 31, 2023. On the same date of the issuance of the Trial Measures, the CSRC circulated No. 1 to No. 5 Supporting Guidance Rules,
the Notes on the Trial Measures, the Notice on Administration Arrangements for the Filing of Overseas Listings by Domestic Companies and
the relevant CSRC Answers to Reporter Questions on the official website of the CSRC, or collectively, the Guidance Rules and Notice. The
Trial Measures, together with the Guidance Rules and Notice, reiterate the basic supervision principles as reflected in the Draft Overseas
Listing Regulations by providing substantially the same requirements for filings of overseas offering and listing by domestic companies,
yet made the following updates compared to the Draft Overseas Listing Regulations, including but not limited to: (a) further clarification
of the circumstances prohibiting overseas issuance and listing; (b) further clarification of the standard of indirect overseas listing
under the principle of substance over form, and (c) adding more details of filing procedures and requirements by setting different filing
requirements for different types of overseas offering and listing. Under the Trial Measures and the Guidance Rules and Notice, initial
public offerings or listings in overseas markets by domestic companies, either in direct or indirect form, shall be filed with the CSRC
pursuant to the requirements of the Trial Measures within three working days after the relevant application is submitted overseas. The
companies that have already been listed on overseas stock exchanges prior to March 31, 2023 or the companies that have obtained the approval
from overseas supervision administrations or stock exchanges for its offering and listing prior to March 31, 2023 and will complete their
overseas offering and listing prior to September 30, 2023 are not required to make immediate filings for its listing yet need to make
filings for subsequent offerings in accordance with the Trial Measures. The companies that have already submitted an application for an
initial public offering to overseas supervision administrations but have not yet obtained the approval from overseas supervision administrations
or stock exchanges for the offering and listing prior to March 31, 2023 may arrange for the filing within a reasonable time period and
should complete the filing procedure before such companies' overseas issuance and listing.
As of the date of this prospectus, we have not
received any formal inquiry, notice, warning, sanction, or any regulatory objection from the CSRC with respect to this offering. As the
Trial Measures were newly published and there is uncertainty with respect to the filing requirements and the implementation, if we are
required to submit to the CSRC and complete the filing procedures of our overseas public offering and listing, we cannot be sure that
we will be able to complete such filing in a timely manner. Any failure or perceived failure by us to comply with such filing requirements
under the Trial Measures may result in forced rectification, warnings and fines against us and could materially hinder our ability to
offer or continue to offer our securities.
On February 24, 2023, the CSRC, Ministry of Finance
of the PRC, National Administration of State Secrets Protection and National Archives Administration of China jointly revised the Provisions
on Strengthening Confidentiality and Archives Administration for Overseas Securities Offering and Listing which was issued by the CSRC,
National Administration of State Secrets Protection and National Archives Administration of China in 2009, or the Provisions. The revised
Provisions is issued under the title the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities
Offering and Listing by Domestic Companies, and will come into effect on March 31, 2023 with the Trial Measures. One of the major revisions
to the revised Provisions is expanding its application to cover indirect overseas offering and listing, as is consistent with the Trial
Measures. The revised Provisions require that, including but not limited to (a) a domestic company that plans to, either directly or through
its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies, securities
service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies,
shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same
level; and (b) domestic company that plans to, either directly or through its overseas listed entity, publicly disclose or provide to
relevant individuals and entities including securities companies, securities service providers and overseas regulators, any other documents
and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures
stipulated by applicable national regulations.
As of the date hereof, the revised Provisions have
not come into effect. On or after March 31, 2023, any failure or perceived failure by the Company or PRC Subsidiaries to comply with the
above confidentiality and archives administration requirements under the revised Provisions and other PRC laws and regulations may result
in that the relevant entities would be held legally liable by competent authorities, and referred to the judicial organ to be investigated
for criminal liability if suspected of committing a crime.
18
In addition, we cannot assure you that any new
rules or regulations promulgated in the future will not impose additional requirements on us. If it is determined in the future that approval
and filing from the CSRC or other regulatory authorities or other procedures, including the cybersecurity review under the Measures for
Cybersecurity Review and the Draft Regulation on Network for Data Security (if implemented), are required for our offshore offerings,
it is uncertain whether we can or how long it will take us to obtain such approval or complete such filing procedures and any such approval
or filing could be rescinded or rejected. Any failure to obtain or delay in obtaining such approval or completing such filing procedures
for our offshore offerings, or a rescission of any such approval or filing if obtained by us, would subject us to sanctions by the CSRC
or other PRC regulatory authorities for failure to seek CSRC approval or filing or other government authorization for our offshore offerings.
These regulatory authorities may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of
China, limit our operating privileges in China, delay or restrict the repatriation of the proceeds from our offshore offerings into China
or take other actions that could materially and adversely affect our business, financial condition, results of operations, and prospects,
as well as the trading price of our listed securities. The CSRC or other PRC regulatory authorities also may take actions requiring us,
or making it advisable for us, to halt our offshore offerings before settlement and delivery of the shares offered. Consequently, if investors
engage in market trading or other activities in anticipation of and prior to settlement and delivery, they do so at the risk that settlement
and delivery may not occur. In addition, if the CSRC or other regulatory authorities later promulgate new rules or explanations requiring
that we obtain their approvals or accomplish the required filing or other regulatory procedures for our prior offshore offerings, we may
be unable to obtain a waiver of such approval requirements, if and when procedures are established to obtain such a waiver. Any uncertainties
or negative publicity regarding such approval requirement could materially and adversely affect our business, prospects, financial condition,
reputation, and the trading price of our listed securities. Our failure to obtain or maintain any requisite approvals would have a material
adverse effect on our ability to continue as a going concern, and could result in a loss of your entire investment.
Rules and regulations in China can change quickly with little
advance notice, creating substantial uncertainty. Changes in the PRC legal system may adversely affect our business and operation.
Our major business operations are conducted in
the PRC and therefore regulated by the laws and regulations of the PRC. The PRC legal system is based on the written statutes and involves
a unified, multilevel legislative system. The National People's Congress (the "NPC") and its Standing Committee exercise
the state power to make laws. The NPC enacts and amends basic laws pertaining to criminal offences, civil affairs, state organs and other
matters. The Standing Committee enacts and amends all laws except for basic laws that should be enacted by the NPC. When the NPC is not
in session, its Standing Committee may partially supplement and revise laws enacted by the NPC, provided that the changes do not contravene
the laws' basic principles. Generally, the PRC laws will go through specific legislative procedures before being promulgated. The
legislative authority may propose a bill and then the bill shall be deliberated three times before being voted. However, administrative
regulations are formulated by the State Council which reports them to the NPC. The administration regulations are often promulgated with
little advance notice, which results in a lack of predictability, and substantial uncertainty. Moreover, the uncertainties may fundamentally
impact the development of one or more specific industries and in extreme cases result in the termination of certain businesses. For example,
the Opinions on Further Easing the Burden of Excessive Homework and After-School Tutoring for Students Undergoing Compulsory Education,
known as "double reduction" education policy, was promulgated by General Office of the CPC Central Committee and General Office
of the State Council on July 24, 2021. The "double reduction" education policy comes into effective immediately and has posed
a significant impact on the education and training industries, as well as those China-based companies listed in the United States. The
resulting unpredictable could materially and adversely affects the market value and the operation of the businesses affected.
Furthermore, the PRC administrative authorities
and courts have the power to interpret and implement or enforce statutory rules and contractual terms at their reasonable discretion which
makes the business environment much more complicated and unpredictable. It is difficult to predict the outcome of the administrative and
court proceedings. The uncertainties may affect our assessments of the relevance of legal requirements, and our business decisions. Such
uncertainties may result in substantial operating expenses and costs. Should there were any investigations, arbitrations or litigation
with respect to our alleged non-compliance with statutory rules and contractual terms, the management team could be distracted from our
primary business considerations, and therefore such a circumstance could materially and adversely affect our business and results of operations.
We cannot predict future developments relating to the laws, regulations and rules in the PRC. We may be required to procure additional
permits, authorizations and approvals for our operations, which we may not be able to obtain. Our failure to obtain such permits, authorizations
and approvals may materially and adversely affect our business, financial condition and the results of operations.
19
U.S. regulators' ability to conduct investigations or enforce
rules in China is limited.
The majority 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 BVI or 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 BVI, may be
difficult or impossible.
The Holding Foreign Companies Accountable Act requires
the Public Company Accounting Oversight Board (PCAOB) to be permitted to inspect the issuer's public accounting firm within three
years. This three-year period will be shortened to two years if the Accelerating Holding Foreign Companies Accountable Act is
enacted. There are uncertainties under the PRC Securities Law relating to the procedures and requisite timing for the U.S. securities
regulatory agencies to conduct investigations and collect evidence within the territory of the PRC. If the U.S. securities regulatory
agencies are unable to conduct such investigations, they may suspend or de-register our registration with the SEC and delist our securities
from applicable trading market within the US.
The Holding Foreign Companies Accountable Act was
signed into law on December 18, 2020, and requires Auditors of publicly traded companies to submit to regular inspections every three
years to assess such auditors' compliance with applicable professional standards. On June 22, 2021, the U.S. Senate passed the Accelerating
Holdings Foreign Companies Accountable Act which, if passed by the U.S. House of Representatives and 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, thus reducing
the time before our securities may be prohibited from trading or delisted. As a result, the time period before our securities may be prohibited
from trading or delisted will be reduced. If the U.S. securities regulatory agencies are unable to conduct such investigations, there
exists a risk that they may determine to suspend or de-register our registration with the SEC and may also delist our securities from
applicable trading market within the US. On December 2, 2021, the SEC adopted final amendments implementing congressionally mandated submission
and disclosure requirements of the Holding Foreign Companies Accountable Act. The rules apply to registrants
that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located
in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in
foreign jurisdictions. On December 16, 2021, the PCAOB determined that it was unable to inspect or investigate completely registered public
accounting firms headquartered in mainland China because of a position taken by one or more authorities in mainland China ("the
Mainland China Determination"), and was unable to inspect or investigate completely registered public accounting firms headquartered
in Hong Kong because of a position taken by one or more authorities in Hong Kong ("the Hong Kong Determination," and, together
with the Mainland China Determination, "the 2021 Determinations"). On December 15, 2022, the PCAOB announced that it had vacated
the 2021 Determinations after conducting extensive and thorough inspections and investigations of mainland China and Hong Kong firms in
2022 under a new comprehensive agreement with the PRC. However, the PCAOB also recognized that authorities in the PRC might take positions
at any time that would prevent the PCAOB from continuing to inspect or investigate completely, and if the PCAOB were to encounter any
impediment to conducting an inspection or investigation of auditors in mainland China or Hong Kong as a result of a position taken by
an authority in either jurisdiction, it would act immediately to consider the need to issue new determinations consistent with the HFCAA
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 subsidiaries as being indirectly liable for unpaid taxes, if any, arising from Indirect
Transfers by shareholders who did not obtain their common shares in the public offering of our common shares.
20
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 subsidiaries, limit their ability to distribute profits
to us, or otherwise materially and adversely affect us.
On July 4, 2014, the PRC State
Administration of Foreign Exchange ("SAFE") promulgated the Circular on Relevant Issues Relating to Domestic Resident's
Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, which replaced the former Notice
on Relevant Issues Concerning Foreign Exchange Administration for PRC Residents to Engage in Financing and Inbound Investment via Overseas
Special Purpose Vehicles (generally known as SAFE Circular 75) promulgated by SAFE on October 21, 2005. On February 13, 2015, SAFE further
promulgated the Circular on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment,
or SAFE Circular 13, which took effect on June 1, 2015. This SAFE Circular 13 has amended SAFE Circular 37 by requiring PRC residents
or entities to register with qualified banks rather than SAFE or its local branch in connection with their establishment or control of
an offshore entity established for the purpose of overseas investment or financing.
These circulars require PRC
residents to register with qualified banks in connection with their direct establishment or indirect control of an offshore entity, for
the purpose of overseas investment and financing, with such PRC residents' legally owned assets or equity interests in domestic
enterprises or offshore assets or interests, which is referred to in SAFE Circular 37 as a "special purpose vehicle." These
circulars further require amendment to the registration in the event of any significant changes with respect to the special purpose vehicle,
such as an increase or decrease of capital contributed by PRC residents, share transfer or exchange, merger, division or other material
events. In the event that a PRC resident holding interests in a special purpose vehicle fails to complete the required SAFE registration,
the PRC subsidiary of that special purpose vehicle may be prohibited from making profit distributions to the offshore parent and from
carrying out subsequent cross-border foreign exchange activities, and the special purpose vehicle may be restricted in its ability to
contribute additional capital into its PRC subsidiary. Furthermore, failure to comply with the various SAFE registration requirements
described above could result in liability under PRC law for evasion of foreign exchange controls.
We cannot provide any assurances
that all such registration will be completed in a timely manner. Failure by such shareholder or beneficial owners of our company to comply
with 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.
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 subsidiaries, limit their ability to distribute profits to us, or otherwise
materially and adversely affect us.
On July 4, 2014, the PRC State
Administration of Foreign Exchange ("SAFE") promulgated the Circular on Relevant Issues Relating to Domestic Resident's
Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, which replaced the former Notice
on Relevant Issues Concerning Foreign Exchange Administration for PRC Residents to Engage in Financing and Inbound Investment via Overseas
Special Purpose Vehicles (generally known as SAFE Circular 75) promulgated by SAFE on October 21, 2005. On February 13, 2015, SAFE further
promulgated the Circular on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment,
or SAFE Circular 13, which took effect on June 1, 2015. This SAFE Circular 13 has amended SAFE Circular 37 by requiring PRC residents
or entities to register with qualified banks rather than SAFE or its local branch in connection with their establishment or control of
an offshore entity established for the purpose of overseas investment or financing.
21
These circulars require PRC
residents to register with qualified banks in connection with their direct establishment or indirect control of an offshore entity, for
the purpose of overseas investment and financing, with such PRC residents' legally owned assets or equity interests in domestic
enterprises or offshore assets or interests, which is referred to in SAFE Circular 37 as a "special purpose vehicle." These
circulars further require amendment to the registration in the event of any significant changes with respect to the special purpose vehicle,
such as an increase or decrease of capital contributed by PRC residents, share transfer or exchange, merger, division or other material
events. In the event that a PRC resident holding interests in a special purpose vehicle fails to complete the required SAFE registration,
the PRC subsidiary of that special purpose vehicle may be prohibited from making profit distributions to the offshore parent and from
carrying out subsequent cross-border foreign exchange activities, and the special purpose vehicle may be restricted in its ability to
contribute additional capital into its PRC subsidiary. Furthermore, failure to comply with the various SAFE registration requirements
described above could result in liability under PRC law for evasion of foreign exchange controls.
We cannot provide any assurances
that all such registration will be completed in a timely manner. Failure by such shareholder or beneficial owners of our company to comply
with 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.
PRC regulation of loans and direct investment
by offshore holding companies to PRC entities may delay or prevent us from making 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.
As an offshore holding company
of our PRC subsidiary, we may make loans to our PRC subsidiary, or we may make additional capital contributions to our PRC subsidiary.
Any loans to our PRC subsidiary 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 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 MOFCOM 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 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.
On June 15, 2016, SAFE promulgated
the Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or SAFE Circular
No.16. SAFE Circular No. 16 stipulates that the use of capital by foreign-invested enterprises, or FIEs shall follow "the principle
of authenticity and self-use" within the business scope of such FIEs. The capital of an FIE and capital in Renminbi obtained by
the FIE from foreign exchange settlement shall not be used for the following purposes: (i) directly or indirectly used for payment beyond
the business scope of the enterprises or the payment prohibited by relevant laws and regulations; (ii) directly or indirectly used for
investment in securities or investments other than banks' principal-secured products unless otherwise provided by relevant laws
and regulations; (iii) the granting of loans to non-affiliated enterprises, except where it is expressly permitted in the business license;
and (iv) paying the expenses related to the purchase of real estate that is not for self-use (except for the foreign-invested real estate
enterprises).
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 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.
22
Governmental control of currency conversion
may limit our ability to use our future revenues effectively and the ability of our PRC subsidiary to obtain financing.
The PRC government imposes
control on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China.
Restrictions on currency conversion imposed by the PRC government may limit our ability to use our future 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 cannot assure you that the registration
process will not delay or prevent our conversion of Renminbi for use outside of China.
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 subsidiary. If our company or any of our overseas subsidiaries is considered a PRC tax resident enterprise
for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. First, our company or our overseas
subsidiary will be subject to the uniform 25% enterprise income tax rate as to our global income as well as PRC enterprise income tax
reporting obligations. Second, although under the Enterprise Income Tax Law and its implementing rules dividends paid to us from our PRC
subsidiary would qualify as tax-exempted income, we cannot assure you that such dividends will not be subject to a 10% withholding tax,
as the PRC foreign exchange control authorities, which enforce the withholding tax, have not yet issued guidance with respect to the processing
of outbound remittances to entities that are treated as resident enterprises for PRC enterprise income tax purposes. Finally, dividends
payable by us to our investors and gain on the sale of our common shares may become subject to PRC withholding tax. It is possible that
future guidance issued with respect to the new resident enterprise classification could result in a situation in which a withholding tax
of 10% for our non-PRC enterprise investors or a potential withholding tax of 20% for individual investors is imposed on dividends we
pay to them and with respect to gains derived by such investors from transferring our common shares. 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 common shares under the circumstances mentioned
above, the value of your investment in our common shares may be materially and adversely affected. It is unclear whether, if we are considered
a PRC resident enterprise, holders of our common shares would be able to claim the benefit of income tax treaties or agreements entered
into between China and other countries or areas.
23
We may rely on dividends paid by our subsidiaries
for our cash needs, and any limitation on the ability of our subsidiaries to make payments to us could have a material adverse effect
on our ability to conduct our business.
As a holding company, we conduct
substantially all of our business through our consolidated subsidiaries incorporated in China. We may rely on dividends paid by our PRC
subsidiary for our cash needs, including the funds necessary to pay any dividends and other cash distributions to our shareholders, to
service any debt we may incur and to pay our operating expenses. The payment of dividends by entities established in China is subject
to limitations. Regulations in China currently permit payment of dividends only out of accumulated profits as determined in accordance
with accounting standards and regulations in China. Our PRC subsidiary is required to set aside at least 10% of its after-tax profit based
on PRC accounting standards each year to its general reserves or statutory capital reserve fund until the aggregate amount of such reserves
reaches 50% of its respective registered capital. As a result, our PRC subsidiary is restricted in their ability to transfer a portion
of their net assets to us in the form of dividends. In addition, if our PRC subsidiary incurs debt on its own behalf in the future, the
instruments governing the debt may restrict its ability to pay dividends or make other distributions to us. Any limitations on the ability
of our PRC subsidiary to transfer funds to us could materially and adversely limit our ability to grow, make investments or acquisitions
that could be beneficial to our business, pay dividends and otherwise fund and conduct our business.
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 the Labor Contract
Law and its implementing rules have not been in effect very long and because there is lack of clarity with respect to their implementation
and potential penalties and fines, 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.
Risks Related to Ownership of our Common Shares
We are not in compliance with Nasdaq
Listing Rule 5550(a)(2), the bid price rule. If we are unable to cure the failure within the prescribed time period, our common stock
will be subject to delisting. A delisting would materially reduce the liquidity of our common stock and have an adverse effect on our
market price.
On January 26, 2022, the Nasdaq
Listing Qualifications Department notified us that that minimum closing bid price per share for our common stock was below $1.00 for a
period of 30 consecutive business days and that the Company did not meet the minimum bid price requirement set forth in Nasdaq Listing
Rule 5550(a)(2). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company has a compliance period of 180 calendar days, or until July
25, 2022 (the "Compliance Period"), to regain compliance with Nasdaq's minimum bid price requirement. If at any time
during the Compliance Period, the closing bid price per share of the Company's common stock is at least $1.00 for a minimum of 10
consecutive business days, Nasdaq will provide the Company a written confirmation of compliance and the matter will be closed. In the
event the Company does not regain compliance by July 25, 2022, the Company may be eligible for an additional 180 calendar day period to
regain compliance. To qualify, the Company will be required to meet the continued listing requirement for market value of publicly held
shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the bid price requirement, and will
need to provide written notice of its intention to cure the deficiency during the second compliance period, including by effecting a reverse
stock split, if necessary. If the Company chooses to implement a reverse stock split, it must complete the split no later than ten business
days prior to the expiration of the second compliance period.
24
A
delisting would materially reduce the liquidity of our common stock and have an adverse effect on our market price. A delisting would
also likely make it more difficult for us to obtain financing through the sale of our equity. Any such sale of equity would likely be
more dilutive to our current stockholders than would be the case if our shares were listed.
If
our financial condition deteriorates as a NASDAQ listed company, we may not meet continued listing standards on the NASDAQ Capital Market.
Our
securities are currently listed for trading on the NASDAQ Capital Market. The NASDAQ Capital Market requires companies to fulfill specific
requirements in order for their securities to continue to be listed. If our common shares are delisted from the NASDAQ Capital Market
at some later date, our shareholders could find it difficult to sell our common shares. In addition, if our common shares are delisted
from the NASDAQ Capital Market at some later date, we may apply to have our common shares quoted on the Bulletin Board or in the "pink
sheets" maintained by the National Quotation Bureau, Inc. The Bulletin Board and the "pink sheets" are generally considered
to be less efficient markets than the NASDAQ Capital Market. In addition, if our common shares are delisted at some later date, our common
shares may be subject to the "penny stock" regulations. These rules impose additional sales practice requirements on broker-dealers
that sell low-priced securities to persons other than established customers and institutional accredited investors and require the delivery
of a disclosure schedule explaining the nature and risks of the penny stock market. As a result, the ability or willingness of broker-dealers
to sell or make a market in our common shares might decline. If our common shares are delisted from the NASDAQ Capital Market at some
later date or become subject to the penny stock regulations, it is likely that the price of our common shares would decline and that
our shareholders would find it difficult to sell their common shares. In addition, we have relied on an exemption to the blue-sky registration
requirements afforded to "covered securities." Securities listed on the NASDAQ Capital Market are "covered securities."
We
are a "foreign private issuer," and our disclosure obligations differ from those of U.S. domestic reporting companies. As
a result, we may not provide you the same information as U.S. domestic reporting companies or we may provide information at different
times, which may make it more difficult for you to evaluate our performance and prospects.
We
are a foreign private issuer and, 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. As a foreign private issuer, we will also be exempt from the requirements of Regulation FD (Fair Disclosure) which,
generally, are meant to ensure that select groups of investors are not privy to specific information about an issuer before other investors.
However, we will still be subject to the anti-fraud and anti-manipulation rules of the SEC, such as Rule 10b-5 under the Exchange Act.
Since many of the disclosure obligations imposed on us as a foreign private issuer differ from those imposed on U.S. domestic reporting
companies, you should not expect to receive the same information about us and at the same time as the information provided by U.S. domestic
reporting companies.
Common
shares eligible for future sale may adversely affect the market price of our common shares, as the future sale of a substantial amount
of outstanding common shares in the public marketplace could reduce the price of our common shares.
The
market price of our common shares could decline as a result of sales of substantial amounts of our common shares in the public market,
or the perception that these sales could occur. In addition, these factors could make it more difficult for us to raise funds through
future offerings of our common shares.
Our
officers, directors and principal shareholders own a significant percentage of our common shares and will be able to exert significant
control over matters subject to shareholder approval.
Our
officers, directors and 5% or greater shareholders, in the aggregate, beneficially own approximately 42.0% of our outstanding common
shares. Specifically, our chief executive officer and Chairman, in the aggregate, beneficially own 10.4%, which, in turn, will allow
such shareholders to exert substantial influence over matters such as electing directors and approving mergers or other business combination
transactions. As a result, our officers, directors and 5% or greater shareholders possess substantial ability to impact our management
and affairs and the outcome of matters submitted to shareholders for approval.  This concentration of ownership and voting power
may also discourage, delay or prevent a change in control of our company, which could deprive our shareholders of an opportunity to receive
a premium for their common shares as part of a sale of our company and might reduce the price of our common shares. These actions may
be taken even if they are opposed by our other shareholders. See "Major Shareholders."
25
We
will incur increased costs and become subject to additional regulations and requirements as a result of becoming a newly public company,
and our management will be required to devote substantial time to new compliance matters, which could lower our profits or make it more
difficult to run our business.
As
a newly public company, we will incur significant legal, accounting and other expenses that we have not incurred as a private company,
including costs associated with public company reporting requirements and costs of recruiting and retaining non-executive directors.
We also have incurred and will incur costs associated with the Sarbanes-Oxley Act and related rules implemented by the Securities and
Exchange Commission, or the SEC, and NASDAQ. The expenses incurred by public companies generally for reporting and corporate governance
purposes have been increasing. We expect these rules and regulations to increase our legal and financial compliance costs and to make
some activities more time-consuming and costly, although we are currently unable to estimate these costs with any degree of certainty.
Our management will need to devote a substantial amount of time to ensure that we comply with all of these requirements. These laws and
regulations also could make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability
insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or
similar coverage. These laws and regulations could also make it more difficult for us to attract and retain qualified persons to serve
on our Board of Directors, our board committees or as our executive officers. Furthermore, if we are unable to satisfy our obligations
as a public company, we could be subject to delisting of our common shares, fines, sanctions and other regulatory action and potentially
civil litigation.
The
market price of common shares may be volatile, which could cause the value of your investment to decline.
The
market price of our common shares may be highly volatile and could be subject to wide fluctuations. Securities markets worldwide experience
significant price and volume fluctuations. This market volatility, as well as general economic, market or political conditions, could
reduce the market price of our common shares in spite of our operating performance. In addition, our results of operations could be below
the expectations of public market analysts and investors due to a number of potential factors, including variations in our quarterly
results of operations, additions or departures of key management personnel, failure to meet analysts' earnings estimates, publication
of research reports about our industry, litigation and government investigations, changes or proposed changes in laws or regulations
or differing interpretations or enforcement thereof affecting our business, adverse market reaction to any indebtedness we may incur
or securities we may issue in the future, changes in market valuations of similar companies or speculation in the press or investment
community, announcements by our competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures
or capital commitments, adverse publicity about our industry in or individual scandals, and in response the market price of our
common shares could decrease significantly. You may be unable to resell your common shares of at or above the initial public offering
price. In the past few years, stock markets have experienced extreme price and volume fluctuations. In the past, following periods of
volatility in the overall market and the market price of a company's securities, securities class action litigation has often been
instituted against these companies. This litigation, if instituted against us, could result in substantial costs and a diversion of our
management's attention and resources, or at all.
Future
sales, or the perception of future sales, by us or our existing shareholders in the public market could cause the market price for our
common shares to decline.
The
sale of substantial amounts of common shares in the public market, or the perception that such sales could occur could harm the prevailing
market price of our common shares. These sales, or the possibility that these sales may occur, also might make it more difficult for
us to sell equity securities in the future at a time and at a price that we deem appropriate. If any existing shareholders sell a substantial
amount of common shares, the prevailing market price for our common shares could be adversely affected. Our executive officers, directors
and certain of our existing shareholders will sign lock-up agreements with the underwriters that will, subject to certain customary exceptions,
restrict the sale of our common shares and certain other securities held by them for 180 days following the date of this report. The
underwriters may, in their sole discretion and at any time without notice, release all or any portion of the common shares subject to
any such lock-up agreements. As restrictions on resale end, the market price of our common shares could drop significantly if the holders
of our restricted shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult
for us to raise additional funds through future offerings of our common shares or other securities.
As
the rights of shareholders under BVI law differ from those under U.S. law, you may have fewer protections as a shareholder.
Our
corporate affairs will be governed by our Memorandum and Articles of Association, the BVI Business Companies Act, 2004, as amended (the
"BVI Act"), and the common law of the BVI. The rights of shareholders to take legal action against our directors, actions
by minority shareholders and the fiduciary responsibilities of our directors under BVI law are governed by the BVI Act and the common
law of the BVI. The common law of the BVI is derived in part from comparatively limited judicial precedent in the British Virgin Islands
as well as from the common law of England and the wider Commonwealth, which has persuasive, but not binding, authority on a court in
the BVI. The rights of our shareholders and the fiduciary responsibilities of our directors under BVI law are largely codified in the
BVI Act but are potentially not as clearly established as they would be under statutes or judicial precedents in some jurisdictions in
the United States. In particular, the BVI has a less developed body of securities laws as compared to the United States, and some states
(such as Delaware) have more fully developed and judicially interpreted bodies of corporate law. As a result of all of the above, holders
of our common shares may have more difficulty in protecting their interests through actions against our management, directors or major
shareholders than they would as shareholders of a U.S. company.
26
BVI
companies may not be able to initiate shareholder derivative actions, thereby depriving shareholders of the ability to protect their
interests.
Shareholders
of BVI companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. Shareholders
of a BVI company could, however, bring a derivative action in the BVI courts, and there is a clear statutory right to commence such derivative
claims under Section 184C of the BVI Act. The circumstances in which any such action may be brought, and the procedures and defenses
that may be available in respect to any such action, may result in the rights of shareholders of a BVI company being more limited than
those of shareholders of a company organized in the United States. Accordingly, shareholders may have fewer alternatives available to
them if they believe that corporate wrongdoing has occurred. The BVI courts are also unlikely to recognize or enforce against us judgments
of courts in the United States based on certain liability provisions of U.S. securities law; and to impose liabilities against us, in
original actions brought in the BVI, based on certain liability provisions of U.S. securities laws that are penal in nature. There is
no statutory recognition in the BVI of judgments obtained in the United States, although the courts of the BVI will generally recognize
and enforce the non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits. The BVI Act offers some
limited protection of minority shareholders. The principal protection under statutory law is that shareholders may apply to the BVI court
for an order directing the company or its director(s) to comply with, or restraining the company or a director from engaging in conduct
that contravenes, the BVI Act or the company's Memorandum and Articles of Association. Under the BVI Act, the minority shareholders
have a statutory right to bring a derivative action in the name of and on behalf of the company in circumstances where a company has
a cause of action against its directors. This remedy is available at the discretion of the BVI court. A shareholder may also bring an
action against the company for breach of duty owed to him as a member. A shareholder who considers that the affairs of the company have
been, are being or likely to be, conducted in a manner that is, or any act or acts of the company have been, or are, likely to be oppressive,
unfairly discriminatory, or unfairly prejudicial to him in that capacity, may apply to the BVI court for an order to remedy the situation.
There
are common law rights for the protection of shareholders that may be invoked, largely dependent on English company law. Under the general
rule pursuant to English company law known as the rule in
Foss v. Harbottle
, a court will generally refuse to interfere with the
management of a company at the insistence of a minority of its shareholders who express dissatisfaction with the conduct of the company's
affairs by the majority or the Board of Directors. However, every shareholder is entitled to have the affairs of the company conducted
properly according to BVI law and the constituent documents of the company. As such, if those who control the company have persistently
disregarded the requirements of company law or the provisions of the company's Memorandum and Articles of Association, then the
courts may grant relief. Generally, the areas in which the courts will intervene are the following: (1) an act complained of which is
outside the scope of the authorized business or is illegal or not capable of ratification by the majority; (2) acts that constitute fraud
on the minority where the wrongdoers control the company; (3) acts that infringe or are about to infringe on the personal rights of the
shareholders, such as the right to vote; and (4) where the company has not complied with provisions requiring approval of a special or
extraordinary majority of shareholders. This means that even if shareholders were to sue us successfully, they may not be able to recover
anything to make up for the losses suffered.
The
laws of the BVI may provide less protection for minority shareholders than those under U.S. law, so minority shareholders may have less
recourse than they would under U.S. law if the shareholders are dissatisfied with the conduct of our affairs.
Under
the laws of the BVI, the rights of minority shareholders are protected by provisions of the BVI Act dealing with shareholder remedies
and other remedies available under common law (in tort or contractual remedies). The principal protection under statutory law is that
shareholders may bring an action to enforce the constitutional documents of the company (i.e. the Memorandum and Articles of Association)
as shareholders are entitled to have the affairs of the company conducted in accordance with the BVI Act and the Memorandum and Articles
of Association of the company. A shareholder may also bring an action under statute if he feels that the affairs of the company have
been or will be carried out in a manner that is unfairly prejudicial or discriminating or oppressive to him. The BVI Act also provides
for certain other protections for minority shareholders, including in respect of investigation of the company and inspection of the company
books and records. There are also common law rights for the protection of shareholders that may be invoked, largely dependent on English
common law, since the common law of the BVI for business companies is limited.
27
We
may not be able to pay any dividends on our common shares in the future due to BVI law.
Under
BVI law, we may only pay dividends to our shareholders if the value of our assets exceeds our liabilities and we are able to pay our
debts as they become due. We cannot give any assurance that we will declare dividends of any amounts, at any rate or at all in the future.
Future dividends, if any, will be at the discretion of our Board of Directors, and will depend upon our results of operations, cash flows,
financial condition, payment to us of cash dividends by our subsidiaries, capital needs, future prospects and other factors that our
directors may deem appropriate.
We
are an "emerging growth company" and we cannot be certain if the reduced disclosure requirements applicable to "emerging
growth companies" will make our common shares less attractive to investors.
We
are an "emerging growth company," as defined in the JOBS Act, and we may take advantage of certain exemptions and relief
from various reporting requirements that are applicable to other public companies that are not "emerging growth companies."
In particular, while we are an "emerging growth company" (1) we will not be required to comply with the auditor attestation
requirements of Section 404(b) of the Sarbanes-Oxley Act, (2) we will be exempt from any rules that may be adopted by the PCAOB requiring
mandatory audit firm rotations or a supplement to the auditor's report on financial statements, (3) we will be subject to reduced
disclosure obligations regarding executive compensation in our periodic reports and proxy statements and (4) we will not be required
to hold nonbinding advisory votes on executive compensation or shareholder approval of any golden parachute payments not previously approved.
We currently intend to take advantage of the reduced disclosure requirements regarding executive compensation. If we remain an "emerging
growth company" after fiscal 2018, we may take advantage of other exemptions, including the exemptions from the advisory vote requirements
and executive compensation disclosures under the Dodd-Frank Wall Street Reform and Customer Protection Act, or the Dodd-Frank Act, and
the exemption from the provisions of Section 404(b) of the Sarbanes-Oxley Act. 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, meaning that the company can delay the adoption of certain accounting standards
until those standards would otherwise apply to private companies.
We
may remain an "emerging growth company" until the fiscal year-end following the fifth anniversary of the completion of this
initial public offering, though we may cease to be an "emerging growth company" earlier under certain circumstances, including
(1) if we become a large accelerated filer, (2) if our gross revenue exceeds $1.07 billion in any fiscal year or (3) if we issue more
than $1.0 billion in non-convertible notes in any three-year period. The exact implications of the JOBS Act are still subject to interpretations
and guidance by the SEC and other regulatory agencies, and we cannot assure you that we will be able to take advantage of all of the
benefits of the JOBS Act. In addition, investors may find our common shares less attractive if we rely on the exemptions and relief granted
by the JOBS Act. If some investors find our common shares less attractive as a result, there may be a less active trading market for
our common shares and our stock price may decline and/or become more volatile.
28
ITEM
4. INFORMATION ON THE COMPANY
A.
History
    and Development of the Company
MMTEC,
INC. ("MMTEC") was founded on January 4, 2018 under the laws of the British Virgin Islands (the "BVI"). Our main
operations are conducted through and by the People's Republic of China ("PRC") based operating entity, Gujia (Beijing)
Technology Co., Ltd. ("Gujia"), based in Beijing, China. On April 20, 2018, we incorporated MM Fund Services Limited ("MM
Fund") for the purpose of providing administration services to the private equity funds industry. On May 28, 2018 and August 8,
2018, we incorporated MM Capital Management Limited ("MM Capital") and MM Fund SPC ("MM SPC"), respectively,
for the purpose of providing assets management and investment services to clients. On March 19, 2018, MMTEC acquired a wholly owned subsidiary,
MM Future Technology Limited ("MM Future"). MM Future was incorporated in Hong Kong on October 31, 2017 for the purpose of
being a holding company for the equity interest in Gujia. In addition, our company acquired 24.9% of the outstanding securities of MMBD
Trading Limited ("MMBD Trading") on March 28, 2018 and acquired the remaining 75.1% on April 25, 2019. The acquisition was
closed on October 18, 2019. MMBD Trading acquired a wholly owned subsidiary, MM Global Securities, INC. ("MM Global") on
August 16, 2017. MM Global located in New York, NY. MM Global changed its corporate name from "MM IGlobal, INC" to "MM
Global Securities, Inc." effective as of February 25, 2019. On March 15, 2019, the Company incorporated HC Securities (HK) limited
("HC Securities"), a Hong Kong company, for the purpose of providing assets management and investment services to clients.
HC Securities is a wholly-owned subsidiary of MMTEC. HC Securities changed its corporate name from "MM Global Capital Limited"
to "HC Securities (HK) limited", effective on December 22, 2021. HC Securities applied license to SFC and was approved on
December 21, 2021. HC Securities is licensed on dealing in securities, advising on securities and asset management. On July 9, 2019,
we acquired 49% of a Newly-Formed Entity called Xchain Fintech PTE.LTD., ("Xchain"), a Singapore company, for the purpose
of providing technical support for the construction and development of a new solutions for the existing problems of the traditional financial
industry, the difficulty experienced by investors in investing and allocating investment assets globally, and the protection of funds
and investments by using advanced technologies, such as artificial intelligence, big data analysis and blockchain. On March 23, 2020,
we acquired all outstanding securities of MMBD Investment Advisory Company Limited ("MMBD Advisory"), MMBD Advisory was formed
in January 2018 in the U.S. and is registered as an investment advisor firm under the laws of the State of New York on May 7, 2018. The
firm intends to offer non-discretionary investment advisory services to individuals and advisory services to private fund managers. We
have developed and deployed a series of platforms which comprise a business chain that enables PRC-based hedge funds, mutual funds, registered
investment advisors, proprietary trading groups, and brokerage firms to engage in securities market transactions and settlements globally.
Fundex SPC was incorporated on September 13, 2021, as a wholly-owned subsidiary of MM Capital Management Limited, for the purpose of
providing asset management services to clients.
We
conduct our business through and based on distinct yet integrated business systems designed to provide support for our (i) Securities
Dealers Trading System (securities registration and clearing, account management, risk management, quick trading and execution, and third
party access middleware), (ii) Private Fund Investment Management System (multi-account management, fund valuation, risk management,
quantitative trading access, liquidation and requisition management) and (iii) Mobile Transaction Individual Client System and PC Client
System (Apple IOS, Android, PC, Web). We assist PRC-based financial institutions taking part in the overseas securities trading markets
by providing them comprehensive Internet-based securities solutions. These PRC financial institutions, along with Hong Kong broker-dealer
customers, may "white label" our trading interface (i.e., put their logos on it, make our trading interface available
to their customers without referencing our name, as if it was developed by them in-house), or they can select from among our modular
functionalities, such as order routing, trade reporting or clearing on specific products or exchanges where they may not have up-to-date
technology to offer their customers a comprehensive range of services and products. We also help PRC-based hedge funds, mutual funds,
proprietary trading groups to speed up their integration into the overseas market and offer them additional services, such as fund establishment,
issuance, custody, transaction and settlement. We also provide a series of IR solutions service for China Concepts Stock companies,
help maintain the relationship between listed companies and the company's equity, debt investors or potential investors. We provide
our clients across all industries, sectors, and regions with strategic actionable intelligence and visibility into the capital markets
for the long term. We used internally designed and built system with the US brokerage license and the Cayman fund management qualification
to form a series of MOM funds, with the main goal of discovering small and medium-sized institutional investors and helping them set
up the fund to issue securities fund products.
The
Initial Public Offering
On
January 7, 2019, we completed our initial public offering ("IPO") on the NASDAQ Capital Market under the symbol of "MTC".
We offered 1,800,000 common shares at $4 per share. Net proceeds raised by us from the initial public offering amounted to approximately
$6,478,801 after deducting underwriting discounts and commissions and other offering expenses. Out of the $6.5 million net proceeds,
$500,000 was deposited into an escrow account to satisfy the initial $500,000 in potential indemnification obligations arising during
an escrow period of two years following the IPO closing date of January 7, 2019. On January 7, 2019, we sold additional 270,000 common
shares at $4 per share. Net proceeds raised by us amounted to $993,600 after deducting underwriting discounts. As a result, we raised
a total of $7,472,401 from the issuance of 2,070,000 shares of common stock in the January 2019 IPO.
29
Registered
Direct Offering, Private Placement and Convertible Notes
On
February 22, 2021 we entered into a Securities Purchase Agreement with certain institutional investors in connection with a registered
direct offering of 4,300,000 of the Company's common shares, at a purchase price of $3.70 per share. The Company sold the common
shares for aggregate gross proceeds of $15,910,000. The net proceeds from the transactions were $14,637,200, after deducting certain
fees due to the placement agent and the Company's transaction expenses, and will be used for working capital and general corporate
purposes.
On
December 20, 2021 we entered into a Securities Purchase Agreement with a single investor pursuant to which the investor will make a $2,000,000
investment in the Company in a Regulation S private placement. Under the terms of the Purchase Agreement, the investor will purchase
5,000,000 common shares of the Company at a purchase price of $0.40 per share. The gross proceeds of the transaction were $2,000,000
before deducting fees and other expenses. The Company currently intends to use the net proceeds from the transaction for growth capital
and general working capital purposes.
On August 10, 2022, the Company
entered into a common stock purchase agreement, with VG Master Fund SPC, under which, subject to specified terms and conditions, the Company
may sell to Investor up to $6.0 million of shares of common stock, par value $0.01 per share, from time to time during the term of the
Purchase Agreement. On August 12, 2022, the Company amended and restated the common stock purchase agreement with VG Master Fund SPC which
was initially entered into on August 10, 2022. Under the Purchase Agreement, subject to specified terms and conditions, the Company may,
from time to time during the term of the Purchase Agreement, sell to Investor up to the lesser of (a) $6.0 million of shares of common
stock, par value $0.01 per share, and (b) the maximum amount of securities the Company is permitted to issue under its existing shelf
registration statement, which was declared effective by the SEC on July 21, 2020. In consideration for entering into the Purchase Agreement,
the Company issued 53,334 shares of common stock to Investor as consideration for entering into the Purchase Agreement. As of December
31, 2022, the Company sold the 1,050,000 common shares for aggregate gross proceeds of $1,256,640, and will be used for working capital
and general corporate purposes.
On
August 24, 2022, the Company's shelf registration statement for up to $300,000,000 in securities was declared effective by the
SEC. Under this shelf registration statement, the Company may offer and sell from time to time up to an aggregate of $300,000,000 of
common shares (issued separately or upon exercise of warrants), warrants, debt securities, and units of the Company's securities.
On
October 29, 2022, the Company has entered into a Securities Purchase Agreement (the "Agreement 1") with a purchaser. Pursuant
to the Agreement 1, the Company agreed to sell to this purchaser 400,000 shares of common stock for a consideration of $236,000. On December
3, 2022, the Company issued 400,000 shares to this purchaser.
On
November 23, 2022, the Company has entered into a Securities Purchase Agreement (the "Agreement 2") with a purchaser. Pursuant
to the Agreement 2, the Company agreed to sell to this purchaser 500,000 shares of common stock for a consideration of $257,500. On December
7, 2022, the Company issued 500,000 shares to this purchaser.
On
February 22, 2023, the Company entered into a securities purchase agreement (the "Agreement") pursuant to which the Company
issued an unsecured senior convertible promissory note to a non-U.S. investor (the "Investor"). The Note will mature in 24
months after the effective date of the Note. The Note has an original principal amount of $40,000,000 and Investor paid a purchase price
of $32,000,000, reflecting an original issue discount of 20%. The transaction contemplated under the Agreement was closed on February
22, 2023.
On
February 24, 2023, the Company received a conversion notice from the Investor, and in accordance with the terms of the Note, the Company
issued an aggregate of 80,000,000 ordinary shares, par value $0.01 per share, to the Investor and its designees at a conversion price
of $0.50 per share, which represents the conversion floor price. The Investor waived the interest under the Note in connection with the
full conversion of the Note. The Company fulfilled all its obligations under the Note upon conversion. Immediately following the issuance
of the ordinary shares to the Investor, as of April 13, 2023, the Company has 85,145,041 ordinary shares issued and outstanding.
On
March 31, 2023, the Company commenced a registered direct offering of Senior Convertible Promissory Notes with an institutional investor
pursuant to a securities purchase agreement of the same date. Pursuant to the Agreement the Purchaser may purchase Senior Convertible
Promissory Notes in the aggregate original principal amount of not more than $70 million. The Notes will mature on the second anniversary
of their issuance date. The Notes have an original issue discount of 20%, resulting in an aggregate purchase price for the Offering of
up to $56 million assuming the full purchase of Notes under the Agreement. Pursuant to the Agreement, the period during which the Purchaser
may purchase the Notes began on March 31, 2023 and ends on May 11, 2023, the 30th business day after the Effective Date. There is
no minimum commitment under the Agreement.
The
SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically
with the SEC and can be accessed at www.sec.gov. We maintain a corporate website at www.haisc.com. The information contained in, or accessible
from, our website or any other website does not constitute a part of this Annual Report on Form 20-F.
30
B.
Business
    Overview
We
provide comprehensive, Internet-based technology services and solutions to the Chinese language speaking hedge funds, mutual funds, registered
investment advisors, proprietary trading groups, and brokerage firms engaging in securities market transactions and settlements globally.
We help these financial institutions to accelerate their integration into the overseas market by offering complete suite trading solutions,
including services such as fund establishment, issuance, custody, transaction and settlement. These financial institutions may "white
label" our trading interface (i.e., put their logos on it, make our trading interface available to their customers without referencing
our name), or they can select from among our modular functionalities, such as order routing, trade reporting or clearing on specific
products or exchanges to offer their customers a comprehensive range of services and products.
Our
Company was founded on January 4, 2018. We have developed and deployed a series of platforms, including the ETN Counter Business System,
the PTN Private Fund Investment Management System, the Personal Mobile Transaction Client System, the PC Transaction Client System, the
Individual and Institutional Integrated Account Management System, and the Quantitative Investment Transaction Platform, which comprise
a business chain that enables Chinese language speaking hedge funds, mutual funds, registered investment advisors, proprietary trading
groups, and brokerage firms to engage in securities market transactions and settlements globally.
We
conduct our business through and based on distinct yet integrated business systems designed to provide support for (i) Securities Dealers
Trading System (securities registration and clearing, account management, risk management, quick trading and execution, and third party
access middleware), (ii) Private Fund Investment Management System (multi-account management, fund valuation, risk management, quantitative
trading access, liquidation and requisition management) and (iii) Mobile Transaction Individual Client System and PC Client System (Apple
IOS, Android, PC, Web). We assist PRC-based financial institutions in taking part in the overseas securities trading markets by providing
them with comprehensive Internet-based securities solutions. These PRC financial institutions, along with Hong Kong broker-dealer customers
may "white label" our trading interface (i.e., put their logos on it, make our trading interface available to their customers
without referencing our name, as if it were their in house product), or they can select services from among our modular functionalities,
such as order routing, trade reporting or clearing on specific products or exchanges where they may not have up-to-date technology to
offer their customers a comprehensive range of services and products. We also help Chinese language speaking hedge funds, mutual funds,
proprietary trading groups to speed up their integration with the overseas market and offer them additional services, such as fund establishment,
issuance, custody, transaction and settlement.
In
2019, our company added financial advisory and investment banking business line to the roster of services it offers to its customers.
Under this new business line, the Company anticipates providing financial advising and investment banking services, including, among
others, investments, restructuring, IPO and secondary offering guidance, and venture funding advice, for PRC-based small and medium-sized
enterprises from various industries that seek access to the US capital markets. Specifically, the Company intends to assist its customers
in financings and capital formation at different stages of their growth and development.
In
2020, our company used internally designed and built system with the US brokerage license and the Cayman fund management qualification
to form a series of MOM funds, with the main goal of discovering small and medium-sized institutional investors and helping them set
up the fund to issue securities fund products.
In
2021, our company applied for a license for dealing in securities, advising on securities and asset management in Hong Kong and continued
to increase our sales force in the fund management services business, market data services business and broker-dealer business. In turn,
our company reduce retail business gradually because of the Chinese government's requirements for cross-border data security supervision.
In
2022, the company ramped up investment banking team spending, expended the size of our support teams for our investment banking and fund
management services businesses. The company announced that commencing March 6, 2023, the Company relocated its operations from Beijing
to Hong Kong Special Administrative Region.
Our
System and Solutions
Securities
Dealers Trading Support System
The
Electric Trading Network Counter Management System ("ETN")
supports our institutional customers. The system consists
of the following business modules:
●
Our
    account management system
that provides customers with a highly adaptable multi-account management system that systematically
    manages multiple accounts, executes simultaneous transactions among the accounts and guarantees efficiency and fairness in transactions.
●
Our
    risk control system
conducts comprehensive monitoring in the transaction execution process from initial position, decision-making
    to execution by setting the warning line and open line. It evaluates dynamic control of risks presented by scanning all asset units
    every 30 minutes. The system provides one-click opening and one-click query functions to facilitate operations by the risk control
    personnel, so that risks are controlled in a more timely and efficient manner. It supports multi-dimensional risk control and eliminates
    the transaction of highly risky stocks by setting up a stock pool in which such highly risky stocks are stored.
●
Our
    fast transaction system
features in one-click booking, fast transaction and combined booking to rapidly and efficiently integrate
    the centralized transaction system to ensure efficiency and accuracy of transactions.
31
Private
Fund Investment Management System
The
Private Fund Trading Network Management System ("PTN")
is an in-house developed system that supports institutional customers.
The system consists of the following modules:
●
Our
    account management system
- the PTN investment management system sets up account management functions such as risk control, clearing,
    accounting, reporting, and trading, etc. for fund operating and investment.
●
Our
    fund valuation system
- this system provides a package of valuation services, including valuation validation, investment monitoring,
    and information disclosure, with general and grouped valuation options provided to users upon demands.
●
Our
    fund risk management platform
- this system provides all-round risk control management for users in the entire process from transaction,
    compliance to risk control on three dimensions: transaction risk control, process risk control and risk control setting.
●
Our
    quantitative transaction access
– this system provides the user with efficient and fast quantitative transaction access
    modes including the standardized API and customized H5, SDK, APP, PC, to ensure rapid development and operation.
Mobile
Transaction Individual Client System and PC Client System -
As a result of our internal research and development efforts and upgrades,
we have developed a mobile application for business transaction and social networking for our broker-dealer customers, and an efficient
and fast transaction-only PC client system for their individual investor customers. This system provides the end users with real time
comprehensive market information (bid/ask price, volume, breaking news, etc.) access through dedicated cross-border lines. We utilize
dedicated Sino-US cross-border lines to provide end users with high-speed and stable market data, help them to apply for market licenses,
and provide integrated market information-related solutions to the users, who may choose to pay monthly or yearly. We also provide end
users with testing and debugging services.
Our
Financial Technology Solutions
One-stop
broker technology system solution -
we provide the following solutions to our broker customers:
●
modular
    website building, online account opening system.
●
modular
    PC-based trading clients and mobile APP trading clients for retail customers.
●
market
    data center to help them apply for exchange quotations.
●
ETN
    investment management system, backstage ERP system and commission clearing and settlement system.
●
assistance
    to deployment system and undertaking operation and maintenance services.
One-stop
private fund investment management fund solution
– for small and medium-sized private funds with a management scale of more
than $1 million and less than $100 million, we provide the following one-stop establishment and investment trading solutions to assist
with:
●
establishing
    private equity funds, registration, administration and management of such funds.
●
building
    PTN investment management system, deployment of investment transaction, fund management, risk control, ERP and other modules.
●
opening
    trading accounts, handling valuation, liquidation and investment redemptions.
●
marketing.
32
Corporate
History and Background
●
MMTEC,
    INC.
–We formed MMTEC, INC., our BVI holding company on January 4, 2018.
●
MM
    Future Technology Limited
– Our wholly-owned Hong Kong subsidiary, was incorporated on October 31, 2017.
●
Gujia
    (Beijing) Technology Co., Ltd
– Our operating company in China and a wholly-owned subsidiary of MM Future Technology
    Limited.
●
Meimei
    Zhengtong (Beijing) Technology Co., Ltd.,
– A PRC incorporated entity (dissolved effective as of June 8, 2018).
●
MM
    Fund Services Limited
– Our wholly-owned Cayman Islands subsidiary, which was incorporated on April 20, 2018 and dormant
    as of December 31, 2020.
●
MM
    Capital Management Limited
– Our wholly-owned Cayman Islands subsidiary, was incorporated on May 28, 2018 and dormant as
    of December 31, 2020.
●
HC
    Securities (HK) Limited
– Formerly known as MM Global Capital Limited, a wholly-owned Hong Kong subsidiary, was incorporated
    on March 15, 2019.
●
MM
    Fund SPC
– MM Fund SPC was incorporated on August 8, 2018, as a wholly-owned subsidiary of MM Capital Management Limited.
●
MMBD
    Trading Limited
– Our wholly-owned subsidiary of MMTEC, acquired in October 2019.
●
MM
    Global Securities, INC.
– Our operating company in New York and a wholly-owned subsidiary of MMBD Trading Limited.
●
MMBD
    Investment Advisory Company Limited
– Our wholly-owned subsidiary of MMTEC, acquired in March 2020.
●
Fundex
    SPC
– Fundex SPC was incorporated on September 13, 2021, as a wholly-owned subsidiary of MM Capital Management Limited.
Gujia
(Beijing) Technology Co., Ltd was established on June 9, 2015 under the laws of China with registered capital of RMB 10 million (approximately
$1.51 million). Its original shareholders were Xiangdong Wen, who owned 75% and Peng Dong, which owned 25%. On January 29, 2016, Gujia
increased its registered capital to RMB20.83 million (approximately $3.15 million). As result of the capital contribution, Xiangdong
Wen decreased his equity ownership to 48%, Peng Dong decreased his equity ownership to 12%, added an individual shareholder Zhen Fan,
who owned 40%. On June 6, 2016, Gujia increased its registered capital to RMB 26.04 million (approximately $3.94 million). As result
of the capital contribution, Xiangdong Wen decreased his equity ownership to 38.4%, Peng Dong decreased his equity ownership to 9.6%,
and Zhen Fan decreased his equity ownership to 32%. New shareholders Beijing Yiyi Angel Investment Management Co. Ltd. owned 6.7%, Zhoushan
Xianhe Investment Partnership (Limited Partnership) owned 10% and Shanghai Lanhong Investment Management Center (Limited Partnership)
owned 3.3%. On November 30, 2017, Peng Dong transferred its 9.6% equity ownership to Xiangdong Wen; Beijing Yiyi Angel Investment
Management Co. Ltd. transferred its 6.7% equity ownership to Zhen Fan; Shanghai Lanhong Investment Management Center (Limited Partnership)
transferred its 3.3% equity ownership to Zhen Fan, and Zhoushan Xianhe Investment Partnership (Limited Partnership) kept the same equity
ownership as before. On January 29, 2018, Xiangdong Wen transferred his 48% equity ownership to MM Future Technology Limited, Zhen Fan
transferred his 42% equity ownership to MM Future Technology Limited, Zhoushan Xianhe Investment Partnership (Limited Partnership) transferred
its 10% equity ownership to MM Future Technology Limited. MM Future Technology Limited became the sole shareholder of Gujia (Beijing)
Technology Co. Ltd.
Pursuant
to the Securities Purchase Agreement dated as of April 25, 2019, the Company agreed to purchase the remaining 75.1% of outstanding securities
of MMBD Trading Ltd., a British Virgin Islands company ("MMBD"). Prior to the consummation of this acquisition, (i) the Company
held 24.9% of outstanding securities of MMBD, and (ii) each of Xiangdong Wen (the Chairman of the Board and Chief Executive Officer)
and Zhen Fan (the former Chief Executive Officer) beneficially owned 37.55% of outstanding securities of MMBD, respectively. The Company
has agreed to pay the aggregate purchase price of $185,000 for such securities to be equally divided between the two shareholders of
MMBD. The acquisition closed on October 18, 2019, following the receipt by the Company of requisite corporate and regulatory approvals,
including, without limitation, FINRA CMA application approval, and the Company's Audit Committee's review and approval of
the terms and provisions of this transaction involving related parties. Following and as a result of this acquisition, MMBD has become
a wholly-owned subsidiary of the Company.
Pursuant
to the investment agreement dated as of March 23, 2020, the Company acquired all outstanding securities of MMBD Investment Advisory Company
Limited ("MMBD Advisory") for a consideration of $1,000, which was subsequently given up by the Hinman Au. Prior to this
transaction, all outstanding securities of MMBD Advisory were owned by Hinman Au, a director of the Company. MMBD Advisory was formed
in January 2018 in the U.S. and is registered as an investment advisor firm under the laws of the State of New York on May 7, 2018. The
firm intends to offer non-discretionary investment advisory services to individuals and advisory services to private fund managers.
33
Industry
and Market Background
Over
the past several years, China has seen a steady increase in the rate of individual net worth and investment appetite for domestic and
overseas equity investments, including an increase in investment demand of private equity funds.
There
are two main channels which can currently be utilized by Chinese investors to invest in the U.S. securities markets:
Ways
to invest from within the PRC
:
●
Qualified
    Domestic Institutional Investor
("QDII"): this status allows domestic investors to invest in publicly trading securities
    on foreign securities markets (excluding venture capital and private equity funds securities) via certain fund management institutions,
    insurance companies, securities companies and other assets management institutions which have been approved by China Securities Regulatory
    Commission ("CSRC"). These entities, in turn, offer investment opportunities to individual investors to invest in overseas
    stocks and fixed return securities.
●
Qualified
    Domestic Limited Partner
: this status allows qualified domestic limited partners to invest in overseas private funds and private
    equities. Only a few companies have obtained this status to date.
●
Qualified
    Domestic Investment Enterprise
: this platform allows mainland PRC investors to tap into a wider variety of foreign asset classes
    compared to the QDII by accessing offshore private equity, hedge funds and real assets, in addition to listed equities and debt securities
    that are already covered by the existing QDII. This platform is generally viewed as broad in scope, administration and lacking regulatory
    clarity.
●
Outbound
    Direct Investment
– Chinese companies headquartered in the Shanghai Free Trade Zone may conduct almost all equity investments
    via this platform as it is not subject to any investment quotas. However, this platform is ill-suited for small scale operations
    as it only contemplates investments by institutional/corporate investors, not individuals.
●
Qualified
    Domestic Individual Investor
is a new investment channel promoted by the Chinese government. It is expected to give PRC based
    individual investors who have at least RMB1 million of net assets more freedom to invest their money in overseas assets. It is expected
    that the PRC investors will be able to put money directly into overseas shares, bonds, mutual funds, insurance products, financial
    derivatives and property through this initiative. It is also expected to allow them to make direct investments in companies through
    mergers and acquisitions. No official date has been given for the launch of the scheme as of yet.
34
Ways
to invest from outside of the PRC
:
Many
Chinese already have their assets in bank accounts outside China such as in Hong Kong, Singapore, Taiwan, U.S., or other countries. These
investors may invest these funds in any available investment. We believe that these investors will benefit from a trading platform and
service based in Mandarin Chinese.
Growth
of Chinese private fund markets
There
are several notable aspects of development of Chinese private fund industry in recent years:
●
Rapid
    rate of growth.
According to Asset Management Association of China, by the end of December 2021, the number of
    registered private fund managers has reached 24,610, with a total dollar amount of RMB 19.76 trillion. The number of registered private
    funds has reached 124,117.
●
Substantial
    number of QDII funds under management and amount of QDII quota.
As of the end of 2021, the number of funds has reached 174, with
    a total cumulative amount of $157.519 billion. Among them, fund companies in the securities category rank first among various institutions
    with a quota of US$84.58 billion, accounting for 54%.
Competition
The
development of financial information technology and the emergence of Internet securities brokers, such as Tigerbroker and Futu Securities,
through an innovative Internet product development model, have changed the experience of the Internet trading platforms, by optimizing
the account opening process, improving the market response rate, and impacting the traditional retail brokers. Traditional brokers mainly
rely on conventional financial system providers for solutions. Financial technology companies provide various financial transaction solutions
for their customers, including financial transactions such as online trading, front desk transactions and backstage clearing systems,
which charge different costs according to different technical solutions.
There
are several types of entities that provide investment system support in the U.S. securities markets for domestic (PRC) brokers and private
funds.
●
The
    traditional retail brokerage system development company in USA.
At present, there are no U.S. securities technology suppliers
    specialized in providing services for the Chinese market, most of U.S. securities technology suppliers have focus on domestic market,
    and there is no entire indigenous overseas investment system suit for Chinese market.
●
The
    traditional retail brokerage system development company in Hong Kong.
At present, there are four mainstream technology suppliers
    in Hong Kong, which are Hundsun technology (HongKong) Inc., Ayers Solutions Limited, Ebroker Systems LTD and iAsia Online Systems
    Limited. Among these, Hundsun technology has a shareholding in Ayers Solutions Limited. Hundsun and iAsia are public companies.
●
The
    traditional private funds management system development company.
Most of the large private funds use Bloomberg system, but we
    focus on the private equity funds with assets management amount between $1 million to $200 million, our main competitor in this field
    is Hundsun Technologies.
For
the private funds' administrator service, there are two types of companies that provide the service:
●
Traditional
    Hong Kong securities dealers
, including Galaxy Securities (Hong Kong), Haitong International Securities, CITIC International
    Securities, BOC International, Guosen Securities (Hong Kong), engage in trades of Hong Kong as well as U.S. securities. These dealers
    mainly conduct their business through offline business departments of domestic (PRC) dealers. These dealers generally buy a system
    or use the U.S. broker system, offer a total solution for the private funds.
●
The
    traditional private funds fund administrator service
, including Apex Fund Services, Citco Fund Services, etc.
35
The
Hong Kong market mainly relies on the following four securities system development service companies providing services for traditional
securities firms and financial institutions: Hundsun.com Co., Limited, Ayers Solutions Limited, eBroker Systems Limited, and iAsia Online
Systems Limited:
●
Hundsun.com
    Co., Limited
is a Hong Kong holding subsidiary of Hundsun Technologies Inc., located in Hong Kong, mainly providing integrated
    accounts, securities and futures solutions for the Hong Kong financial industry.
●
Ayers
    Solutions Limited
is a member of the Shanghai DZH Group. Ayers was incorporated in 2001 and specialized in developing securities
    and futures trading systems and settlement system for local and global financial institutions. Our company has developed a comprehensive
    system that supports trading in multi-market, multi-currency, feature-rich sets of tools in an integrated platform with flexible
    application settings. Ayers has built an extensive network of global exchange connectivity, risk management solutions and API and
    FIX technology support. Ayers also specializes in providing trading systems and settlement system solutions for securities companies
    and futures companies in Hong Kong and its surrounding countries and regions.
●
iAsia
    Online Systems Limited
is a financial software developer that supplies flexible and cost-effective applications, ranging from
    online trading, front-end trading and back-office settlement systems for various financial products to retail solutions. This company
    offers a wide range of financial products including securities, futures, commodities, options, unit trust, saving plan, leveraged
    FX and bullion systems. iAsia systems handle transaction settlement, monitor risk exposure, offer front end trading and inquiry to
    its users. All products are being used by market participants or financial houses.
●
eBroker
    Systems Limited
is a financial technology solution provider focusing on the provision of financial software solutions services
    to financial institutions. Its solutions are engineered to perform a variety of functions for both front office and back office.
In
addition to the above-referenced companies, we compete with the following entities for providing services to the private equity/fund
industry:
●
OP
    Investment Management Ltd
. is a leading asset management company based in Hong Kong, and a member of the Oriental Patron Financial
    Group. Our company manages both global and Asian-based fund vehicles with expertise across every major regional market from China,
    Korea, India to the Middle East. OPIM is a fully licensed holder of Hong Kong SFC Type 4 & Type 9 licenses.
●
AssetMark
    Financial Holdings, Inc.
is a U.S. turnkey asset management platform, purchased by a Chinese listed brokerage. It has provided
    professional and serial investment solutions to U.S. investment advisers over the past 20 years. As of March 31, 2016, the total
    assets under management on the AssetMark platform were about $28.5 billion, serving more than 6,700 investment advisers and over
    87,000 investors.
Our
Strategies
Our
key market strategies include:
●
Providing
    free, flexible and open securities technology services -
we provide one-stop integrated solutions to small and medium-sized
    broker customers, by replacing a technical fee model with a free technical system featuring open system underlay access, standardized
    access interface and module products. The purpose is to build a more open technical platform that provides a wide variety of financial
    products and more open technical services for Internet securities.
Specifically,
as we face increased competition, we also innovate when it comes to attracting new users. The general approach is to, by use of free
platform, attract traffic and customers early on in the process, and then establish and maintain an environment connecting various users
for which we can then charge our users. In this effort, we:
●
Aim,
    when we compete with traditional technology developers, to provide free technical base platforms for securities business, which meet
    the traditional securities business in terms of functionality, security, etc., so as to attract more traditional securities companies
    to switch to our technical products,
36
●
Develop
    better, more innovative products and offer functionalities and user experience beyond of what traditional technology developers may
    offer; we accomplish that by providing incentive to switch to our services for free,
●
Provide,
    in addition to our basic set of technical products, value-added technical products, such as intelligent investment customers service,
    intelligent trading service, AI user analysis tools, etc., to help securities companies expand their business lines. We intend to
    charge for these product offerings in the future, but only if our users fully or partially use these free products first,
●
Provide
    fund products, intelligent investment products or other types of financial products through MM Fund Services Limited. We intend to
    become a channel distributor to help small and medium-sized securities firms to provide competitive financial products on free platforms.
    As more securities brokers use our free products, we will put these products directly in the securities business platform for free
    as a part of our standard module. As wholesalers of these products, we anticipate deriving revenue from this approach in the future,
    and
●
Establish
    an internal system where are able to connect different securities firms from one technical platform, so that their structured financial
    products and fixed income products can be circulated on one (our) platform.
Many
small and medium-sized brokers do not have the capacity for research and development and are unwilling to bear high development costs.
A licensed broker wishing to develop its own products and to build a comprehensive research and development team will need teams of engineers,
developers of IOS and Android applications, of PC applications, and websites and online account set-up system. Most small- and medium-sized
brokers are reluctant to invest in incur such costs.
We
(i) make most technical systems free, open part of the core code, in an effort to build a more open technical platform to help admit
more small and medium sized brokers; (ii) modularize products to help small and medium-sized broker customers to carry out development,
lower the technical threshold, and facilitate customization; (iii) help small and medium-sized broker customers to deploy the system
within one to four weeks to commence business immediately and provide system security solutions and post-maintenance; (iv) provide technical
support in Chinese by offering solutions for technical interface with major U.S. exchanges and clearing banks; (v) deliver rapidly iterative
products by providing multiple modules of personalized portfolio solutions and a better Internet experience for small and medium-sized
broker customers; and (vi) use cloud technology to provide services with more varieties of financial products, to help small and medium-sized
brokers to gain competitive advantages in attracting their customers.
Focus
on serving small and medium sized private equity funds by lowering the setting up threshold, we believe that we can help our fund customers
overcome the entry barrier, and make it possible to bring such funds to overseas stock markets. According to our analysis, we believe
that small and medium sized private equity funds with assets under management ("AUM") between $1 million and $100 million,
especially those with AUM between $2 million and $20 million, will become the bulk of our customers.
Large
equity funds tend to set up their accounts through well-known brokers, and choose the services of fund administrators that are highly
ranked across the globe. In contrast, small and medium sized private equity funds, especially those at the early stage with assets under
management below $20 million, are faced with the following challenges: (i) limited capacity for fundraising at the early stage, typically
small AUM of initial fund; (ii) small AUM equity funds makes it hard to cover the initial cost for attorneys and administrators; (iii)
unfamiliar with the process for setting up overseas equity funds, lack of related laws and regulations, difficult to open bank accounts
and brokerage trading accounts; (iv) loss of oversea growth opportunity. Many fund managers' domestic customers have already had
their own personal investments overseas. It will be easier for these fund managers to attract their investors' overseas assets
and invest in their oversea funds; (v) need tools for marketing and promotion, including brand promotion, as well as further information
about overseas market; and vi) failure of overseas investment platform and system support to meet their needs, especially the needs of
financial accounting and risk management.
37
For
such funds, we will provide (i) a package solution will optimize the set-up process and reduces the set-up cost to help them to invest
in overseas markets; (ii) personal service to help them to solve issues related to the regulations and supervision of overseas funds
and account set-up; (iii) completely Chinese language based PTN investment management system, free of charge to provide fund valuation,
redemption management, and risk-control financial management system, free estimate of fund value, and a system for risk control and financial
management that is customized for China's private equity funds; (iv) assistance in brand promotion and marketing, by providing
additional market information, and organizing industry gatherings to promote their development; and (v) providing quantitative interface
and open data to meet needs for access to small scale funds by localizing the U.S. financial industry standards so that more local quantitative
funds can be interfaced with the U.S. stock market according to native technical standards.
●
Minimize
    technical barriers to securities trading
– We aim to assist small- to medium-sized securities dealers, online financial
    management enterprises, Internet traffic platforms and individuals in their efforts to expand their respective businesses and lower
    the threshold for participation of the traditional securities industry.
●
Utilize
    cloud computing technologies, open financial platforms, and more diversified financial product
- We help small and medium-
    sized securities brokerage firms build system on the cloud, we focus on providing backstage support for institutional clients, and
    develop a wide variety of technical and financial products for them.
●
Support
    PRC private equity funds to participate in overseas markets
–We strive to minimize and possibly eliminate the cost
    of setting up the private equity funds, allowing our customers to use and rely on our technologies. We focus on small private funds
    with assets under management ranging from $1 million to $200 million.
●
Focus
    on the Chinese market, and all the markets that use Chinese as the native language-
The U.S. securities market is the largest
    securities market in the world. We want to rely on financial technology to lower transaction threshold for all Chinese speaking investors
    to invest in U.S. securities market, and make it more convenient for them to invest.
Our
Competitive Strengths
We
believe that the following competitive strengths distinguish us from our competitors:
●
Product
    advantages and technology accumulation –
by means of our technological advantages, better Internet experience and one-stop
    securities dealers solutions, we simplify the process of overseas investment transactions and lower the threshold of securities trading,
    making it easier for Chinese investors to get involved in global investment. We also provide (i) a complete product line from ENT,
    PTN to mobile end trading platform and PC-side trading platform, thus covering most of the operating systems required by broker-dealers
    and private equity funds; (ii) a stable market, trading system tested and relied for a period of time; (iii) rapid product development
    and iteration - we can develop products which meet the customer's latest demands; and (iv) understanding of financial markets
    and information technology development.
●
Sound
    marketing strategies
- We follow the same rules for both brokerage firms and private equity customers: we provide free technical
    systems yet charge a fee for post financial or additional premium services to encourage more brokers-dealers and private equity funds
    to use our technical products and services. (i) through free technical system services that change the delivery mode of the securities
    industry developers, we reduce the operating costs of small and medium-sized brokerage firms, (ii) with more choices for small and
    medium-sized brokerage firms, to help their customers respond to changes in the Internet, we provide better tools and platforms that
    enable customers choose and customize their services, and (iii) by helping private equity funds overcome the set-up threshold issue,
    we enable more private equity funds step into the overseas stock market and grow with them.
38
●
Innovative
    and open Internet idea -
By using cloud technology, we help traditional financial institutions cope with the changes in traditional
    online securities trading. Based on cloud technology that helps more brokerage firms minimize the access threshold of technology,
    we stick to the user-centered product development model, and use faster deployment systems to meet customers' demand and reduce
    their technical service costs. We maintain an open technical environment and provide an open platform for all users who want to access
    overseas investment transactions. We are also able to provide customized product service for users. We believe that the new generation
    of Chinese investors has a more sophisticated understanding of financial transactions, which requires a better user experience and
    more innovative products and service.
We
will (i) be more open minded, make accessible most of the bottom core code, make accessible the bottom system interface, and complete
the most challenging task so as to help customers use simple tools for development on our platform; (ii) quickly develop and update products
so as to be in better preparation for changes in the online securities trading industry; (iii) provide more tools for our customers to
help them become business partners and help them grow.
●
A
    professional team with diversified backgrounds
- Our team members are from Internet companies, financial enterprises and
    traditional securities information system development companies. They are familiar with the financial market, and have expertise
    in the development of securities information technology. Members of this diverse backgrounds teamwork in their respective areas with
    efficiency and professionalism.
●
Better
    ecology and environment -
With the acquisition of MMBD Trading and MM Global in the United States, we are able to provide
    better services to non-U.S. small and medium-sized brokerage firms to access the U.S. market, and also to the small and medium-sized
    private equity funds with deeper understanding of their needs.
●
Market
    opportunities
- Traditional financial markets rely more and more on information technology. In dealing with the overseas
    market, under the barrier of language, market mechanism and cultural background, we rely on technology to change the relationship
    between brokerage firms and traditional information technology developers. As the earliest participants in this model, we enjoy favorable
    market opportunities. At the same time, there has been an increasing demand for China's small and medium-sized private equity
    funds to go overseas, as well as more Chinese investors investing outside of China. At the early stage development of this industry,
    we will actively participate in the development of industry service standards and service system, and make good use of this market
    opportunity.
●
Localized
    service -
24/7 customer service in complete Chinese language. From trading API document to technology support, we strive
    to create a more user-friendly environment for our customers. We also provide more pleasant user trading experience for Chinese customers.
    They will get more localized trading experience, without trial and error, and easier and more pleasant investment in overseas markets.
    Back on the Chinese market, we understand the rules of the United States. We also understand better the needs of Chinese investors.
    And we provide more localized private fund services and more financial products and services support. With the system support of
    MM Fund Services Limited and PTN, we will provide a more localized private fund administration service to our clients. We will respond
    to their request in a timely manner, being more attentive to their needs and requests.
Individual
investors and private equity funds coming from China and Hong Kong markets are increasingly relying on financial systems developed by
traditional system developing companies. Our competitive strengths are primarily in the following areas:
●
Reliance
    on our technological advantages, rich Internet experience and one-stop securities dealer solutions:
We make overseas investment
    transactions more convenient by lowering the trading threshold, making it easier for Chinese investors to get involved in global
    investment. We also provide smoother user trading experience for Chinese customers. They will get more localized trading experience,
    without trial and error, becoming easier and smoother investing in overseas markets. Back on the Chinese market, we understand the
    rules of the United States, we also have a better understanding of needs of Chinese investors.
39
●
More
    localized private equity fund services
. Based on the system support from MM Fund Service Limited and PTN, we will provide
    more localized private fund administrator service for our clients.
●
Reducing
    the technical access threshold of the securities industry
. Rely on cloud technology to help more brokerage firms to minimize
    the access threshold of technology. We insist in user-centered product development model, faster deployment systems to meet customers'
    demand and reduce their technical service costs. We adhere to an open technical environment and provide an open platform for all
    users who want to access overseas investment transactions. We also provide customized product service for users. The new generation
    of Chinese investors has an updated understanding of the transactions, which requires a better user experience and more innovative
    products and service.
●
Localized
    user experience
. 24/7 customer support in complete Chinese language service. From trading API document to technology support,
    we make our customers more competitive in trading space by providing service in their native language.
Marketing
We
aim to offer these and other similarly situated financial services providers with a full spectrum of technical system solutions. Specifically,
we intend to open an office in Hong Kong for such future customers and retain local sales force to promote our services in the market
and increase our brand exposure. In addition, we intend to increase our sales and marketing teams in Shanghai and Beijing to offer our
technical solutions to the PRC private fund industry participants. We also intend to hold conference, educational and other events to
promote our brand recognition.
Research
and Development
Our
technology is critical to our operations. The following are some of our technology development milestones:
●
In
    October 2015, our Shanghai Branch was founded; the Shanghai Technical Research and Development Center started operation.
●
In
    December 2015, the ETN Counter Business System was launched for trial operation.
●
In
    August 2016, the PTN Private Fund Investment Management System was launched for operation.
●
In
    December 2016, the 4th version of the ETN Investment Management System was successfully employed. The Sino-US Special Line was completed
    and the Market and Quantitative Transaction Platform started operation.
We
intend to maintain the research and development input in product design at no less than 35% of our company's total input, and an
incentive mechanism for research and development personnel should be formulated to achieve breakthrough in product design stability and
security and personalization.
Employees
Our
principal offices are located in Hong Kong Special Administrative Region; we also have a technical research & development center
in Beijing, office in Shenzhen, Shanghai, Chengdu, China, and we also operate a broker-dealer in New York City. As of April 13, 2023,
we employed 55 people on a full-time basis, comprised of 5 employees in management, 30 employees in sales and marketing, 11 employees
in research and development, and 9 employees in administration.
Intellectual
Property Rights
We
rely on our technology copyright to protect our domestic business interests and ensure our competitive position in our industry. We have
placed a high priority on the management of our intellectual property. Some products that are material to our operating results incorporate
technology copyright. Although technology copyright is important to the continued success of our products, we do not believe that our
business, as a whole, is dependent on, or that its profitability would be materially affected by the revocation, termination, expiration
or infringement upon any particular patent or copyright. We have applied for software copyright protection in China covering our software
technology. We applied to National Copyright Administration of the P.R.C. for 27 software copyrights, which was approved on June 28,
2018, March 14, 2019 and September 1, 2021.
40
Properties
Our
headquarters is located at Room 2302, 23/F, FWD Financial Center, 308 DES Voeux Road Central, Hong Kong. Our research and development
center is located in Beijing. All of the facilities are leased. We believe our facilities are adequate for our current needs and we do
not believe we will encounter any difficulty in extending the terms of the leases by which we occupy our respective premises. A
summary description of our facilities locations follows:
Office
Address
Rental Term
Space
Headquarters
Room 2302, 23/F, FWD Financial Center, 308 DES Voeux Road Central, Hong Kong
October 25, 2021 – October 24, 2024
969 sq. Ft.
New York Center
575 Lexington Avenue New York, NY, 10022, USA
February 1, 2023 – July 31, 2023
Approximately 200 sq. Ft.
Beijing Research & Development Center
AF, 16/F, Block B, Jiacheng Plaza, 18 Xiaguangli, Chaoyang District, Beijing 100027
December 1, 2022 – November 30, 2025
6,920.66. sq. Ft.
Beijing Center
Room 2501, Block A, Yuanyangxinganxian Building, Xiaguangli, Chaoyang District, Beijing 100027
September 9, 2022 – October 7, 2024
4,262.72 sq. Ft.
Shenzhen Center
Room DD-12, TCL Building, 6 Gaoxin South Road 1, Shekou, Nanshan District, Shenzhen, Guangdong
January 1, 2023 – February 29, 2024
2 sq. Ft.
Chengdu Center
14/F, East tower, Lingdi Center, 3 Xiyu Street, Qingyang District, Chengdu, Sichuan
October 1, 2022 – September 30, 2022*
2 sq. Ft.
Shanghai Center
3/A, Jiali Building, 1155 Fandian Street, Pudong District, Shanghai
March 8, 2022 – April 30, 2022*
2 sq. Ft.
*
Expiration can
continue to use, termination notice period 1-2 months.
Legal
Proceedings
In the normal course of business, MM Global is engaged in various trading
and brokerage activities on a principal and agency basis through a clearing broker. As a regulated FINRA broker-dealer MM Global is subject
to regulatory trading inquiries and investigations to determine whether any violations of federal securities or FINRA rules may have occurred.
As such, MM Global has responded to FINRA inquires.  MM Global submits Letter of Acceptance, Waiver, and Consent for the purpose
of proposing a settlement of the alleged rule violations on September 9, 2022. Without admitting or denying the findings by FINRA related
to Case Number 2019062623, the Company was censured, fined $450.000. Two individuals' registration capacities were suspended for
45 days, fined $20,000 and $5,000 respectively. The Company elect to pay the fine via a 36 months' installment plan with $38,250
installment fee. As of December 31, 2022 the Company has total unpaid balance of $334,800, recorded the current portion as "Accrued
liabilities and other payables" and non-current portion as "Accrued Liabilities, Noncurrent" in consolidation financial
statement.
Other
than MM Global, we are currently not involved in any legal proceedings; nor are we aware of any claims that could have a material adverse
effect on our business, financial condition, results of operations or cash flows.
Government
Regulation
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 (1996), as amended on August 5, 2008, the Administration Rules of the Settlement, Sale and Payment of Foreign Exchange
(1996) and the Interim Measures on Administration on Foreign Debts (2003). Under these regulations, Renminbi are freely convertible for
current account items, including the distribution of dividends, interest payments, trade and service-related foreign exchange transactions,
but not for most capital account items, such as direct investment, loans, repatriation of investment and investment in securities outside
China, unless the prior approval of SAFE or its local counterparts is obtained. In addition, any loans to an operating subsidiary in
China that is a foreign invested enterprise, cannot, in the aggregate, exceed the difference between its respective approved total investment
amount and its respective approved registered capital amount. Furthermore, any foreign loan must be registered with SAFE or its local
counterparts for the loan to be effective. Any increase in the amount of the total investment and registered capital must be approved
by the MOFCOM or its local counterpart. We may not be able to obtain these government approvals or registrations on a timely basis, if
at all, which could result in a delay in the process of making these loans.
The
dividends paid by the subsidiary 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 Chinese governmental authorities.
41
Dividend
Distribution.
The principal regulations governing the distribution of dividends by foreign holding companies include the
Company Law of China (1993), as amended in 2013, the Foreign Investment Enterprise Law (1986), as amended in 2000, and the Administrative
Rules under the Foreign Investment Enterprise Law (1990), as amended respectively in 2001 and 2014.
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 Chinese 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, Chinese 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 Chinese 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, Chinese residents who have contributed domestic assets or interests to a SPV, but failed
to complete foreign exchange registration of overseas investments as required prior 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.
Chinese
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 Chinese company owned by Chinese residents in the future, such Chinese residents
will be subject to the registration procedures described in Circular 37.
Cash
Transfers Within Our Organization
During
the first three months of 2023 and each of the fiscal years ended December 31, 2020, 2021 and 2022, the only transfer of assets among
MMTEC and its subsidiaries have consisted of cash. During that same period, there have been no distributions or dividends by any of our
direct or indirectly held subsidiaries to MMTEC. During that same period MMTEC has not declared any dividends or made any distributions
to its shareholders, including its U.S. investors, and we do not anticipate declaring a dividend in the foreseeable future.
MMTEC
routinely provides cash to its subsidiaries either by way of capital contribution or by way of loan. All such loans are interest-free,
unsecured and payable on demand. The proceeds of any such loan will be wired to the borrower subsidiary and will be recorded on our books
as 'Inter-Company due.' Such loan amounts are eliminated in our consolidated financial statements. Cash transferred outside
of our organization to satisfy our obligations to third parties are also effected via wire transfer.
MMTEC
is a holding company incorporated in the British Virgin Islands, and we do not have any substantive operations other than indirectly
holding the equity interest in our operating subsidiaries in China and other countries and regions. MMTEC relies on dividends paid by
our subsidiaries and capital raised from the sale of our securities to satisfy our cash needs. The payment of dividends to MMTEC by our
subsidiaries is effected by means of dividends by those entities to their direct parent and, as applicable, a redividend by that entity
to MMTEC. Such dividends are effected by resolution of the board of directors of each such entity (after provision for applicable tax
obligations).
China
is a foreign exchange administration country. Capital injections, cross-border trade and services transactions settled in foreign exchange,
overseas financing and profit repatriations are subject to the foreign exchange administration regulations. The Authority dealing with
foreign exchange in China is the State Administration of Foreign Exchange (SAFE) and its local branches. A Chinese subsidiary owned by
a foreign company must apply for registration of foreign exchange with the SAFE after the issuance of a business license and obtain a
foreign exchange registration certificate. When the Chinese subsidiaries apply to repatriate dividends to foreign shareholders, they
must submit the application form to SAFE with the proof that such dividends have been subjected to all applicable tax withholding. A
Chinese subsidiary can only distribute dividends out of its accumulated profits, which means that any accumulated losses must be more
than offset by its profits in other years, including the current year.
42
The
cash transfers within the organization during the above-referenced periods were as follows:
For The Period From January 1, 2023 through April 13, 2023
Company (Wire transfer from)
Company (Wire transfer to)
Amount
Equivalent to amount (USD)
Purpose
Asset Type
MMTEC
MMBD Trading
US$
20,000
20,000
Capital contribution
Cash
MM Global
MMBD Trading
US$
220,000
220,000
Withdraw investment
Cash
MM Future
HC Securities
HK$
1,482,779
190,000
Intercompany loan for working capital
Cash
MMBD Trading
MM Future
US$
220,000
220,000
Intercompany loan for working capital
Cash
MMBD Trading
MM Global
US$
20,000
20,000
Capital contribution
Cash
For The Year 2022
Company (Wire transfer from)
Company
(Wire transfer to)
Amount
Equivalent
to amount (USD)
Purpose
Asset Type
MMTEC
MMBD Trading
US$
850,000
850,000
Capital contribution
Cash
MMTEC
MM Future
US$
6,350,000
6,350,000
Capital contribution
Cash
MMTEC
HC Securities
HK$
1,500,000
191,522
Capital contribution
Cash
MM Future
Gujia
RMB
24,642,492
3,700,000
Capital contribution
Cash
MM Future
Fundex
US$
5,000
5,000
Intercompany loan for working capital
Cash
MMBD Trading
MM Global
US$
850,000
850,000
Capital contribution
Cash
Gujia
MM Future
RMB
716,680
100,000
Consulting service fee
Cash
For The Year 2021
Company (Wire transfer from)
Company
(Wire transfer to)
Amount
Equivalent to
amount
(USD)
Purpose
Asset Type
MMTEC
MMBD Trading
US$
330,000
330,000
Capital contribution
Cash
MM Future
MMTEC
US$
5,000
5,000
Intercompany loan for working capital
Cash
MMTEC
MM Future
US$
5,000
5,000
Intercompany loan for working capital
Cash
MMTEC
MM Future
US$
4,495,000
4,495,000
Capital contribution
Cash
MMTEC
HC Securities
HK$
5,500,000
706,528
Capital contribution
Cash
MMTEC
HC Securities
US$
2,000,000
2,000,000
Intercompany loan for working capital
Cash
HC Securities
MMTEC
US$
1,446,209
1,446,209
Intercompany loan for working capital
Cash
MM Future
Gujia
RMB
18,160,500
2,800,000
Capital contribution
Cash
MMBD Trading
MM Global
US$
320,000
320,000
Capital contribution
Cash
For the year 2020
Company (Wire transfer from)
Company
(Wire transfer to)
Amount
Equivalent to
amount
(USD)
Purpose
Asset type
MMTEC
MMBD Trading
US$
100,000
100,000
Capital contribution
Cash
HC Securities
MMTEC
US$
60,000
60,000
Intercompany loan for working capital
Cash
MM Future
Gujia
RMB
8,280,199
1,180,000
Capital contribution
Cash
MMBD Trading
MM Global
US$
100,000
100,000
Capital contribution
Cash
MM Future
HC Securities
US$
445,162
445,162
Intercompany loan for working capital
Cash
HC Securities
MM Future
US$
600,000
600,000
Intercompany loan for working capital
Cash
The
enforceability and treatment of the intercompany agreements within our organization, including the intercompany loan agreements described
above used in connection with intercompany cash transfers, have not been tested in court.
43
C.
Organizational
    Structure
The
following chart illustrates MMTec's organizational structure as of April  13, 2023:
D.
Property,
    Plant and Equipment
For
a listing of our properties, see "Item 4.B. Business Overview - Properties."
ITEM
4A. UNRESOLVED STAFF COMMENTS
Not
applicable.
ITEM
5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The
following discussion and analysis of our financial condition and results of operations for the years ended December 31, 2022, 2021 and
2020 should be read in conjunction with our consolidated financial statements and related notes to those consolidated financial statements
that are included elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes 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 report.
Unless
otherwise indicated, references to the "Company", "us" or "we" refer to MMTEC, Inc. and its consolidated
subsidiaries.
44
Special
Note Regarding Forward-looking Statements
All
statements other than statements of historical fact included in this report including, without limitation, statements under "Management's
Discussion and Analysis of Financial Condition and Results of Operations" regarding our financial position, business strategy and
the plans and objectives of management for future operations, are forward-looking statements. When used in this report, words such as
"anticipate," "believe," "estimate," "expect," "intend" and similar expressions,
as they relate to us or our management, identify forward-looking statements. Such forward-looking statements are based on the beliefs
of management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially
from those contemplated by the forward-looking statements as a result of a number of factors, including those set forth under the risk
factors and business sections in this report.
A.
Operating
    Results
Overview
Our
Company develops and deploys a series of platforms, including the ETN Counter Business System, the PTN Private Fund Investment Management
System, the Personal Mobile Transaction Client System, the PC Transaction Client System, the Individual and Institutional Integrated
Account Management System, and the Quantitative Investment Transaction Platform, which comprise a business chain that enables Chinese
language speaking hedge funds, mutual funds, registered investment advisors, proprietary trading groups, and brokerage firms to engage
in securities market transactions and settlements globally.
In
2019, our company added financial advisory and investment banking business line to the roster of services it offers to its customers.
Under this new business line, the Company anticipates providing financial advising and investment banking services, including, among
others, investments, restructuring, IPO and secondary offering guidance, and venture funding advice, for PRC-based small and medium-sized
enterprises from various industries that seek access to the US capital markets. Specifically, the Company intends to assist its customers
in financings and capital formation at different stages of their growth and development.
Our
company used internally designed and built system with the US brokerage license and the Cayman fund management qualification to form
a series of MOM funds, with the main goal of discovering small and medium-sized institutional investors and helping them set up the fund
to issue securities fund products.
The
value of the Renminbi ("RMB"), the main currency used in China, fluctuates and is affected by, among other things, changes
in China's political and economic conditions. The conversion of RMB into foreign currencies such as the U.S. dollar have generally
been based on rates set by the People's Bank of China, which are set daily based on the previous day's interbank foreign
exchange market rates and current exchange rates on the world financial markets.
Basis
of Presentation
The
accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally
accepted in the United States of America ("U.S. GAAP") and with the rules and regulations of the U.S. Securities and Exchange
Commission for financial information.
The
Company's consolidated financial statements include the accounts of MMTEC and its subsidiaries. All significant intercompany accounts
and transactions have been eliminated in consolidation.
45
MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS
OF OPERATIONS
Comparison
of Results of Operations for the Years Ended December 31, 2022 and 2021.
Revenue
The
following table sets forth the components of our net revenues by amounts and percentages of our total net revenues for the periods presented:
For the Year Ended December 31,
2022
2021
US$
%
US$
%
Net revenues:
Software sales and maintenance
676,049
61.5
%
-
-
%
Placement agent services
372,677
33.9
%
-
-
%
Market data services
20,619
1.9
%
107,184
16.4
%
Fund management fee
25,782
2.3
%
153,494
23.5
%
Commissions
-
-
%
390,569
59.8
%
Other revenue
4,006
0.4
%
1,789
0.3
%
Total net revenues
1,099,133
100.0
%
653,036
100.0
%
For the years ended December 31, 2022 and 2021, we had revenue from
Software development and maintenance sales to our customers of $676,049 and $0, respectively. As a result of business development and
our acquisition of MMBD Trading, which has a fully owned subsidiary, MM Global, that engages in a single line of business as a securities
broker-dealer, our Company also had Placement agent services revenue of $372,677 and $0, and other related revenue of $4,006 and $1,789,
for the years ended December 31, 2022 and 2021, respectively. The company did not generate commissions revenue in 2022 and had commissions
revenue of $390,569 in 2021. For the years ended December 31, 2022 and 2021, we had revenue from performing market data services for our
customers of $20,619 and $107,184, respectively. MMBD Advisory is the administrator and investment advisor of MM Fund Growth SP. MM Fund
Growth SP will pay the investment advisor a management fee, out of the assets of the Portfolio. We had revenue from fund management services
of MM Fund Growth SP of $25,782 and $153,494 for the years ended December 31, 2022 and 2021.
Cost
of Revenue
Cost of
revenue consists primarily of internal labor cost and related benefits, and other overhead costs that are directly attributable to services
provided.
For
the years ended December 31, 2022 and 2021, cost of revenue was $231,084 and $141,302, respectively.
46
Gross
Profit and Gross Margin
Our
gross profit was $868,049 for the year ended December 31, 2022, representing gross margin of 79.0%.  Gross profit was $511,734 for
the year ended December 31, 2021, representing gross margin of 78.4%. Our increased gross margin was primarily attributable to our newly
launched businesses, placement agent services and software sales and maintenance, which have a higher gross profit and gross margin than
our other businesses.
Operating
Expenses
During
the years ended December 31, 2022 and 2021 operating expenses included selling and marketing, payroll and related benefits, professional
fees, and other general and administrative expenses.
Selling
and Marketing Expenses
Selling
and marketing expenses totaled $1,007,652 for the year ended December 31, 2022, as compared to $303,079 for the year ended December 31,
2021, an increase of $704,573 or 232.5%. During the year ended December 31, 2022, the increase was primarily attributable to the increase
in selling staff.
Payroll
and Related Benefits
Payroll
and related benefits totaled $2,609,849 for the year ended December 31, 2022, as compared to $2,446,019 for the year ended December 31,
2021, an increase of $163,830 or 6.7%. As a result of the expansion of the Company's overall business scale, the Company increased
the size of and level of spending on support team for investment banking business.
Professional
Fees
For
the years ended December 31, 2022 and 2021, Professional Fees consisted of the following:
Year Ended
Year Ended
December 31,
December 31,
2022
2021
Audit fees
$
267,283
$
231,120
Legal fees
286,508
479,126
Financial consulting fees
519,956
664,916
Advisory fees
83,333
319,820
Others
54,585
388,037
$
1,211,665
$
2,083,019
●
For
    the year ended December 31, 2022, audit fees increased by $36,163, or 15.6%, as compared to the year ended December 31, 2021. The
    increase was primarily attributable to the increasing audit fee charged by MaloneBailey, LLP.
●
For
the year ended December 31, 2022, legal fees decreased by $192,618, or 40.2%. The decrease was primarily attributable to the fact that
legal services incurred in 2022 were relatively routine in contrast to 2021 when the Company incurred
additional legal expenses in connection with its public offering and license application
.
●
For
    the year ended December 31, 2022, financial consulting fee decreased by $144,960, or 21.8%. The decrease was primarily attributable
    to less demand for financial consulting in 2022.
●
For the year ended December 31, 2022, advisory fees decreased by $236,487, or 73.9%. The decrease was primarily attributable to a reduction in consulting services due to decreased commission business activities in 2022.
●
For the year ended December 31, 2022, other miscellaneous items decreased by $333,452, or 85.9%. The decrease was primarily attributable to a reduction in the Company's the broker dealer business .
47
Other
General and Administrative Expenses
For
the years ended December 31, 2022 and 2021, other general and administrative expenses consisted of the following:
Year Ended
Year Ended
December 31,
December 31,
2022
2021
Rent and related utilities
$
413,238
$
398,449
ETC clearing cost
32,000
153,179
Technical service fee
192,957
279,859
Referral fee
-
120,000
NASDAQ application and listing fee
59,500
32,672
Travel and entertainment
70,905
109,337
ATS execution fee
-
55,524
Fund SPC service fee
190,347
83,964
Training fee
27,981
84,833
Bad debt expense
100,000
550,000
Regulatory Fee
516,234
-
Others
328,336
294,984
$
1,931,498
$
2,162,801
●
For
    the year ended December 31, 2022, rent and related utilities increased by $14,789, or 3.7%, as compared to the year ended December
    31, 2021. The increase was primarily attributable to the increase in our office space resulting from our business needs.
●
For the year ended December 31, 2022, ETC clearing cost for broker dealer
decreased by $121,179, or 79.1%, as compared to the year ended December 31, 2021. The decrease was primarily attributable to MM Global's
suspension of the development of a retail broker dealer business line.
●
For
    the year ended December 31, 2022, technical service fee decreased by $86,902, or 31.1%, The decrease was primarily attributable to
    demand for technical service reduction in 2022.
●
For
    the year ended December 31, 2022, the company did not incur referral fee and incur $120,000 corresponding expenses in the year ended
    December 31, 2021. The decrease was primarily attributable to referral of investor and promotion of financing related to the private
    placement in 2021 but there was no such activity in 2022.
●
For the year ended December 31, 2022, NASDAQ application and listing
fees increased by $26,828, or 82.1%, as compared to the year ended December 31, 2021. The NASDAQ application and listing fees increase
was primarily attributable to increasing annual listing fee and service fees charged by NASDAQ.
●
For
    the year ended December 31, 2022, travel and entertainment expenses decreased by $38,432, or 35.2%, as compared to the year ended
    December 31, 2021, which was mainly attributable to increased impact of COVID-19 on travel and entertainment in 2022.
●
For the
    year ended December 31, 2022, ATS execution fee for broker-dealer services was $0 compared to $55,524 for the year ended December
    31, 2021. The decrease was primarily attributable to a reduction by MM Global of activities relating to the retail broker dealer
    business line in 2022.
48
●
For
    the year ended December 31, 2022, Fund SPC service fees increased by $106,383, or 126.7%, as compared to the year ended December
    31, 2021. We formed 5 new segregated portfolio of Fundex SPC and MM Fund SPC in the year ended December 31, 2022.
●
For the year ended December 31, 2022, training fee decreased by $56,852,
or 67.0%, as compared to the year ended December 31, 2021, which was mainly attributable to the reduced employee training activities from
outside in the year ended December 31, 2022
●
For
the year ended December 31, 2022, bad debt expense decreased by $450,000, or 81.8%, the Company fully recorded allowance for bad debts
of loan receivable from HY future limited in 2022 and fully recorded allowance for bad debts of loan receivable from HuaMei Trading Management
Limited due to its poor performance in 2021.
●
For
    the year ended December 31, 2022, regulatory fees increased by $516,234 compared to $0 in the year ended December 31, 2021. The increase
    was primarily attributable to the  fine paid by the Company in connection with a settlement entered into with FINRA.
●
Other
    general and administrative expenses were primarily comprised of office
supplies, internet service fee, and depreciation. For the year ended December 31, 2022, other general and administrative expenses increased
by $33,352, or 11.3%, as compared to the year ended December 31, 2021. This increase was primarily attributable to more office supplies
used in headquarter and Beijing center.
Loss
from Operations
As a result of the foregoing, for the year ended December 31, 2022,
loss from operations amounted to $5,892,615, as compared to $6,483,184 for the year ended December 31, 2021, a decrease of $590,569, or
9.1%.
Other
Income (Expense)
Other
income (expense) mainly includes interest income from bank deposits, other income (expense), foreign currency transaction gain (loss),
loss on equity method investment and impairment loss on long-term investment. Other income, net, totaled $247,239 for the year ended
December 31, 2022, as compared to other expense of $567,571 for the year ended December 31, 2021, a change of $814,810, which was mainly
attributable to an increase in interest income from bank deposits and loan receivable of $92,714, a decrease on impairment loss on long-term
investment of $585,333, a decrease in foreign currency transaction loss of $185,171, and a decrease in other income of $48,408.
Income
Taxes
We
did not have any income taxes expense for the years ended December 31, 2022 and 2021 since we did not generate any taxable income in
these two fiscal years.
Net
Loss
As
a result of the factors described above, our net loss was $5,645,376, or $1.61 per share (basic and diluted), for the year ended December
31, 2022. Our net loss was $7,050,755, or $2.88 per share (basic and diluted), for the year ended December 31, 2021.
Foreign
Currency Translation Adjustment
Our
reporting currency is the U.S. dollar. The functional currency of our parent company - MMTEC, MM Future, MM Fund, MM Capital, HC Securities,
MMBD Trading, MM Global, MMBD Advisory, Fundex SPC and MM SPC, is the U.S. dollar and the functional currency of Gujia, is the Chinese
Renminbi ("RMB"). The financial statements of our subsidiaries whose functional currency is the RMB are translated to U.S.
dollars using period end rates of exchange for assets and liabilities, average rate of exchange for revenue and expenses and cash flows,
and at historical exchange rates for equity. As a result of foreign currency translations, which are a non-cash adjustment, we reported
a foreign currency translation loss of $184,885 and a foreign currency translation gain $45,115 for the years ended December 31, 2022
and 2021 respectively. This non-cash loss had the effect of increasing our reported comprehensive loss in 2022.
49
Comprehensive
Loss
As
a result of our foreign currency translation adjustment, we had comprehensive loss of $5,830,261 and $7,005,640 for the years ended December
31, 2022 and 2021, respectively.
Comparison
of Results of Operations for the Years Ended December 31, 2021 and 2020
For
a discussion of our results of operations for the fiscal year ended December 31, 2021 compared with the fiscal year ended December 31,
2020, see "Item 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS — RESULTS OF OPERATIONS— Comparison of Results of Operations
for the Years Ended December 31, 2021 and 2020" of our annual report on Form 20-F for the fiscal year ended December 31, 2021,
filed with the SEC on April 22, 2022.
Foreign
Currency Exchange Rate Risk
Our
operations are in China. Thus, our revenues and operating results may be impacted by exchange rate fluctuations between RMB and US dollars.
For the years ended December 31, 2022, 2021 and 2020, we had unrealized foreign currency translation gain of approximately $185,000,
unrealized foreign currency translation loss of approximately $39,000 and unrealized foreign currency translation gain of approximately
$118,000, respectively, because of changes in the exchange rate.
Inflation
The
effect of inflation on our revenue and operating results was not significant.
B.
Liquidity
    and Capital Resources
Liquidity
is the ability of a company to generate funds to support its current and future operations, satisfy its obligations and otherwise operate
on an ongoing basis. As of December 31, 2022 and 2021, we had cash balance of approximately $3,825,000 and $11,206,000, respectively.
A portion of these funds are kept in financial institutions located in China.
Under
applicable PRC regulations, foreign invested enterprises, or FIEs, in China may pay dividends only out of their accumulated profits,
if any, determined in accordance with PRC accounting standards and regulations. In addition, a foreign invested enterprise in China is
required to set aside at least 10% of its after-tax profit based on PRC accounting standards each year to its general reserves until
the cumulative amount of such reserves reach 50% of its registered capital. These reserves are not distributable as cash dividends.
In
addition, a majority of our businesses and assets are denominated in RMB, which is not freely convertible into foreign currencies. All
foreign exchange transactions take place either through the People's Bank of China or other banks authorized to buy and sell foreign
currencies at the exchange rates quoted by the People's Bank of China. Approval of foreign currency payments by the People's
Bank of China or other regulatory institutions requires submitting a payment application form together with suppliers' invoices,
shipping documents and signed contracts. These currency exchange control procedures imposed by the PRC government authorities may restrict
the ability of our PRC subsidiary to transfer its net assets to the Parent Company through loans, advances or cash dividends.
The
current PRC Enterprise Income Tax ("EIT") Law and its implementing rules generally provide that a 10% withholding tax applies
to China-sourced income derived by non-resident enterprises for PRC enterprise income tax purposes unless the jurisdiction of incorporation
of such enterprises' shareholder has a tax treaty with China that provides for a different withholding arrangement.
The
following table sets forth a summary of changes in our working capital from December 31, 2021 to December 31, 2022:
December 31, 2021 to
December 31, 2022
December 31,
December 31,
Percentage
2022
2021
Change
Change
Working capital:
Total current assets
$
9,035,211
$
13,848,423
$
(4,813,212
)
-34.8
%
Total current liabilities
1,173,923
1,128,232
45,691
4.0
%
Working capital
$
7,861,288
$
12,720,191
$
(4,858,903
)
-38.2
%
50
Our working capital decreased
by $4,858,903 to working capital of $
7,861,288
as of December 31, 2022 from working capital
of $12,720,191 as of December 31, 2021. The decrease in working capital
was primarily attributable to a decrease in cash and cash
equivalents of approximately $7,381,000, a decrease in security deposits - current portion of approximately $94,000, a decrease in prepaid
expenses and other current assets of approximately $73,000, an increase in salary payable of approximately $97,000, an increase in accrued
liabilities and other payables of approximately $23,000 and an increase in operating lease liabilities - current portion of approximately
$49,000, offset by an increase in accounts receivable of approximately $101,000, an increase in loan receivable, net of approximately
$2,521,000, an increase in deferred offering cost of approximately $113,000 and a decrease in deferred revenue of approximately $123,000.
Because
the exchange rate conversion is different for the consolidated balance sheets and the consolidated statements of cash flows, the changes
in assets and liabilities reflected on the consolidated statements of cash flows are not necessarily identical with the comparable changes
reflected on the consolidated balance sheets.
Cash
Flows for the Years Ended December 31, 2022, 2021 and 2020
The
following summarizes the key components of our cash flows for the years ended December 31, 2022, 2021 and 2020:
Year Ended
December 31,
2022
Year Ended
December 31,
2021
Year Ended
December 31,
2020
Net cash used in operating activities
$
(5,590,567
)
$
(4,096,506
)
$
(1,982,847
)
Net cash used in investing activities
(3,544,105
)
(2,593,181
)
(331,944
)
Net cash provided by financing activities
1,750,140
16,471,560
37,250
Effect of exchange rate on cash and cash equivalents
3,789
(1,579
)
60,946
Net increase (decrease) in cash and cash equivalents
$
(7,380,743
)
$
9,780,294
$
(2,216,595
)
Net cash flow used in operating activities for the year ended December
31, 2022 was $5,590,567, which primarily reflected our net loss of approximately $5,645,376, and the changes in operating assets and liabilities
primarily consisting of a decrease in prepaid expenses and other current assets of approximately $33,000, an increase in salary payable
of approximately $108,000, an increase in accrued liabilities and other payables of approximately $252,000, offset by a decrease of operating
lease liability of approximately $390,000, a decrease in accounts receivable of approximately $104,000, a decrease in deferred revenue
of approximately $117,000, a decrease in security deposits of approximately $27,000, and the add-back of non-cash items consisting of
noncash lease expense of approximately $368,000, depreciation of approximately $66,000, bad debt expense of $100,000, foreign currency
transaction gain of approximately $147,000, and other noncash income of approximately $89,000.
Net cash flow used in operating
activities for the year ended December 31, 2021 was $4,096,506, which primarily reflected our net loss of approximately $7,051,000, and
the changes in operating assets and liabilities primarily consisting of an increase in accrued liabilities and other payables of approximately
$274,000, an increase in deferred revenue of approximately $122,000, and an increase in salary payable of approximately $143,000, a decrease
in security deposits of approximately $466,000, offset by an increase in accounts receivable of approximately $148,000, an increase in
prepaid expenses and other current assets of approximately $55,000, a decrease of operating lease liability of approximately $394,000,
and the add-back of non-cash items consisting of noncash lease expense of approximately $353,000, depreciation of approximately $40,000,
impairment loss on long-term investment of approximately $585,000, bad debt expense of $550,000, stock-based compensation of approximately
$1,024,000, foreign currency transaction loss of approximately $39,000 and other noncash expenses of approximately $1,000, and the deduction
of gain on extinguishment of debt of approximately $42,000, gain on lease termination of approximately $4,000.
Net cash flow used in operating
activities for the year ended December 31, 2020 was $1,982,847, which primarily reflected our net loss of approximately $3,182,000, and
the changes in operating assets and liabilities primarily consisting of an increase in accounts receivable of approximately $30,000, a
decrease of operating lease liability of approximately $267,000, a decrease in accrued liabilities and other payables of approximately
$124,000, a decrease in deferred revenue of approximately $64,000, and a decrease in salary payable of approximately $49,000, offset by
a decrease in security deposits of approximately $47,000, a decrease in prepaid expenses and other current assets of approximately $207,000,
and the add-back of non-cash items consisting of noncash lease expense of approximately $337,000, depreciation of approximately $55,000,
loss on equity method investment of approximately $46,000, Stock-based compensation for non-employee of approximately $1,005,000, foreign
currency transaction loss of approximately $35,000 and noncash other expense of approximately $1,000.
51
Net cash flow used in investing activities was $3,544,105 for the year
ended December 31, 2022 as compared to $2,593,181 for the year ended December 31, 2021 and $331,944 for the year ended December 31, 2020.
During the year ended December 31, 2022, the Company made payments for purchases of property and equipment of approximately $4,000, made
loans to third parties of $2,615,000, and made deposits for business acquisitions of $1,000,000, offset by collection of loan to third
parties of $75,000. During the year ended December 31, 2021, the Company made payments for purchase of property and equipment of approximately
$37,000, and for purchase of long-term investments of $350,000, and loan to third parties of $2,300,000, offset by collection of loan
to related party of approximately $94,000. During the year ended December 31, 2020, the Company made payments for purchase of property
and equipment of $18,000, and for purchase of long-term investments of approximately $874,000, offset by collection of loan to related
party of approximately $80,000, collection of loan to employee of approximately $174,000 and collection of investment refund of approximately
$307,000.
Net
cash flow provided by financing activities was $1,750,140 for the year ended December 31, 2022 as compared to $16,471,560 for the year
ended December 31, 2021 and $37,250 for the year ended December 31, 2020. During the year ended December 31, 2022, we received proceeds
from issuance of stocks of approximately $1,750,000. During the year ended December 31, 2021, we received proceeds from issuance of stocks
of approximately $16,637,000, offset by payment on finance lease of approximately $163,000, repayments made to related parties of approximately
$2,000. During the year ended December 31, 2020, we received proceeds from long-term loan of approximately $41,000, offset by repayments
made to related parties of approximately $4,000.
Our capital requirements for
the next twelve months primarily relate to working capital requirements, including salaries, fees related to third parties' professional
services, reduction of accrued liabilities, and the development of business opportunities. These uses of cash will depend on numerous
factors including our future sales revenue and our ability to control costs. All funds received have been expended in the furtherance
of growing the business. The following trends are reasonably likely to result in a material decrease in our liquidity over the near to
long term:
●
An increase in working capital requirements to finance our current business;
●
The use of capital for the development of business opportunities;
●
Addition of administrative and sales personnel as the business grows; and
●
The cost of being a public company.
Initial Public Offering
On
January 7, 2019, we completed our initial public offering (the "IPO") on the NASDAQ Capital Market under the symbol of "MTC".
We offered 1,800,000 common shares at $4 per share. Net proceeds raised by us from the initial public offering amounted to approximately
$6,478,801 after deducting underwriting discounts and commissions and other offering expenses. Out of the $6.5 million net proceeds, $500,000
was deposited into an escrow account to satisfy the initial $500,000 in potential indemnification obligations arising during an escrow
period of two years following the closing date of January 7, 2019. On January 7, 2019, we sold additional 270,000 common shares at $4
per share. Net proceeds raised by us amounted to $993,600 after deducting underwriting discounts. As a result, we raised a total of $7,472,401
from the issuance of 2,070,000 shares of common stock in January 2019.
Currently, we use our cash
to support our operations and to provide working capital for our ongoing operations and obligations. Considering our available cash together
with our cash inflow from the IPO, we believe that we will meet our anticipated cash requirements for the next twelve months.
52
Registered
Direct Offering and Private Placement
On
February 22, 2021 we entered into a Securities Purchase Agreement with certain institutional investors in connection with a registered
direct offering of 4,300,000 of the Company's common shares, at a purchase price of $3.70 per share. The Company sold the common
shares for aggregate gross proceeds of $
15,910,000
. The net proceeds from the transactions
were $14,637,200, after deducting certain fees due to the placement agent and the Company's transaction expenses, and will be used
for working capital and general corporate purposes.
On
December 20, 2021 we entered into a Securities Purchase Agreement with a single investor pursuant to which the investor will make a $2,000,000
investment in the Company in a Regulation S private placement. Under the terms of the Purchase Agreement, the investor will purchase 5,000,000
common shares of the Company at a purchase price of $0.40 per share. The proceeds of the transaction were $2.0 million before deducting
fees and other expenses. The Company currently intends to use the net proceeds from the transaction for growth capital and general working
capital purposes.
On
August 10, 2022, the Company entered into a common stock purchase agreement, with VG Master Fund SPC, under which, subject to specified
terms and conditions, the Company may sell to Investor up to $6.0 million of shares of common stock, par value $0.01 per share, from time
to time during the term of the Purchase Agreement. On August 12, 2022, the Company amended and restated the common stock purchase agreement
with VG Master Fund SPC which was initially entered into on August 10, 2022. Under the Purchase Agreement, subject to specified terms
and conditions, the Company may, from time to time during the term of the Purchase Agreement, sell to Investor up to the lesser of (a)
$5.5 million of shares of common stock, par value $0.01 per share, and (b) the maximum amount of securities the Company is permitted to
issue under its existing shelf registration statement, which was declared effective by the SEC on July 21, 2020. In consideration for
entering into the Purchase Agreement, the Company issued 53,334 shares of common stock to Investor as consideration for Investor's
commitment to. As of December 31, 2022, the Company sold the 1,050,000 common shares for aggregate gross proceeds of $1,256,640, and will
be used for working capital and general corporate purposes.
On
August 24, 2022, the Company's shelf registration statement for up to $300,000,000 in securities was declared effective by the SEC.
Under this shelf registration statement, the Company may offer and sell from time to time up to an aggregate of $300,000,000 of common
shares (issued separately or upon exercise of warrants), warrants, debt securities, and units of the Company's securities.
On
October 29, 2022, the Company has entered into a Securities Purchase Agreement (the "Agreement 1") with a purchaser. Pursuant
to the Agreement 1, the Company agreed to sell to this purchaser 400,000 shares of common stock for a consideration of $236,000. On December
3, 2022, the Company issued 400,000 shares to this purchaser.
On
November 23, 2022, the Company has entered into a Securities Purchase Agreement (the "Agreement 2") with a purchaser. Pursuant
to the Agreement 2, the Company agreed to sell to this purchaser 500,000 shares of common stock for a consideration of $257,500. On December
7, 2022, the Company issued 500,000 shares to this purchaser.
On February 22, 2023, the Company entered into a securities purchase agreement
(the "Agreement") pursuant to which the Company issued an unsecured senior convertible promissory note to a non-U.S. investor
(the "Investor"). The Note will mature in 24 months after the effective date of the Note. The Note has an original principal
amount of $40,000,000 and Investor paid a purchase price of $32,000,000, reflecting an original issue discount of 20%. The transaction
contemplated under the Agreement was closed on February 22, 2023.
On
February 24, 2023, the Company received a conversion notice from the Investor, and in accordance with the terms of the Note, the Company
issued an aggregate of 80,000,000 ordinary shares, par value $0.01 per share, to the Investor and its designees at a conversion price
of $0.50 per share, which represents the conversion floor price. The Investor waived the interest under the Note in connection with the
full conversion of the Note. The Company fulfilled all its obligations under the Note upon conversion. Immediately following the issuance
of the ordinary shares to the Investor, the Company has 85,145,041 ordinary shares issued and outstanding.
53
On
March 31, 2023, the Company commenced a registered direct offering of Senior Convertible Promissory Notes with an institutional investor
pursuant to a securities purchase agreement of the same date. Pursuant to the Agreement the Purchaser may purchase Senior Convertible
Promissory Notes in the aggregate original principal amount of not more than $70 million. The Notes will mature on the second anniversary
of their issuance date. The Notes have an original issue discount of 20%, resulting in an aggregate purchase price for the Offering of
up to $56 million assuming the full purchase of Notes under the Agreement. Pursuant to the Agreement, the period during which the Purchaser
may purchase the Notes began on March 31, 2023 and ends on May 11, 2023, the 30th business day after the Effective Date. There is
no minimum commitment under the Agreement.
C.
Research and development, patents and licenses
Expenditures
for research and product development costs are expensed as incurred.
For
the years ended December 31, 2022, 2021 and 2020, research and development expenses were $828,869, $744,422, and $410,840, respectively.
D.
Trend Information
Other than as disclosed elsewhere
in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have
a material effect on our net revenues, income from continuing operations, profitability, liquidity or capital resources, or that would
cause reported financial information not necessarily to be indicative of future operating results or financial condition or results of
operations.
E.
Critical Accounting Policies and Estimates
The discussion and analysis
of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with
the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions
are affected by management's application of accounting policies. We believe that understanding the basis and nature of the estimates
and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.
Please refer to
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
of our consolidated financial statements for details.
Use of Estimates
The preparation of financial
statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses
during the reporting period. Actual results could differ from these good faith estimates and judgments.
54
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A.
Directors and senior management
The following table sets forth
our executive officers and directors, their ages and the positions held by them:
Name
Age
Position
Xiangdong Wen
(1) (2)
38
Chairman of the Board and Chief Executive Officer
Min Kong
(1)
34
Chief Financial Officer
Qingshun Meng
(1) (3) (5) (6) (7)
63
Independent Director
Hinman Au
(1) (4)
57
Director
Dan Fu
(1) (4) (5) (6) (7)
36
Independent Director
Shufang Lai
(1) (3) (5) (6) (7)
36
Independent Director, Chairman of Audit Committee
(1)
The individual's business address is c/o Gujia (Beijing) Technology Co., Ltd
.,
AF, 16/F, Block B, Jiacheng Plaza, 18 Xiaguangli, Chaoyang District, Beijing, 100027 China.
(2)
Class C director whose term expires at the 2022 succeeding annual meeting of shareholders.
(3)
Class B director whose term expires at the 2024 succeeding annual meeting of shareholders.
(4)
Class A director whose term expires at the 2023 annual meeting of shareholders.
(5)
Member of audit committee.
(6)
Member of compensation committee.
(7)
Member of nominating committee.
Xiangdong Wen
has
served as the Chairman of the Board of MMTEC since January 2018 and has served as the Chief Executive Officer of MMTEC since June 2020.
Mr. Wen founded Gujia in 2015 and was Gujia's Chief Executive Officer between June 2015 and January 2016. Mr. Wen has also served
as Gujia's executive director since June 2015.  Between May 2012 and May 2015, Mr. Wen served as Chief Executive Officer of
Jiazi Investment Co., Ltd, an investment management company. Between February 2015 and June 2015, Mr. Wen served as Chief Operating Officer
of Beijing Dongfangjuhe Technology Co., Ltd, providing technology solutions to the broker/dealer industry. Mr. Wen holds a Bachelor's
degree in business management from Communication University of China.
Min Kong
has
served as the Chief Financial Officer of MMTEC since January 2018. Between June 2015 and January 2018, Mr. Kong served as the Institutional
Business Director of Gujia (Beijing) Technology Co., Ltd. Between February 2014 and February 2015, Mr. Kong served as Data Analyst Manager
of American Dental Solutions, LLC. Between April 2012 and January 2013, Mr. Kong served as Marketing Manager of Yiwu Yi Jue Trading Company.
Mr. Kong received his MBA degree from Missouri State University.
Qingshun Meng
has
served as an Independent Director of MMTEC since April 2018. Mr. Meng has served as management professor at the Communication University
of China since 2004. Mr. Meng holds a Bachelor of Science degree in Corporate Management from Shandong Institute of Mining and Technology,
and a Bachelor of Science degree in Mining Engineering from Liaoning Technical University. Mr. Meng was member of the comprehensive brand
management expert committee of China Association for Quality.
Hinman Au
has
served as a Director of MMTEC since October 2019. Since July 2016 Hinman Au served as Chief Executive Officer of MM iGlobal, Inc., a registered
broker-dealer. From September 2012 to July 2016, he held the offices of Chief Executive Officer of Tradefield Securities, Inc., a registered
broker-dealer. From August 2014 to August 2016, he held the position of Chief Executive Officer of American Education Center, a publicly
traded company (OTCQB). Hinman Au holds a Bachelor of Science degree in Computer Science from Lehman College (CUNY, 1987), a Master of
Science degree in Electrical Engineering from State University of New York at Stony Brook (1989), and a Master of Business Administration
degree from Baruch College (CUNY, 1992).
55
Dan Fu
has served as
the Marketing Department Manager at Beijing Yingding Education Technology Co., Ltd. from July 2015 to July 2016. Ms. Fu then served as
Brand Department Manager at Baoding Huazhong Group from August 2016 to March 2021. York at Stony Brook (1989), and a Master of Business
Administration degree from Baruch College (CUNY, 1992).
Shufang Lai
has served as an Independent Director of MMTEC since June, 2020. Mrs. Lai holds the title of Assistant Professor of Finance at Southern
University of Science and Technology (PRC). Shufang Lai holds a Bachelor's degree in Accounting from Communication University of
China (2008) and a Ph.D degree in Accounting from The Chinese University of Hong Kong (2016). York at Stony Brook (1989), and a Master
of Business Administration degree from Baruch College (CUNY, 1992).
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 Law does not
limit the extent to which 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 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
Executive Compensation
The following table shows the annual compensation
paid by us for the years ended December 31, 2022, 2021 and 2020:
Equity
All Other
Total
Name/principal position
Year
Salary
Compensation
Compensation
Paid
Xiangdong Wen, CEO
2020
$
32,860
$
-
$
4,025
$
36,885
2021
$
170,724
$
-
$
2,564
$
173,288
2022
$
305,101
$
-
$
8,974
$
314,075
Min Kong, CFO
2020
$
40,486
$
-
$
5,184
$
45,670
2021
$
99,206
$
313,250
$
5,503
$
417,959
2022
$
108,342
$
$
8,981
$
117,323
Under Chinese law, 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 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.
56
Director Compensation
All directors hold office
until the next annual meeting of shareholders at which their respective class of directors is re-elected and until their successors have
been duly elected and qualified. There are no family relationships among our directors or executive officers. Officers are elected by
and serve at the discretion of the Board of Directors. Employee directors do not receive any compensation for their services. Non-employee
directors are entitled to receive $10,000 per year for serving as directors and may receive option grants from our company. In addition,
non-employee directors are entitled to receive compensation for their actual travel expenses for each Board of Directors meeting attended.
We have entered into independent director agreements with our directors which agreements set forth the terms and provisions of their engagement.
None of our officers currently
serves, or has served during the last completed fiscal year, on the compensation committee or board of directors of any other entity that
has one or more officers serving as a member of our board of directors.
C.
Board Practices
Composition of Board; Risk Oversight
Our Board of Directors presently
consists of seven directors. Pursuant to our Memorandum and Articles of Association, our officers will be elected by and serve at the
discretion of the board. A director will be removed from office automatically if, among other things, the director becomes bankrupt or
makes any arrangement or composition with his creditors, or becomes physically or mentally incapable of acting as director. Except as
noted above, there are no family relationships between any of our executive officers and directors. Officers are elected by, and serve
at the discretion of, the Board of Directors. Our Board of Directors shall hold meetings on at least a quarterly basis.
As a smaller reporting company
under the NASDAQ rules we are only required to maintain a Board of Directors comprised of at least 50% independent directors, and an audit
committee of at least two members, comprised solely of independent directors who also meet the requirements of Rule 10A-3 under the Securities
Exchange Act of 1934. 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.
Our Board of Directors 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
Chief Executive Officer serve on the board as he plays key roles in the risk oversight of our company. As a smaller reporting company
with a small Board of Directors, we believe it is appropriate to have the involvement and input of all of our directors in risk oversight
matters.
Duties of Directors
Under BVI law, our directors
have a duty to act honestly, in good faith and with a view to 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 Memorandum and Articles of Association. We have the right to seek damages if a duty
owed by our directors is breached.  A director is not required to hold shares as a qualification to office. The functions and powers
of our Board of Directors include, among others:
●
appointing officers and determining the term of office of the officers,
●
authorizing the payment of donations to religious, charitable, public or other bodies, clubs, funds or associations as deemed advisable,
●
exercising the borrowing powers of the company and mortgaging the property of the company,
●
executing checks, promissory notes and other negotiable instruments on behalf of the company, and
●
maintaining or registering a register of mortgages, charges or other encumbrances of the company.
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 Qingshun
Meng, Dan Fu and Shufang Lai 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.
57
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
of Directors 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 will be 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,
●
coordinating the oversight by our Board of Directors of our code of business conduct and our disclosure controls and procedures,
●
establishing procedures for the confidential and or anonymous submission of concerns regarding accounting, internal controls or auditing matters, and
●
reviewing and approving related-party transactions.
Our Audit Committee consists
of Shufang Lai (Chair), Qingshun Meng and Dan Fu 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 of Directors has determined that Mr. Shufang Lai 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.
58
Compensation Committee
The Compensation Committee will be responsible
for, among other matters:
●
reviewing and approving, or recommending to the Board of Directors 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 Dan Fu (Chair), Shufang Lai and Qingshun Meng. 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 will be 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 of Directors and the Board of Directors committees,
●
developing and recommending to the Board of Directors corporate governance principles and practices;
●
reviewing and monitoring our company's Code of Business Conduct and Ethics, and
●
overseeing the evaluation of our company's management.
Our Nominating Committee consists
of consists of Qingshun Meng (Chair), Dan Fu and Shufang Lai. 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.
Code of Business Conduct and Ethics
Our Board of Directors 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. We intend to disclose on our website any amendments to the Code of Business Conduct and Ethics and any waivers of the
Code of Business Conduct and Ethics that apply to our principal executive officer, principal financial officer, principal accounting officer,
controller, or persons performing similar functions.
59
Interested Transactions
A director may vote, attend
a Board of Directors 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 of Directors or otherwise contained
in the minutes of a meeting or a written resolution of the Board of Directors or any committee of the Board of Directors 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 of Directors 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 of Directors
or committees of our Board of Directors 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 of Directors 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.
Qualification
A director is not required to hold shares as a
qualification to office.
Limitation on Liability and Other Indemnification
Matters
BVI law 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 BVI courts to be contrary to public policy, such as to provide indemnification against
civil fraud or the consequences of committing a crime. Under our Memorandum and Articles of Association, we may indemnify our directors,
officers and liquidators against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and
reasonably incurred in connection with civil, criminal, administrative or investigative proceedings to which they are party or are threatened
to be made a party by reason of their acting as our director, officer or liquidator. To be entitled to indemnification, these persons
must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings, they
must have had no reasonable cause to believe their conduct was unlawful. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted for our directors or officers 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 as a matter
of United States law.
D.
Employees
The table below provides information
as to the total number of employees at the end of the last three fiscal years. We have no contracts or collective bargaining agreements
with labor unions and have never experienced work stoppages due to labor dispute. We consider our relations with our employees to be good.
2020
2021
2022
Number of Employees
31
65
57
E.
Share Ownership
See Item 7 below.
60
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A.
Major shareholders
The following table sets forth
certain information regarding beneficial ownership of our shares by each person who is known by us to beneficially own more than 5% of
our shares. The table also identifies the share ownership of each of our directors, each of our named executive officers, and all directors
and officers as a group. Except as otherwise indicated, the shareholders listed in the table have sole voting and investment powers with
respect to the shares indicated. Our major shareholders do not have different voting rights than any other holder of our shares.
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 April 13, 2023. 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 common 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 common shares held by them
are located in the United States. Applicable percentage ownership is based on 85,145,041 common shares outstanding as of April 13, 2023.
Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o MM Future Technology Limited.,Room 2302,
23rd Floor, FWD Financial Center, 308 Des Voeux Road Central, Sheung Wan, Hong Kong.
Beneficial Ownership
Name of Beneficial Owner
Common Shares
Percentage
Xiangdong Wen
    *
(1)
327,599
0.4
%
Min Kong *
35,000
0.0
%
Hinman Au *
-
**
Qingshun Meng *
-
**
Shufang Lai *
-
**
Dan Fu *
-
**
All officers and directors as a group (6 persons)
362,599
0.4
%
5% or greater beneficial owners
-
-
**
%
5% or greater beneficial owners as a group
-
**
%
*
Officer
and/or director of our company
**
Less
than 1%
(1)
Represent
(i) 309,600 shares owned by Mr. Wen and (ii) 54,001 shares owned by MMBD Information Technology Limited, of which Mr. Wen holds 33.33%.
This takes into account the 1-for-10 reverse stock split on the Company's common stock that was effectuated on July 13, 2022. MMBD
Information Technology Limited, a Hong Kong corporation with the mailing address of Rm 18D 27/F Ho King Comm. Ctr., 2-16 Fayuen St. Mongkok,
Hong Kong 999077 China.
61
As of April 13, 2023, there
were 39 registered holders of record of our common shares, based upon information received from our stock transfer agent. However, this
number does not include beneficial owners whose shares were held of record by nominees or broker dealers. 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.
B.
Related Party Transactions
Due to Related Parties
As of December 31, 2022 and 2021, balances of
due to related parties were $0.
During fiscal year ended
December 31, 2020, Hinman Au, a director of the Company, paid $4,000 expenses on behalf of the Company.
Shareholders' Contribution
During the years ended December
31, 2022, 2021 and 2020, there were no shareholder contributions to the Company for working capital needs.
C.
Interests of Experts and Counsel
Not required.
ITEM 8. FINANCIAL INFORMATION
A.
Consolidated Statements and Other Financial Information.
See Item 18 for our audited consolidated financial
statements.
62
Legal Proceedings
In the normal course of business, MM Global is
engaged in various trading and brokerage activities on a principal and agency basis through a clearing broker. As a regulated FINRA broker-dealer
MM Global is subject to regulatory trading inquiries and investigations to determine whether any violations of federal securities or FINRA
rules may have occurred. As such, MM Global has responded to FINRA inquires and continues to be subject to an open matter. MM Global submits
Letter of Acceptance, Waiver, and Consent for the purpose of proposing a settlement of the alleged rule violations on September 9, 2022.
Without admitting or denying the findings by FINRA related to Case Number 2019062623, the Company was censured, fined $450.000. Two individuals'
registration capacities were suspended for 45 days, fined $20,000 and $5,000 respectively. The Company elect to pay the fine via a 36
months' installment plan with $38,250 installment fee. As of December 31, 2022 the Company has total unpaid balance of $334,800
and recorded as "Accounts Payable" and non-current portion as "Accrue Liabilities, Non-current" in consolidation
financial statement.
Other than MM Global, we are
currently not involved in any legal proceedings; nor are we aware of any claims that could have a material adverse effect on our business,
financial condition, results of operations or cash flows.
Dividend Policy
The holders of shares of our
common shares are entitled to dividends out of funds legally available when and as declared by our board of directors. Our board of directors
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 subsidiary and other holdings and investments. In addition, the operating companies 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 common 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.
Offer and Listing Details
Our shares have been listed
on the NASDAQ Stock Market under the symbol "MTC" since January 8, 2019 following the completion of our initial public offering.
B.
Plan of Distribution
Not Applicable.
C.
Markets
Our shares have been listed
on the NASDAQ Stock Market under the symbol "MTC" since January 8, 2019 following the completion of our initial public offering.
63
D.
Selling Shareholders
Not Applicable.
E.
Dilution
Not Applicable.
F.
Expenses of the Issue
Not Applicable.
ITEM 10. ADDITIONAL INFORMATION
A.
Share Capital
Not Applicable.
B.
Memorandum and Articles of Association
The information required by
Item 10.B of Form 20-F is included in the section titled "Description of Share Capital" in our Registration Statement on Form
F-1 initially filed with the SEC on October 22, 2018, and subsequently updated (File No.: 333-227934), which section is incorporated herein
by reference.
C.
Material Contracts
The information required by
Item 10.B of Form 20-F is included in the sections titled "Our Business," "Directors and Executive Officers,"
"Related Party Transactions," and "Underwriting" in in our Registration Statement on Form F-1 initially filed
with the SEC on October 22, 2018, and subsequently updated (File No.: 333-227934), which section is incorporated herein by reference.
On
February 22, 2021 we entered into a Securities Purchase Agreement with certain institutional investors in connection with a registered
direct offering of 4,300,000 of the Company's common shares, at a purchase price of $3.70 per share. The Company sold the common
shares for aggregate gross proceeds of $
15,910,000
. The net proceeds from the transactions
were $14,637,200, after deducting certain fees due to the placement agent and the Company's transaction expenses.
On
December 20, 2021 we entered into a Securities Purchase Agreement with a single investor pursuant to which the investor will make a $2,000,000
investment in the Company in a Regulation S private placement. Under the terms of the Purchase Agreement, the investor will purchase 5,000,000
common shares of the Company at a purchase price of $0.40 per share. The gross proceeds of the transaction were $2,000,000 before deducting
fees and other expenses.
On
August 10, 2022, the Company entered into a common stock purchase agreement, with VG Master Fund SPC, under which, subject to specified
terms and conditions, the Company may sell to Investor up to $6.0 million of shares of common stock, par value $0.01 per share, from
time to time during the term of the Purchase Agreement. On August 12, 2022, the Company amended and restated the common stock purchase
agreement with VG Master Fund SPC which was initially entered into on August 10, 2022. Under the Purchase Agreement, subject to specified
terms and conditions, the Company may, from time to time during the term of the Purchase Agreement, sell to Investor up to the lesser
of (a) $6.0 million of shares of common stock, par value $0.01 per share, and (b) the maximum amount of securities the Company is permitted
to issue under its existing shelf registration statement, which was declared effective by the SEC on July 21, 2020. In consideration
for entering into the Purchase Agreement, the Company issued 53,334 shares of common stock to Investor as consideration for Investor's
commitment to. As of December 31, 2022, the Company sold the 1,050,000 common shares for aggregate gross proceeds of $1,256,640, and
will be used for working capital and general corporate purposes.
64
D.
Exchange controls
BVI Exchange Control
Under BVI 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.
China Exchange Control
Foreign Currency
Exchange
The
principal regulations governing foreign currency exchange in China are the Foreign Exchange Administration Regulations (1996), as amended
on August 5, 2008, the Administration Rules of the Settlement, Sale and Payment of Foreign Exchange (1996) and the Interim Measures
on Administration on Foreign Debts (2003). Under these regulations, Renminbi is freely convertible for current account items, including
the distribution of dividends, interest payments, trade and service-related foreign exchange transactions, but not for most capital account
items, such as direct investment, loans, repatriation of investment and investment in securities outside China, unless the prior approval
of SAFE or its local counterparts is obtained. In addition, any loans to an operating subsidiary in China that is a foreign invested enterprise,
cannot, in the aggregate, exceed the difference between its respective approved total investment amount and its respective approved registered
capital amount. Furthermore, any foreign loan must be registered with SAFE or its local counterparts for the loan to be effective. Any
increase in the amount of the total investment and registered capital must be approved by the China Ministry of Commerce or its local
counterpart. We may not be able to obtain these government approvals or registrations on a timely basis, if at all, which could result
in a delay in the process of making these loans.
The
dividends paid by the subsidiary 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 Chinese governmental authorities.
Circular 37
On
July 4, 2014, SAFE issued Circular 37, which became effective as of July 4, 2014. According to Circular 37, Chinese 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 Chinese
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, Chinese residents who have contributed domestic assets or interests to a SPV, but failed
to complete foreign exchange registration of overseas investments as required prior 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.
Chinese
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 Chinese company owned by Chinese residents in the future, such Chinese residents
will be subject to the registration procedures described in Circular 37.
65
Regulations on
Offshore Parent Holding Companies' Direct Investment in and Loans to Their PRC Subsidiaries
An
offshore company may invest equity in a Chinese company, which will become the Chinese 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, Ministry of Commerce and SAFE.
Shareholder
loans made by offshore parent holding companies to their Chinese subsidiaries are regarded as foreign debts in China for regulatory purpose,
which is subject to a number of Chinese laws and regulations, including the Chinese 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 Chinese subsidiaries shall be registered with
SAFE. Furthermore, the total amount of foreign debts that can be borrowed by such Chinese subsidiaries, including any shareholder loans,
shall not exceed the difference between the total investment amount and the registered capital amount of the Chinese subsidiaries, both
of which are subject to the governmental approval.
Regulation of Dividend
Distribution
The
principal regulations governing the distribution of dividends by foreign holding companies include the Company Law of China (1993), as
amended in 2013, the Foreign Investment Enterprise Law (1986), as amended in 2000, and the Administrative Rules under the Foreign Investment
Enterprise Law (1990), as amended respectively in 2001 and 2014.
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 Chinese 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.
E.
Taxation
The following sets forth the
material BVI, Chinese and U.S. federal income tax matters related to an investment in our common shares. It is directed to U.S. Holders
(as defined below) of our common shares and is based on laws and relevant interpretations thereof in effect as of the date of this report,
all of which are subject to change. This description does not deal with all possible tax consequences relating to an investment in our
common shares, such as the tax consequences under state, local and other tax laws. Ogier, our counsel as to the BVI law, advised us on
the BVI taxation matters and their opinion is set forth in the discussion below. The following brief description applies only to U.S.
Holders (defined below) that hold common shares as capital assets and that have the U.S. dollar as their functional currency. This brief
description is based on the tax laws of the United States in effect as of the date of this report and on U.S. Treasury regulations in
effect or, in some cases, proposed, as of the date of this report, as well as judicial and administrative interpretations thereof available
on or before such date. All of the foregoing authorities are subject to change, which change could apply retroactively and could affect
the tax consequences described below. The brief description below of the U.S. federal income tax consequences to "U.S. Holders"
will apply to you if you are a beneficial owner of common shares and you are, for U.S. federal income tax purposes:
●
an individual who is a citizen or resident of the United States,
●
a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the United States, any state thereof or the District of Columbia,
●
an estate whose income is subject to U.S. federal income taxation regardless of its source, or
●
a trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.
66
PRC Enterprise Income Tax
According to the Enterprise
Income Tax Law of PRC (the "EIT Law"), which was promulgated on March 16, 2007, last amended in February 2017 and became
effective as of January 1, 2008, the income tax for both domestic and foreign-invested enterprises is at a uniform rate of 25%. The
Regulation on the Implementation of Enterprise Income Tax Law of the PRC (the "EIT Rules") was promulgated on December 6,
2007 and became effective on January 1, 2008. On April 14, 2008, the Chinese Ministry of Science and Technology, Ministry of Finance
and State Administration of Taxation enacted the Administrative Measures for Certifying High and New Technology Enterprises (the "Certifying
Measures"), which retroactively became effective on January 1, 2008 and was amended on January 29, 2016. In the years ended December
31, 2020 and 2019, Gujia was recognized as small low-profit enterprises and received a preferential income tax rate of 5%. Under the EIT
Law, an enterprise established outside of China with a "de facto management body" within China is considered a "resident
enterprise", which means that it is treated in a manner similar to a Chinese enterprise for enterprise income tax purposes. Although
the implementation rules of the EIT Law define "
de facto
management body" as a managing body that exercises substantive
and overall management and control over the production and business, personnel, accounting books and assets of an enterprise, the only
official guidance for this definition currently available is set forth in Circular 82 issued by the State Administration of Taxation,
at April 22, 2009 which provides that a foreign enterprise controlled by a PRC company or a PRC company group will be classified as a
"resident enterprise" with its "
de facto
management bodies" located within China if the following
criteria are satisfied:
●
the place where the senior management and core management departments that are in charge of its daily operations perform their duties is mainly located in the PRC,
●
its financial and human resources decisions are made by or are subject to approval by persons or bodies in the PRC,
●
its major assets, accounting books, company seals, and minutes and files of its board and shareholders' meetings are located or kept in the PRC, and
●
more than half of the enterprise's directors or senior management with voting rights frequently reside in the PRC.
We do not believe that we
meet the conditions outlined in the preceding paragraph since we do not have a PRC enterprise or enterprise group as our primary controlling
shareholder. In addition, we are not aware of any offshore holding companies with a corporate structure similar to our company that has
been deemed a PRC "resident enterprise" by the PRC tax authorities.
If we are deemed a China resident
enterprise, we may be subject to the EIT at the rate of 25% on our global income, except that the dividends we receive from our Chinese
subsidiaries may be exempt from the EIT to the extent such dividends are deemed dividends among qualified resident enterprises. If we
are considered a resident enterprise and earn income other than dividends from our Chinese subsidiaries, a 25% EIT on our global income
could significantly increase our tax burden and materially and adversely affect our cash flow and profitability.
PRC Value Added Tax ("VAT")
Pursuant to the Provisional
Regulations on Value-added Tax (VAT) of the PRC last amended on February 6, 2016 and became effective from January 1, 2009 and the Detailed
Rules for the Implementation of the Provisional Regulation of China on VAT last amended on October 28, 2011 and effective as of November
1, 2011, all entities or individuals in the PRC engaging in the sale of goods, the provision of processing services, repairs and replacement
services, and the importation of goods are required to pay VAT.
According to the requirements
of the Notice of the Ministry of Finance and the State Administration of Taxation on Implementing the Pilot Program of Replacing Business
Tax with Value-Added Tax in an All-round Manner (Cai Shui [2016] Document No. 36) and the annexes thereto, namely The Measures for Implementing
the Pilot Program of Replacing Business Tax with Value-Added Tax, the Provisions on Relevant Matters concerning the Pilot Program of Replacing
Business Tax with Value-Added Tax, the Provisions on the Transitional Policies for the Pilot Program of Replacing Business Tax with Value-Added
Tax, and the Provisions on the Application of VAT Zero Rate and VAT Exemption Policy to Cross-border Taxable Activities, effective from
1 May 2016, the pilot program of replacing business tax with value-added tax was implemented across the country, and the payment of business
tax for taxpayers in the construction industry, the real estate industry, the financial industry, and the living service industry shall
be replaced with the payment of value-added tax at 6% for general VAT payer, and 3% for small-scale VAT payer. Gujia was identified
as a general VAT payer on December 1, 2021.
67
BVI Taxation
The company and all distributions,
interest and other amounts paid by the company in respect of the common shares of the company to persons who are not resident in the BVI
are exempt from all provisions of the Income Tax Ordinance in the BVI.
No estate, inheritance, succession
or gift tax, rate, duty, levy or other charge is payable by persons who are not resident in the BVI with respect to any common shares,
debt obligations or other securities of the company.
All instruments relating to
transactions in respect of the common shares, debt obligations or other securities of the company and all instruments relating to other
transactions relating to the business of the company are exempt from payment of stamp duty in the BVI provided that they do not relate
to real estate in the BVI.
There are currently no withholding
taxes or exchange control regulations in the BVI applicable to the company or its shareholders.
United States Federal Income
Taxation
The following does not address
the tax consequences to any particular investor or to persons in special tax situations such as:
●
banks,
●
financial institutions,
●
insurance companies,
●
regulated investment companies,
●
real estate investment trusts,
●
broker-dealers,
●
traders that elect to mark to market,
●
U.S. expatriates,
●
tax-exempt entities,
●
persons liable for alternative minimum tax,
●
persons holding our common shares as part of a straddle, hedging, conversion or integrated transaction,
●
persons that actually or constructively own 10% or more of our common shares,
●
persons who acquired our common shares pursuant to the exercise of any employee common share option or otherwise as consideration, or
●
persons holding our common shares through partnerships or other pass-through entities.
Prospective purchasers are
urged to consult their tax advisors about the application of the U.S. Federal tax rules to their particular circumstances as well as the
state, local, foreign and other tax consequences to them of the purchase, ownership and disposition of our common shares.
68
Taxation of Dividends and
Other Distributions on our Common Shares
Subject to the passive foreign
investment company rules discussed below, the gross amount of distributions made by us to you with respect to the common shares (including
the amount of any taxes withheld therefrom) will generally be includable in your gross income as dividend income on the date of receipt
by you, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under
U.S. federal income tax principles). With respect to corporate U.S. Holders, to the extent that the amount of the distribution exceeds
our current and accumulated earnings and profits (as determined under U.S. federal income tax principles), it will be treated first as
a tax-free return of your tax basis in your common shares, and to the extent the amount of the distribution exceeds your tax basis, the
excess will be taxed as capital gain. We do not intend to calculate our earnings and profits under U.S. federal income tax principles.
Therefore, a U.S. Holder should expect that a distribution will be treated as a dividend even if that distribution would otherwise be
treated as a non-taxable return of capital or as capital gain under the rules described above. The dividends will not be eligible for
the dividends-received deduction allowed in respect of dividends received from other U.S. corporations.
With respect to non-corporate
U.S. Holders, including individual U.S. Holders, dividends will be taxed at the lower capital gains rate applicable to qualified dividend
income, provided that (1) the common shares are readily tradable on an established securities market in the United States, or
we are eligible for the benefits of an approved qualifying income tax treaty with the United States that includes an exchange of information
program, (2) we are not a passive foreign investment company (as discussed below) for either our taxable year in which the dividend
is paid or the preceding taxable year, and (3) certain holding period requirements are met. Under U.S. Internal Revenue Service authority,
our common shares will be considered for purpose of clause (1) above to be readily tradable on an established securities market in
the United States if they are listed on the NASDAQ Capital Market. You are urged to consult your tax advisors regarding the availability
of the lower rate for dividends paid with respect to our common shares, including the effects of any change in law after the date of this
report.
Dividends on our common shares
will constitute foreign source income for foreign tax credit limitation purposes. If the dividends are taxed as qualified dividend income
(as discussed above), the amount of the dividend considered for purposes of calculating the foreign tax credit limitation will be limited
to the gross amount of the dividend, multiplied by the reduced rate divided by the highest rate of tax normally applicable to dividends.
The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose,
dividends distributed by us with respect to our common shares will constitute "passive category income" but could, in the
case of certain U.S. Holders, constitute "general category income."
Taxation of Dispositions
of Common Shares
Subject to the passive foreign
investment company rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of
common shares equal to the difference between the amount realized (in U.S. dollars) for the share and your tax basis (in U.S. dollars)
in the common shares. The gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder, including an individual U.S.
Holder, who has held the common shares for more than one year, you will be eligible for the capital gains tax rate of 20% (or lower for
individuals in lower tax brackets). The deductibility of capital losses is subject to limitations. Any such gain or loss that you recognize
will generally be treated as United States source income or loss for foreign tax credit limitation purposes.
Passive Foreign Investment
Company
Based on our current and anticipated
operations and the composition of our assets, we do not expect to be a passive foreign investment company, or PFIC, for U.S. federal
income tax purposes for our current taxable year ending December 31, 2022. Our actual PFIC status for the current taxable years ending
December 31, 2022 will not be determinable until after the close of such year and, accordingly, there is no guarantee that we will
not be a PFIC for the current year. PFIC status is a factual determination for each taxable year which cannot be made until the close
of the taxable year. A non-U.S. corporation is considered a PFIC for any taxable year if either:
●
at least 75% of its gross income is passive income, or
●
at least 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income (the "asset test").
69
We will be treated as owning
our proportionate share of the assets and earning our proportionate share of the income of any other corporation in which we own, directly
or indirectly, at least 25% (by value) of the stock. We must make a separate determination each year as to whether we are a PFIC. As a
result, our PFIC status may change. In particular, because the value of our assets for purposes of the asset test will generally be
determined based on the market price of our common shares, our PFIC status will depend in large part on the market price of our common
shares. Accordingly, fluctuations in the market price of the common shares may cause us to become a PFIC. In addition, the application
of the PFIC rules is subject to uncertainty in several respects and the composition of our income and assets will be affected by how,
and how quickly, we spend the cash we raise in this offering. If we are a PFIC for any year during which you hold common shares, we will
continue to be treated as a PFIC for all succeeding years during which you hold common shares. However, if we cease to be a PFIC, you
may avoid some of the adverse effects of the PFIC regime by making a "deemed sale" election with respect to the common shares.
If we are a PFIC for any taxable
year during which you hold common shares, you will be subject to special tax rules with respect to any "excess distribution"
that you receive and any gain you realize from a sale or other disposition (including a pledge) of the common shares, unless you make
a "mark-to-market" election as discussed below. Distributions you receive in a taxable year that are greater than 125% of
the average annual distributions you received during the shorter of the three preceding taxable years or your holding period for the common
shares will be treated as an excess distribution. Under these special tax rules:
●
the excess distribution or gain will be allocated ratably over your holding period for the common shares,
●
the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and
●
the amount allocated to each other year will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year. The tax liability for amounts allocated to such years cannot be offset by any net operating losses for such years, and gains realized on the sale of the common shares cannot be treated as capital, even if you hold the common shares as capital assets.
A U.S. Holder of "marketable
stock" (as defined below) in a PFIC may make a mark-to-market election for such stock to elect out of the tax treatment discussed
above. If you make a mark-to-market election for the common shares, you will include in income each year an amount equal to the excess,
if any, of the fair market value of the common shares as of the close of your taxable year over your adjusted basis in such common shares.
You are allowed a deduction for the excess, if any, of the adjusted basis of the common shares over their fair market value as of the
close of the taxable year. However, deductions are allowable only to the extent of any net mark-to-market gains on the common shares included
in your income for prior taxable years. Amounts included in your income under a mark-to-market election, as well as gain on the actual
sale or other disposition of the common shares, are treated as ordinary income. Ordinary loss treatment also applies to the deductible
portion of any mark-to-market loss on the common shares, as well as to any loss realized on the actual sale or disposition of the common
shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such common shares.
Your basis in the common shares will be adjusted to reflect any such income or loss amounts. If you make a valid mark-to-market election,
the tax rules that apply to distributions by corporations that are not PFICs would apply to distributions by us, except that the lower
applicable capital gains rate for qualified dividend income discussed above under "Taxation of Dividends and Other Distributions
on our Common Shares" generally would not apply.
The mark-to-market election
is available only for "marketable stock", which is stock that is traded in other than
de minimis
quantities
on at least 15 days during each calendar quarter ("regularly traded") on a qualified exchange or other market (as defined
in applicable U.S. Treasury regulations), including the NASDAQ Capital Market. If the common shares are regularly traded on the NASDAQ
Capital Market and if you are a holder of common shares, the mark-to-market election would be available to you were we to be or become
a PFIC.
70
Alternatively, a U.S. Holder
of stock in a PFIC may make a "qualified electing fund" election with respect to such PFIC to elect out of the tax treatment
discussed above. A U.S. Holder who makes a valid qualified electing fund election with respect to a PFIC will generally include in gross
income for a taxable year such holder's pro rata share of the corporation's earnings and profits for the taxable year. However,
the qualified electing fund election is available only if such PFIC provides such U.S. Holder with certain information regarding its earnings
and profits as required under applicable U.S. Treasury regulations. We do not currently intend to prepare or provide the information that
would enable you to make a qualified electing fund election. If you hold common shares in any year in which we are a PFIC, you will be
required to file U.S. Internal Revenue Service Form 8621 regarding distributions received on the common shares and any gain realized on
the disposition of the common shares.
You are urged to consult your
tax advisors regarding the application of the PFIC rules to your investment in our common shares and the elections discussed above.
Information Reporting and
Backup Withholding
Dividend payments with respect
to our common shares and proceeds from the sale, exchange or redemption of our common shares may be subject to information reporting to
the U.S. Internal Revenue Service and possible U.S. backup withholding at a current rate of 28%. Backup withholding will not apply, however,
to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other required certification on U.S. Internal Revenue
Service Form W-9 or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status generally
must provide such certification on U.S. Internal Revenue Service Form W-9. U.S. Holders are urged to consult their tax advisors regarding
the application of the U.S. information reporting and backup withholding rules.
Backup withholding is not
an additional tax. Amounts withheld as backup withholding may be credited against your U.S. federal income tax liability, and you may
obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the
U.S. Internal Revenue Service and furnishing any required information.
F.
Dividends and paying agents
Not required.
G.
Statement by experts
Not required.
H.
Documents on display
Documents concerning us that
are referred to in this document may be inspected at AF, 16/F, Block B, Jiacheng Plaza,18 Xiaguangli, Chaoyang District, Beijing, 100027
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
Not required.
71
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Interest
Rate Risk
As
of December 31, 2022, we had no short-term borrowings and long-term borrowings. As of December 31, 2021, we had no short-term borrowings.
Our exposure to market risk for changes in interest rates relates primarily to the interest income generated by our cash deposits with
our banks. We have not been exposed, nor do we anticipate being exposed to material risks due to changes in interest rates. However, our
future interest income may fall short of expectations due to changes in interest rates.
Credit Risk
As
of December 31, 2022 and 2021, we had cash and cash equivalents of $3,825,477 and $11,206,220, respectively. Our cash and cash equivalents
are invested primarily in savings and deposit accounts with original maturities of three months or less. Savings and deposit accounts
generate a small amount of interest income.
Inflation
Risk
Inflationary
factors such as increases in the cost of our product may adversely affect our operating results. Although we do not believe that inflation
has had a material effect on our financial position or results of operations to date, a high rate of inflation in the future may have
an adverse effect on our ability to maintain current levels of gross profit and selling and marketing, general and administrative expenses
as a percentage of revenue if the selling prices of our products do not increase with these increased costs.
Foreign
Exchange 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 depreciated by 2.3% in fiscal 2021
and appreciated by 9.2% 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.
Commodity
Risk
We
are not exposed to commodity price risk.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Not required.
72
PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
There has been no default of any indebtedness nor
is there any arrearage in the payment of dividends.
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.
The
following "Use of Proceeds" information relates to the registration statement on Form F-1, as amended (File Number 333-227934),
which was declared effective December 26, 2018, for our IPO in which we offered and sold an aggregate 1,800,000 common shares at
$4 per share. Net proceeds raised by us from the IPO amounted to approximately $6,478,801 after deducting underwriting discounts and commissions
and other offering expenses. Out of the $6.5 million net proceeds, $500,000 was deposited into an escrow account to satisfy the initial
$500,000 in potential indemnification obligations arising during an escrow period of two years following the IPO closing date of January
7, 2019. On January 7, 2019, we sold additional 270,000 common shares at $4 per share. Net proceeds raised by us amounted to $993,600
after deducting underwriting discounts. As a result, we raised a total of $7,472,401 from the issuance of 2,070,000 shares of common stock
in the January 2019 IPO. WestPark Capital, Inc. acted as representative for the underwriters in the IPO.
We
have earmarked and have been using the proceeds of the initial public offering as follows: approximately $3.13 million for research and
development and additional hiring, approximately $1.86 million for sales and marketing; and balance of approximately $2.48 million for
additional working capital.
As
of December 31, 2022, we have used all amounts of the net proceeds from our IPO.
ITEM 15. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Our management, with the participation
of our Chief Executive Officer and Chief Financial Officer, has performed an evaluation of the effectiveness of the design and operation
of our disclosure controls and procedures as of December 31, 2022. Based on that evaluation, management, including our Chief Executive
Officer and Chief Financial Officer, has concluded that our disclosure controls and procedures as of December 31, 2022 were effective.
Disclosure controls and procedures
are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act (i) is
recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and
(ii) is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding
required disclosure.
Management's annual report on internal
control over financial reporting
Our management is responsible
for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under
the Securities and Exchange Act of 1934. Our internal control over financial reporting is a process designed by, or under the supervision
of, our Chief Executive Officer and Chief Financial Officer and effected by our management and other personnel to provide reasonable assurance
regarding the reliability of our financial reporting and the preparation of our financial statements for external reporting purposes in
accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes
policies and procedures that pertain to the maintenance of records that in reasonable detail accurately reflect the transactions and dispositions
of our assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements
in accordance with accounting principles generally accepted in the United States of America, and that our receipts and expenditures are
being made only in accordance with the authorization of our board of directors and management; and provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our
financial statements.
Because of inherent limitations,
internal control over financial reporting may not prevent or detect misstatement. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with our policies and procedures may deteriorate.
Under the supervision and
with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, management conducted an evaluation
of the effectiveness of our internal control over financial reporting based on the criteria established in Internal Control — Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management has concluded that our internal control
over financial reporting was effective as of December 31, 2022.
73
All internal control systems,
no matter how well designed, have inherent limitations including the possibility of human error and the circumvention or overriding of
controls. Further, because of changes in conditions, the effectiveness of internal controls may vary over time. Projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate. Accordingly, even those systems determined to be effective can
provide only reasonable assurance with respect to financial statement preparation and presentation. We cannot be certain that these measures
will successfully remediate the material weakness or that other material weaknesses will not be discovered in the future. If our efforts
are not successful or other material weaknesses or control deficiencies occur in the future, we may be unable to report our financial
results accurately on a timely basis or help prevent fraud, which could cause our reported financial results to be materially misstated
and result in the loss of investor confidence or delisting and cause the market price of our common stock to decline. In addition, it
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 securities.
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. Because of our status as an emerging growth
company, you will not be able to depend on any attestation from our independent registered public accountants as to our internal control
over financial reporting for the foreseeable future.
Changes in Internal Controls over Financial
Reporting
Except as discussed above,
during the year ended December 31, 2022, there were no changes in the Company's internal control over financial reporting that have
materially affected, or are reasonably likely to materially affect our company's internal control over financial reporting. It should
be noted that while our management believes that our disclosure controls and procedures provide a reasonable level of assurance; our management
does not expect that our disclosure controls and procedures or internal financial controls will prevent all errors or fraud. A control
system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control
system are met.
ITEM 16. RESERVED
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT.
Our Board of Directors has
determined that Ms. Shufang Lai 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.
ITEM 16B. CODE OF ETHICS.
Our Board of Directors 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 at http://ir.haisc.com/corporate/governance. We intend to disclose on our website any amendments to the Code of Business
Conduct and Ethics and any waivers of the Code of Business Conduct and Ethics that apply to our principal executive officer, principal
financial officer, principal accounting officer, controller, or persons performing similar functions.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Audit Fees
During
2022 and 2021, MaloneBailey, LLP's fees for the annual audit of our financial statements and the periodic reviews of the financial
statements were $240,000 and $230,025, respectively.
Audit-Related Fees
During 2022 and 2021, the Company incurred $25,000 and nil audit-related
services for services that are reasonably related to performance of the audit or review or our financial statements and are nor reported
under "Audit Fees." These services include attest services that are not required by statute or regulation and consultation
concerning financial accounting and reporting standards.
74
Tax Fees
The
company has not paid MaloneBailey, LLP for tax services in 2022 and 2021.
All Other Fees
The
company has not paid MaloneBailey, LLP for any other services in 2022 and 2021.
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.
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT
COMMITTEES.
None.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
PURCHASERS.
No purchase of our securities
were made by us or our affiliates in the 2021 fiscal year.
ITEM 16F. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
There were no changes to our certifying accountants
for the year ended December 31, 2022.
ITEM 16G. CORPORATE GOVERNANCE
Pursuant to the home country
rule exemption set forth under Nasdaq Listing Rule 5615, we elected to be exempt from the requirements of NASDAQ Listing Rule 5635, which
requires shareholder approval for (i) certain acquisitions of stock or assets of another company; (ii) an issuance of shares that will
result in a change of control of the company; (iii) the establishment or amendment of certain equity based compensation plans and arrangements;
and (iv) certain transactions (other than a public offering) involving issuances of a 20% or more of our outstanding shares. Our shares
are listed on the NASDAQ Capital Market ("NASDAQ"). As such, we are subject to corporate governance requirements imposed by
NASDAQ. Under NASDAQ rules, listed non-US companies may, in general, follow their home country corporate governance practices in lieu
of some of the NASDAQ corporate governance requirements. Except for the foregoing, we endeavor to comply with the NASDAQ corporate governance
practices and except for the foregoing, there is no significant difference between our corporate governance practices and what the NASDAQ
requires of domestic U.S. companies.
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS
THAT PREVENT INSPECTIONS.
Not applicable.
75
PART III
ITEM 17. FINANCIAL STATEMENTS
We have elected to provide financial statements
pursuant to Item 18.
ITEM 18. FINANCIAL STATEMENTS
The financial statements are filed as part of this
Annual Report beginning on page F-1.
ITEM 19. EXHIBITS
Exhibit No.
Description
1.1
Memorandum and Articles of Association (1).
2.1
Specimen Share Certificate (1).
2.2
Description of Securities
4.1
Underwriting Agreement (1)
4.2
Employment Agreement between the Company and CEO (1).
4.3
Employment Agreement between the Company and CFO (1).
4.4
Individual Loan Contract with Zhen Fan (1).
4.5
Individual Loan Contract with Xiangdong Wen (1).
4.6
Lease Agreement (1).
4.7
Share Repurchase Agreement (1).
4.8
Form of Securities Purchase Agreement entered into on February 22, 2021, by MMTec, Inc. and certain institutional investors (2).
4.9
Form of Securities Purchase Agreement entered into on December 20, 2021, by MMTec, Inc. and an investor (3).
8.1
List of Subsidiaries of the Registrant (1).
11.1
Code of Conduct and Ethics (1).
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.
15.1
Consent of Malone Bailey LLP.
99.1
Charter of the Audit Committee (1).
99.2
Charter of the Compensation Committee (1).
99.3
Charter of the Nominating Committee (1).
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 as part of the registration statement filed with the SEC on October 22, 2018 and incorporated by reference herein by reference.
(2)
Incorporated by reference to Exhibit 10.1 to the Company's Report on Form 6-K filed with the SEC on February 22, 2021 and incorporated by reference by reference.
(3)
Incorporated by reference to Exhibit 10.1 to the Company's Report on Form 6-K filed with the SEC on December 21, 2021 and incorporated by reference by reference.
76
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.
MMTec, Inc.
April 13, 2023
By:
/s/ Xiangdong Wen
Name:
Xiangdong Wen
Title:
Chief Executive Officer
(Principal Executive Officer)
April 13, 2023
By:
/s/ Min Kong
Name:
Min Kong
Title:
Chief Financial Officer
(Principal Financial and Accounting Officer)
77
MMTEC, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2022, 2021 and 2020
MMTEC, INC. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2022, 2021 and 2020
CONTENTS
Report of Independent Registered Public Accounting Firm (PCAOB ID
206
)
F-2
Consolidated Financial Statements:
Consolidated Balance Sheets - As of December 31, 2022 and 2021
F-3
Consolidated Statements of Operations and Comprehensive Loss - For the Years Ended December 31, 2022, 2021 and 202
0
F-4
Consolidated Statements of Changes in Shareholders' Equity - For the Years Ended December 31, 2022, 2021 and 202
0
F-5
Consolidated Statements of Cash Flows – For the Years Ended December 31, 2022, 2021 and 202
0
F-6
Notes to Consolidated Financial Statements
F-7
F-
1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the Shareholders and Board of Directors of
MMTEC, INC. and subsidiaries
Opinion on the Financial Statements
We have audited the accompanying consolidated
balance sheets of MMTEC, INC. and its subsidiaries (collectively, the "Company") as of December 31, 2022 and 2021, and the
related consolidated statements of operations and comprehensive loss, changes in shareholders' equity, and cash flows for each of the three
years in the period ended December 31, 2022, and the related notes (collectively referred to as the "financial statements").
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December
31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022,
in conformity with accounting principles generally accepted in the United States of America.
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
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB")
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the 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/
MaloneBailey, LLP
www.malonebailey.com
We have served as the Company's auditor since
2018.
Houston, Texas
April 13, 2023
F-
2
MMTEC, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN U.S. DOLLARS)
As of
December 31,
2022
December 31,
2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
3,825,477
$
11,206,220
Accounts receivable, net
295,683
194,856
Loan receivable, net
4,620,824
2,100,000
Security deposits - current
8,274
102,326
Prepaid expenses and other current assets
172,205
245,021
Deferred offering cost
112,748
-
Total Current Assets
9,035,211
13,848,423
NON-CURRENT ASSETS:
Security deposit - noncurrent
140,746
29,460
Property and equipment, net
184,423
267,433
Deposit for business acquisition
1,000,000
-
Operating lease right-of-use asset
1,055,127
442,185
Total Non-current Assets
2,380,296
739,078
Total Assets
$
11,415,507
$
14,587,501
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Deferred revenue
$
-
$
123,434
Salary payable
372,980
276,356
Accrued liabilities and other payables
395,352
372,168
Operating lease liabilities, current
405,591
356,274
Total Current Liabilities
1,173,923
1,128,232
NON-CURRENT LIABILITIES:
Accrued liabilities, noncurrent
209,250
-
Operating lease liabilities, noncurrent
647,983
107,545
Total Non-current Liabilities
857,233
107,545
Total Liabilities
2,031,156
1,235,777
Commitments and Contingencies
SHAREHOLDERS'  EQUITY:
Common shares ($
0.01
par value,
5,000,000,000
shares authorized,
5,145,041
and
3,137,001
shares issued and outstanding at December 31, 2022 and 2021, respectively) *
51,451
31,370
Additional paid-in capital
31,727,407
29,884,600
Accumulated deficit
(
22,253,030
)
(
16,607,654
)
Accumulated other comprehensive income (loss)
(
141,477
)
43,408
Total Shareholders' Equity
9,384,351
13,351,724
Total Liabilities and Shareholders' Equity
$
11,415,507
$
14,587,501
*
After giving effect to the reverse stock split effected on July
13, 2022. Also see Note 13.
The accompanying notes to consolidated financial
statements are an integral part of these statements.
F-
3
MMTEC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS
(IN U.S. DOLLARS)
For the
Year Ended
For the
Year Ended
For the
Year Ended
December 31,
2022
December 31,
2021
December 31,
2020
REVENUE
$
1,099,133
$
653,036
$
742,125
COST OF REVENUE
231,084
141,302
7,405
GROSS PROFIT
868,049
511,734
734,720
OPERATING EXPENSES:
Selling and marketing
1,007,652
303,079
244,163
General and administrative
Payroll and related benefits
2,609,849
2,446,019
1,024,565
Professional fees
1,211,665
2,083,019
1,744,395
Other general and administrative
1,931,498
2,162,801
905,748
Total Operating Expenses
6,760,664
6,994,918
3,918,871
LOSS FROM OPERATIONS
(
5,892,615
)
(
6,483,184
)
(
3,184,151
)
OTHER INCOME (EXPENSE):
Interest income
94,372
1,658
30,478
Impairment loss on long-term investment
-
(
585,333
)
-
Other income
6,366
54,774
53,646
Foreign currency transaction gain (loss)
146,501
(
38,670
)
(
35,464
)
Loss on equity method investment
-
-
(
46,105
)
Total Other Income (Expense)
247,239
(
567,571
)
2,555
LOSS BEFORE INCOME TAXES
(
5,645,376
)
(
7,050,755
)
(
3,181,596
)
INCOME TAXES
-
-
-
NET LOSS
$
(
5,645,376
)
$
(
7,050,755
)
$
(
3,181,596
)
COMPREHENSIVE LOSS:
NET LOSS
(
5,645,376
)
(
7,050,755
)
(
3,181,596
)
OTHER COMPREHENSIVE (LOSS) INCOME
Foreign currency translation adjustments
(
184,885
)
45,115
117,687
TOTAL COMPREHENSIVE LOSS
$
(
5,830,261
)
$
(
7,005,640
)
$
(
3,063,909
)
NET LOSS PER COMMON SHARE
Basic and diluted *
$
(
1.61
)
$
(
2.88
)
$
(
1.56
)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING:
Basic and diluted *
3,497,109
2,450,447
2,038,558
*
After giving effect to the reverse stock split effected on
July 13, 2022. Also see Note 13.
The accompanying notes to consolidated financial
statements are an integral part of these statements.
F-
4
MMTEC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS'
EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2022, 2021
AND 2020
(IN U.S. DOLLARS)
Common Shares *
Additional
Treasury Stock *
Accumulated Other
Total
Number of
Paid-in
Number of
Accumulated
Comprehensive
Shareholder's
Shares
Amount
Capital
Shares
Amount
Deficit
Loss
Equity
Balance, December 31, 2019
5,607,001
$
56,070
$
11,229,339
(
3,600,000
)
$
(
36,000
)
$
(
6,375,303
)
$
(
119,394
)
$
4,754,712
Issuance of common stock for cash
75,000
$
750
$
1,004,250
-
-
-
-
$
1,005,000
Treasury stock cancelled
(
3,600,000
)
$
(
36,000
)
-
3,600,000
$
36,000
-
-
-
Net loss for the year ended December 31, 2020
-
-
-
-
-
$
(
3,181,596
)
-
$
(
3,181,596
)
Foreign currency translation adjustment
-
-
-
-
-
-
$
117,687
$
117,687
Balance, December 31, 2020
2,082,001
$
20,820
$
12,233,589
-
-
$
(
9,556,899
)
$
(
1,707
)
$
2,695,803
Issuance of common stock for service
125,000
$
1,250
$
1,023,111
-
-
-
-
$
1,024,361
Issuance of common stock for cash
930,000
$
9,300
$
16,627,900
-
-
-
-
$
16,637,200
Net loss for the year ended December 31, 2021
-
-
-
-
-
$
(
7,050,755
)
-
$
(
7,050,755
)
Foreign currency translation adjustment
-
-
-
-
-
-
$
45,115
$
45,115
Balance, December 31, 2021
3,137,001
$
31,370
$
29,884,600
-
-
$
(
16,607,654
)
$
43,408
$
13,351,724
Reverse stock split adjustment
4,706
$
47
$
(
47
)
-
-
-
-
-
Issuance of common stock for direct offering cost
53,334
$
534
$
145,603
-
-
-
-
$
146,137
Issuance of common stock for cash
1,950,000
$
19,500
$
1,697,251
-
-
-
-
$
1,716,751
Net loss for the year ended December 31, 2022
-
-
-
-
-
$
(
5,645,376
)
-
$
(
5,645,376
)
Foreign currency translation adjustment
-
-
-
-
-
-
$
(
184,885
)
$
(
184,885
)
Balance, December 31, 2022
5,145,041
$
51,451
$
31,727,407
-
-
$
(
22,253,030
)
$
(
141,477
)
$
9,384,351
*
After giving effect to the reverse stock split effected on July
13, 2022. Also see Note 13.
The accompanying notes to consolidated financial
statements are an integral part of these statements.
F-
5
MMTEC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN U.S. DOLLARS)
For the
Year Ended
For the
Year Ended
For the
Year Ended
December 31,
2022
December 31,
2021
December 31,
2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
$
(
5,645,376
)
$
(
7,050,755
)
$
(
3,181,596
)
Adjustments to reconcile net loss from operations to
Net cash used in operating activities:
Depreciation expense
66,428
40,130
54,576
Impairment loss on long-term investment
-
585,333
-
Stock-based compensation
-
1,024,361
1,005,000
Allowance for bad debts
100,000
550,000
-
Loss on equity method investment
-
-
46,105
Noncash lease expense
367,631
353,419
337,221
Gain on lease termination
-
(
4,437
)
-
Gain on extinguishment of debt
-
(
41,548
)
-
Foreign currency transaction (gain) loss
(
146,501
)
38,670
35,464
Noncash other expense (income)
(
88,911
)
906
722
Changes in operating assets and liabilities:
Operating lease liability
(
389,518
)
(
393,740
)
(
266,637
)
Accounts receivable
(
104,027
)
(
148,466
)
(
30,360
)
Security deposit
(
26,596
)
465,843
47,042
Prepaid expenses and other current assets
33,015
(
54,782
)
206,743
Deferred revenue
(
117,004
)
121,984
(
63,966
)
Salary payable
108,133
142,758
(
49,024
)
Accrued liabilities and other payables
252,159
273,818
(
124,137
)
NET CASH USED IN OPERATING ACTIVITIES
(
5,590,567
)
(
4,096,506
)
(
1,982,847
)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment
(
3,792
)
(
37,068
)
(
18,379
)
Collection of loan to related party
-
93,887
79,520
Collection of loan to employee
-
-
173,974
Collection of loan to third parties
75,000
-
-
Cash received from return of investment
-
-
306,518
Purchase of long-term investment
-
(
350,000
)
(
873,577
)
Loan to third parties
(
2,615,313
)
(
2,300,000
)
-
Deposit for business acquisition
(
1,000,000
)
-
-
NET CASH USED IN INVESTING ACTIVITIES
(
3,544,105
)
(
2,593,181
)
(
331,944
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash proceeds from long-term loan
-
-
41,250
Payment on finance lease
-
(
163,301
)
-
Proceeds from issuance of stocks
1,750,140
16,637,200
-
Repayments to related parties
-
(
2,339
)
(
4,000
)
NET CASH PROVIDED BY FINANCING ACTIVITIES
1,750,140
16,471,560
37,250
EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS
3,789
(
1,579
)
60,946
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(
7,380,743
)
9,780,294
(
2,216,595
)
CASH AND CASH EQUIVALENTS - beginning of year
11,206,220
1,425,926
3,642,521
CASH AND CASH EQUIVALENTS - end of year
$
3,825,477
$
11,206,220
1,425,926
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for:
Interest
$
-
$
-
$
-
Income taxes
$
-
$
-
$
-
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Cancellation of treasury stock
$
-
$
-
$
36,000
Expenses paid by related parties on behalf of the Company
$
-
$
-
$
4,000
Acquisition consideration given up by a related party
$
-
$
-
$
1,000
Loan receivable from return of investment
$
-
$
350,000
$
92,831
Remeasurement of the lease liabilities and right-of-use assets due to lease modification
$
856,987
$
-
$
32,227
Operating lease right-of-use assets obtained in exchange for operating lease liabilities
$
171,885
$
170,112
$
-
Issuance of stock for direct offering cost
$
146,137
$
-
$
-
The accompanying notes to consolidated financial
statements are an integral part of these statements.
F-
6
NOTE 1 –
ORGANIZATION AND NATURE OF
OPERATIONS
MMTEC, INC. ("MMTEC", the "Company")
was incorporated on January 4, 2018 under the laws of the British Virgin Islands ("BVI"). On March 19, 2018, MMTEC acquired
a wholly owned subsidiary, MM Future Technology Limited ("MM Future"). MM Future was incorporated in Hong Kong on October
31, 2017 for the purpose of being a holding company for the equity interest in Gujia (Beijing) Technology Co., Ltd. ("Gujia").
Other than the equity interest in MM Future, MMTEC
does not conduct any operations or own any material assets or liabilities. MM Future does not conduct any operations or own any material
assets or liabilities except for the
100
% of the equity interest of Gujia which it acquired on January 29, 2018.
Gujia
was
incorporated in People's Republic of China ("PRC") on June 9, 2015. Gujia is a technology provider, operates as an internet
business platform to support operations. Gujia provides investment services to the U.S. securities markets for PRC investors and provides
technical services to Chinese financial institutions to help them be able to provide investment services in the U.S. securities markets
for their clients
.
On November 6, 2017, Gujia acquired a wholly-owned
subsidiary Meimei Zhengtong (Beijing) Technology Ltd. ("Meimei Zhengtong") which was dissolved in July 2018.
On March 28, 2018, the Company acquired
24.9
%
of MMBD Trading Limited. ("MMBD Trading"). MMBD Trading was incorporated on March 4, 2016 under the laws of the British Virgin
Islands. The remaining
75.1
% of MMBD Trading was owned by
32.7
% shareholders of the Company. The Company agreed to purchase the remaining
75.1
% of outstanding securities of MMBD Trading on April 25, 2019. The acquisition was closed on October 18, 2019. Following
and as a result of this acquisition, MMBD Trading has become a wholly-owned subsidiary of the Company. MMBD Trading acquired a wholly
owned subsidiary, MM Global Securities, INC. ("MM Global") on August 16, 2017. MMBD Trading does not conduct any operations
or own any material assets or liabilities except for the
100
% of the equity interest of MM Global. MM Global was incorporated in the State
of Illinois on September 25, 1997 as Feil Daily Investment Co. which was changed to Whitewood Group Inc. in 2011. MM Global's continuing
membership application was approved by FINRA as a broker-dealer in August 2017 and changed its name to MM IGlobal, INC. in November 2017
pursuant to the ownership change. MM IGlobal, INC. changed its name to MM Global Securities, INC. in March 2019. MM Global operates as
a securities broker/dealer in New York City.
On April 20, 2018, the Company incorporated MM
Fund Services Limited ("MM Fund"), a Cayman Islands company, for the purpose of providing administration services to the private
equity funds industry. MM Fund is dormant as of December 31, 2022.
On May 28, 2018, the Company incorporated MM Capital
Management Limited ("MM Capital"), a Cayman Islands company, for the purpose of providing assets management and investment
services to clients. MM Capital is dormant as of December 31, 2022.
On August 8, 2018, the Company incorporated MM
Fund SPC ("MM SPC"), a Cayman Islands company, for the purpose of providing asset management services to clients. MM SPC is
a wholly-owned subsidiary of MM Capital and is dormant as of December 31, 2022.
On March 15, 2019, the Company incorporated MM
Global Capital Limited, a Hong Kong company, for the purpose of providing assets management and investment services to clients, and subsequently
changed its name to HC Securities (HK) limited ("HC Securities") on December 22, 2021. HC Securities is a wholly-owned subsidiary
of MMTEC. HC Securities applied license to SFC and was approved on December 21, 2021. HC Securities is licensed on dealing in securities,
advising on securities and asset management.
On July 9, 2019, the Company acquired
49
% of a
newly-formed entity called Xchain Fintech PTE.LTD., ("Xchain"), a Singapore company, for the purpose of providing technical
support for the construction and development of a new solutions for the existing problems of the traditional financial industry, the difficulty
experienced by investors in investing and allocating investment assets globally, and the protection of funds and investments by using
advanced technologies, such as artificial intelligence, big data analysis and blockchain. Xchain is dormant as of December 31, 2022.
On March 23, 2020, the Company acquired all outstanding
securities of MMBD Investment Advisory Company Limited ("MMBD Advisory") for a consideration of $
1,000
, which was subsequently
given up by Hinman Au. Prior to this transaction, all outstanding securities of MMBD Advisory were owned by Hinman Au, a director and
1.4
% shareholder of the Company. MMBD Advisory was formed in January 2018 in the U.S. and is registered as an investment advisor firm
under the laws of the State of New York on May 7, 2018. Since May 23, 2020, MMBD Advisory was consolidated into the Company.
On September 13, 2021, the Company incorporated
Fundex SPC, a Cayman Islands company, for the purpose of providing asset management services to clients, as a wholly-owned subsidiary
of MM Capital Management Limited.
During year ended 2022,
the Company planned for a potential business acquisition and paid $1,000,000 as a deposit for the business acquisition to the shareholders
of the potential acquiree, which was included in "deposit for business acquisition" on the accompanying consolidated balance
sheets. The deposit is refundable if the acquisition fails.
MMTEC and its consolidated subsidiaries are collectively
referred to herein as the "Company", "we" or "us", unless specific reference is made to an entity.
F-
7
NOTE
2 –
BASIS OF PRESENTATION
The accompanying consolidated
financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States
of America ("U.S. GAAP") and with the rules and regulations of the U.S. Securities and Exchange Commission for financial information.
The Company's consolidated
financial statements include the accounts of MMTEC and its subsidiaries. All significant intercompany accounts and transactions have been
eliminated in consolidation.
NOTE 3 –
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Use of Estimates
The preparation of the
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 disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Significant estimates
during the years ended December 31, 2022, 2021 and 2020 include the allowance for doubtful accounts, impairment of long-term investment
and valuation of deferred tax assets.
Fair Value of Financial Instruments and
Fair Value Measurements
The
Company adopted the guidance of Accounting Standards Codification ("ASC") 820 for fair value measurements which clarifies
the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs
used in measuring fair value as follows
:
●
Level
1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date
.
●
Level
2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities 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 are unobservable inputs which reflect the reporting entity's own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information
.
The
carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, loan receivable,
net, security deposits – current portion, other current assets, salary payable, operating lease liabilities – current and
accrued liabilities and other payables approximate their fair market value based on the short-term maturity of these instruments
.
Transactions involving
related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free
market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party
transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations
can be substantiated. It is not, however, practical to determine the fair value of amounts due from or due to related parties due to their
related party nature.
F-
8
NOTE 3 –
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Cash and Cash
Equivalents
Cash
and cash equivalents
consist of cash and short-term highly liquid investments purchased with original maturities of three months or less. The Company maintains
cash with various financial institutions in China. As of December 31, 2022 and 2021, cash balances in the PRC of $
1,879,950
and $
1,252,998
,
respectively, are uninsured. The Company has not experienced any losses in bank accounts and believes it is not exposed to any risks on
its cash in PRC bank accounts. Cash equivalents are
nil
as of December 31, 2022 and 2021
.
Loan Receivable, Net
Loan receivable, net is recorded
at the uncollected principal balances, net of an allowance for doubtful accounts. An estimate for doubtful accounts is made when collection
of the full amount is no longer probable. Estimates are based on historical collection experience and current economic conditions.
Concentrations of Credit Risk
T
he
Company has operations carried out in China. Accordingly, the Company's business, financial condition and results of operations
may be influenced by the political, economic and legal environment in China, and by the general state of China's economy. The Company's
operations in China are subject to specific considerations and significant risks not typically associated with companies in North America.
The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary
measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.
Property and Equipment
Property
and equipment, including assets acquired through finance leases, are stated at cost less accumulated depreciation, and depreciated
on a straight-line basis over the estimated useful lives of the assets. Cost represents the purchase price of the asset and other costs
incurred to bring the asset into its existing use. The cost of repairs and maintenance is expensed as incurred; major replacements and
improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts,
and any resulting gains or losses are included in income/loss in the year of disposition
.
Estimated
useful lives are as follows:
Estimated useful life
Office equipment and furniture
3
-
5
Years
Leasehold improvement
The lesser of remaining lease term or
2
-
3
Years
Software
1
-
3
Years
Finance lease right-of-use asset
4
Years
F-
9
NOTE 3 –
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)
Impairment of Long-lived Assets Other Than
Goodwill
In
accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances
indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment
loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is
measured as the difference between the asset's estimated fair value and its book value. The Company did not record any impairment
charge for the years ended December 31, 2022, 2021 and 2020.
Long-term
Investments
The Company's long-term
investments consist of equity investments without readily determinable fair value which were accounted for using measurement alternative
as of December 31, 2022 and 2021.
Equity
Investment Using Measurement Alternative
The Company uses the
measurement alternative for those investments over which the company does not have significant influence, and without readily determinable
fair value and do not qualify for the net asset value practical expedient in accordance with ASU 2016-01, "Financial Instruments-Overall:
Recognition and Measurement of Financial Assets and Financial Liabilities" which was adopted on January 1, 2019. The adoption did
not have a significant impact on the Company's consolidated financial statements. The Company records these investments at cost,
less impairment, and plus or minus subsequent adjustments for observable price changes. Under this measurement alternative, changes in
the carrying value of the equity investments are required to be made whenever there are observable price changes in orderly transactions
for the identical or similar investment of the same issuer.
The Company periodically
reviews its equity investment for impairment. At each reporting date, an entity that uses the measurement alternative to measure an equity
investment without a readily determinable fair value is required to make a qualitative assessment of whether the investment is impaired.
The Company regularly evaluates the impairment of these investments based on performance and financial position of the investee as well
as other evidence of market value. Such evaluation includes, but is not limited to, reviewing the investee's cash position, recent
financing, projected and historical financial performance, cash flow forecasts and financing needs. An impairment loss recognized equal
to the excess of the investment cost over its fair value at the end of each reporting period for which the assessment is made. The fair
value would then become the new cost basis of investment.
Equity Method Investment
The Company uses the
equity method of accounting for its investment in, and earning or loss of, company that it does not control but over which it does exert
significant influence. The Company initially records its investment at cost and the difference between the cost of the equity investee
and the fair value of the underlying equity in the net assets of the equity investee is recognized as equity method goodwill, which is
included in the equity method investment on the consolidated balance sheets. The Company subsequently adjusts the carrying amount of the
investment to recognize the Company's proportionate share of each equity investee's net income or loss into earnings after
the date of investment. If an equity investment no longer qualifies to be accounted for under the equity method, the investment's
initial basis for which subsequent changes in fair value are measured should be the previous carrying amount of the investment.
The Company periodically
reviews its equity investment for impairment. Under the equity method of accounting, an impairment loss would be recorded whenever the
fair value of an equity investment is determined to be below its carrying amount and the reduction is considered to be other than temporary.
In judging "other than temporary," the Company considers the length of time and extent to which the fair value of the investment
has been less than the carrying amount of the equity investment, the near-term and long-term operating and financial prospects of the
entity and the Company's longer-term intent of retaining its investment in the entity. The Company considers whether the fair value
of its equity method investment has declined below its carrying value whenever adverse events or changes in circumstances indicate that
recorded value may not be recoverable. If the Company considers any decline to be other than temporary (based on various factors, including
historical financial results and the overall health of the investee), then a write-down would be recorded to estimated fair value.
See
NOTE 8
for
discussion of long-term investments.
F-
10
NOTE 3 –
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)
Value Added Tax
Gujia is subject to value added tax ("VAT")
for services rendered at a rate of
6
%. Gujia was identified as a general VAT payer on December 1, 2021. The amount of VAT liability
is determined by applying the applicable tax rate to the invoiced amount of professional services provided. The Company reports revenue
net of PRC's value added tax for all the periods presented in the consolidated statements of operations and comprehensive loss.
All Entities in China are also subject to surcharges on value-added tax payments in accordance with PRC law.
Revenue Recognition
The Company has adopted Accounting Standards Codification
Topic 606, "Revenue from Contracts with Customers" ("ASC 606") effective January 1, 2018. Under ASC 606, the Company
recognizes revenue when a customer obtains control of promised goods, in an amount that reflects the consideration which the Company expects
to receive in exchange for the goods. To determine revenue recognition for arrangements within the scope of ASC 606, the Company performs
the following five steps: (1) identify the contracts with a customer; (2) identify the performance obligations in the contract; (3) determine
the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when
or as the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that
the entity will collect the consideration it is entitled to in exchange for the goods it transfers to the customer.
The Company does not offer promotional payments,
customer coupons, rebates or other cash redemption offers to its customers.
Market data services and investor relation
management services revenue
The Company generates these revenues by providing
services under written service contracts with its customers. Revenue related to its service offered is recognized over time as the services
are performed when the performance obligation is satisfied.
Placement agent services
The Company generates revenue from placement agent
services by successfully selling customers' stocks to qualified investors through registered offerings or private placement activities.
Placement agent fee is recognized when the services are completed.
Software development and post-contract maintenance
The
Company generates revenue from software development and post-contract maintenance. The Company identifies two performance obligations,
as the customers can benefit from software development and post-contract maintenance separately. The transaction price is fixed in the
contract and the Company allocates the transaction price to software development and maintenance by reference to their relative standalone
selling price estimated. The Company determines the standalone selling price based on pricing objectives, taking into consideration market
conditions. The Company recognizes revenue of software development at a point of customer acceptance. The post-contract maintenance service
is performed on a standby ready basis and provided to the customer subsequent to the transfer of the software for a period of time, typically
12 months from customer acceptance. The Company recognizes revenue of maintenance over the service period.
Commissions
The Company generates revenue from commissions
through customers' transactions in stocks by providing brokerage service for its customers. Commission revenue is recognized at
a point in time on the trade date when the performance obligation is satisfied.
Fund management services
Revenue from fund management services mainly includes
management fees and performance-based fees, in a typical arrangement.
Management fees
Management fee arises from the asset management
services provided to funds the Company manages. Management fees are computed as a percentage of daily asset value and are recognized as
earned over the specified contract period.
Performance-based income
In a typical arrangement, the Company is entitled
to a performance-based fee on the extent by which the fund's investment performance exceeds a certain threshold. Such performance-based
fee is typically calculated and recognized at a point of time when the cumulative return of the fund can be determined, and is not subject
to clawback provisions.
F-
11
NOTE 3 –
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)
The following table disaggregates the Company's
revenue by revenue type:
For the Years Ended December 31,
2022
2021
2020
US$
US$
US$
Software development and post-contract maintenance
$
676,049
$
-
$
-
Placement agent services
372,677
-
-
Market data services
20,619
107,184
73,524
Investor relations management services
-
-
21,113
Commissions
-
390,569
643,145
Fund management services
25,782
153,494
-
Other revenue
4,006
1,789
4,343
Total revenues
$
1,099,133
$
653,036
$
742,125
The following table disaggregates the Company's
revenue by geographic area:
For the Years Ended December 31,
2022
2021
2020
US$
US$
US$
China
$
696,668
$
176,262
$
94,637
United States
402,465
476,774
647,488
Total revenues
$
1,099,133
$
653,036
$
742,125
Deferred revenue represents income collected but
not earned as of the reporting date. As of December 31, 2022, deferred revenue was
nil
. As of December 31, 2021, deferred revenue was
$
123,434
, of which $
123,434
was recognized as revenue in the year ended December 31, 2022.
Cost of Revenue
Cost
of
revenue consists primarily of internal labor cost and related benefits, and other overhead costs that are directly attributable to service
provided
.
Research and Development
Expenditures
for research and product development costs are expensed as incurred.
For the years ended December
31, 2022, 2021 and 2020, research and development expenses were
$
828,869
, $
744,422
, and $
410,840
,
respectively.
Selling and Marketing
Costs
All
costs related to selling and marketing are expensed as incurred. For the years ended December 31, 2022, 2021 and 2020, selling and marketing
costs were
$
1,007,652
, $
303,079
, and
$
244,163
respectively.
F-
12
NOTE 3 –
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Leases
On January 1, 2019,
the Company adopted ASU No. 2016-02, Leases (Topic 842), as amended, which supersedes the lease accounting guidance under Topic 840,
and generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use assets on the balance
sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements.
The Company elected
to apply practical expedients permitted under the transition method that allow the Company to use the beginning of the period of adoption
as the date of initial application, to not recognize lease assets and lease liabilities for leases with a term of twelve months or less,
to not separate non-lease components from lease components, and to not reassess lease classification, treatment of initial direct costs,
or whether an existing or expired contract contains a lease. The Company used modified retrospective method and did not adjust the prior
comparative periods. Under the new lease standard, the Company determines if an arrangement is or contains a lease at inception. Right-of-use
assets and liabilities are recognized at lease commencement date based on the present value of remaining lease payments over the lease
terms. The Company considers only payments that are fixed and determinable at the time of lease commencement. See
NOTE 7
for discussion
of finance lease and see
NOTE 15
for discussion of operating leases.
Segment Information
ASC 280 "Segment reporting" establishes
standards for reporting information on operating segments in interim and annual financial statements. Operating segments are defined
as the components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing performance. Our chief operating decision makers direct the allocation
of resources to operating segments based on the profitability, cash flows, and growth opportunities of each respective segment.
The Company currently has two operating segments,
Gujia, MM Future, MMBD Advisory and HC Securities, and MM Global. See
NOTE 18
for details.
Income Taxes
The Company accounts
for income taxes using the asset/liability method prescribed by ASC 740, "Income Taxes." Under this method, deferred tax
assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities
using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a
valuation allowance to offset deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some
portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized
as income or loss in the period that includes the enactment date.
The Company follows the accounting guidance for
uncertainty in income taxes using the provisions of ASC 740 "Income Taxes". Using that guidance, tax positions initially
need to be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by
the tax authorities. For the years ended December 31, 2022, 2021 and 2020, the Company had no significant uncertain tax positions that
qualify for either recognition or disclosure in the financial statements. Tax years that remain subject to examination are the years
ended December 31, 2022, 2021 and 2020. The Company recognizes interest and penalties related to significant uncertain income tax positions
in other expense. No such interest and penalties incurred for the years ended December 31, 2022, 2021 and 2020.
Foreign Currency Translation
The reporting currency
of the Company is the U.S. dollar. The functional currency of the parent company, MMTEC, and MM Future, MM Fund, MM Capital, MM SPC,
MMBD Trading, HC securities, MM Global, Fundex SPC and MMBD Advisory is the U.S. dollar and the functional currency of Gujia is the Chinese
Renminbi ("RMB"). For the subsidiary whose functional currency is the RMB, result of operations and cash flows are translated
at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period,
and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements
of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments
resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive
income/loss.
F-
13
NOTE 3 –
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Transactions denominated
in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and
liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance
sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency
other than the functional currency are included in the results of operations as incurred. All of the Company's revenue and expense
transactions are transacted in the functional currency of the operating subsidiaries. The Company does not enter into any material transaction
in foreign currencies. Transaction gains or losses have not had, and are not expected to have, a material effect on the results of operations
of the Company.
The consolidated balance
sheet amounts, with the exception of equity, as of December 31, 2022 and 2021, were translated at RMB 6.9646 to $1.00 and RMB 6.3757
to $1.00, respectively. Equity accounts were stated at their historical rates. The average translation rates applied to consolidated
statements of operations and comprehensive loss and cash flows for the years ended December 31, 2022, 2021 and 2020 were RMB 6.7261,
RMB 6.4515, and RMB 6.8976 to $1.00, respectively.
Comprehensive Loss
Comprehensive loss is
comprised of net loss and all changes to the statements of shareholders' equity, except those due to investments by shareholders,
changes in paid-in capital and distributions to shareholders. For the Company, comprehensive loss for the years ended December 31, 2022,
2021 and 2020 consisted of net loss and unrealized income/loss from foreign currency translation adjustment.
Share-based Compensation
Share based compensation arise from share-based
awards, including share options for the purchase of the Company's ordinary shares. In June 2018, the Financial Accounting Standards
Board ("FASB") issued Accounting Standards Update ("ASU") 2018-07, Compensation-Stock Compensation (Topic
718): Improvements to Nonemployee Share-Based Payment Accounting ("ASU 2018-07") to simplify the accounting for share-based
payments to nonemployees by aligning it with the accounting for share-based payments to employees. The Company adopted ASU 2018-07 on
January 1, 2019, and accounts for share-based compensation to nonemployees under the fair value method which requires all such
compensation to be calculated based on the fair value at the measurement date (generally the grant date) and recognized in the statement
of operations over the requisite service period. The Company recognized
nil
, $
1,024,361
and $
1,005,000
share-based compensation for the
years ended December 31, 2022, 2021 and 2020, respectively. See details in
NOTE 13
.
Per Share Data
ASC Topic 260 "Earnings
per Share," requires presentation of both basic and diluted earnings per share ("EPS") with a reconciliation of the
numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes
dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised
or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company.
F-
14
NOTE 3 –
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Basic net loss per common
share are computed by dividing net loss available to common shareholders by the weighted average number of shares of common stock outstanding
during the period. Diluted net loss per common share is computed by dividing net loss by the weighted average number of shares of common
stock, common stock equivalents and potentially dilutive securities outstanding during each period. Common stock equivalents are not
included in the calculation of diluted loss per common share if their effect would be anti-dilutive. The following table presents a reconciliation
of basic and diluted net loss per common share:
Year Ended
December 31,
2022
Year Ended
December 31,
2021
Year Ended
December 31,
2020
Net loss for basic and diluted net loss per share of common stock
$
(
5,645,376
)
$
(
7,050,755
)
$
(
3,181,596
)
Weighted average common stock outstanding – basic and diluted *
3,497,109
2,450,447
2,038,558
Net loss per common share - basic and diluted *
$
(
1.61
)
$
(
2.88
)
$
(
1.56
)
*
After giving effect to the reverse stock split effected on
July 13, 2022. Also see Note 13.
The Company did not
have any common stock equivalents and potentially dilutive common stock outstanding during the years ended December 31, 2022, 2021 and
2020.
Related Parties
Parties are considered
to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by,
or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of
the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if
one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting
parties might be prevented from fully pursuing its own separate interests. The Company discloses all significant related party transactions
in
NOTE 11
.
Fiscal Year End
The Company has adopted
a fiscal year end of December 31st.
Recent Accounting Pronouncements
In June 2016, the FASB issued ASU 2016-13, "Measurement
of Credit Losses on Financial Instruments (Topic 326)", and issued subsequent amendments to the initial guidance, transitional
guidance and other interpretive guidance between November 2018 and March 2020 within ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11,
ASU 2020-02 and ASU 2020-03. ASU 2016-13 introduces new guidance for credit losses on instruments within its scope, which significantly
changes the way entities recognize impairment of many financial assets by requiring immediate recognition of estimated credit losses
expected to occur over their remaining life, instead of when incurred. For smaller reporting companies, the guidance is effective for
fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. All entities may adopt this ASU
through a cumulative effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is
effective (that is, a modified-retrospective approach). The amendments in ASU 2016-13 and 2018-19 are effective for the Company for fiscal
years beginning after December 15, 2022, including interim periods within those fiscal years. As the Company is an "emerging growth
company" and elects to apply for the new and revised accounting standards at the effective date for a private company, the Company
adopted ASU No. 2016-13 on January 1, 2023 and the adoption did not have a material impact on the Company's consolidated financial
statements.
F-
15
NOTE 3 –
SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (continued)
In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion
and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40): Accounting
for Convertible Instruments and Contracts in an Entity's Own Equity ("ASU 2020-06"), which simplifies accounting for
convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions
that are required for equity-linked contracts to qualify for scope exception, and it simplifies the diluted earnings per share calculation
in certain areas. For public business entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including
interim periods within those fiscal years. The Company adopted ASU 2020-06 on January 1, 2022. The adoption did not have an impact on
the Company's consolidated financial statements.
NOTE 4 –
LOAN
RECEIVABLE, NET
Pursuant to the investment agreement dated as
of September 1, 2021, the Company has agreed to invest $
350,000
to acquire a
4.99
% interest in HuaMei Trading Management Limited ("HuaMei
Trading"), a Hong Kong corporation. HuaMei Trading acquired a wholly-owned subsidiary, Xiaosong Xiaoya (Chongqing) Technology Co.,
Ltd ("Xiaosong Xiaoya") on January 25, 2021. Xiaosong Xiaoya was incorporated in People's Republic of China ("PRC")
on January 25, 2021. HuaMei Trading is a financial technology company which provides data service. As the Company changed its investment
strategy and considered operation risks, on December 5, 2021, HuaMei Trading has agreed to return $
350,000
in full before December 5,
2022. The balance of $
350,000
was transferred into an interest-bearing loan. The term of the loan is December 5, 2021 to December 4,
2022, and the interest rate is
3.85
% per annum.
Pursuant to the loan
agreement dated November 5, 2021, the Company has agreed to loan $
200,000
to HuaMei Trading. The term of the loan is from November 12,
2021, to November 11, 2022, and the interest rate is
3.85
% per annum.
Considering that the
business conditions of HuaMei Trading were not as expected, the Company recorded an allowance for bad debts of $
550,000
to fully reserve
the loan to Huamei Trading during fiscal year ended December 31, 2021, which was included in "Other general and administrative
expenses" on the accompanying consolidated statements of operations and comprehensive loss.
In December 2021, the Company extended a loan to Cacti Fintec Limited
in an amount of $
2.1
million. The loan bears an interest rate of
3.78
% per annum with maturity date in December, 2022. In December 2022,
the loan is extended to December 2023 with a modified interest rate of
4.35
% per annum subsequently. In November 2022 and December 2022,
the Company extended additional two loans to Cacti Fintec Limited in the amount of $
1.3
million and $
250,000
, respectively. The loans
bear an interest rate of
4.35
% per annum with maturity dates in
November 2023
and
December 2023
, respectively. As of December 31, 2022,
the Company's total loan to Cacti Fintec Limited amounted to $
3,650,000
.
In February 2022, the
Company extended a loan to a third party company in an amount of $
100,000
. Considering the collection is not probable, the Company recorded
an allowance for bad debts of $
100,000
to fully reserve the loan to the third party company during fiscal year ended December 31, 2022,
which was included in "Other general and administrative expenses" on the accompanying consolidated statements of operations
and comprehensive loss.
In July 2022, the Company extended a loan to Yifan Sun, a third party,
in an amount of $
120,000
. The loan bears an interest rate of
3.85
% per annum with a maturity date in July 2023. Sun Yifan repaid $
75,000
during fiscal year ended December 31, 2022. The balance of the loan is $
45,000
as of December 31, 2022. The Company fully collected the
loan and interest as of reporting date.
In July 2022 and September
2022, the Company extended two loans to FLJ Group Limited (formerly known as "Q&K International Group Limited")
in the amount of $
500,000
and $
100,000
, respectively. The loans bear an interest rate of
3.85
% per annum with a maturity date in July
2023. As of December 31, 2022, the Company's total loan to FLJ Group Limited amounted to $
600,000
.
In September 2022, the
Company agreed to extend a loan to Yong Zhang, a third party, in an amount of RMB
1,650,000
(approximately $
237,000
). The loan bears an
interest rate of
3.65
% per annum with a maturity date in September 2023.
F-
16
NOTE 5 –
LOAN RECEIVABLE – RELATED PARTY
On January 1, 2020, the Company invested RMB
5.7
million
(approximately $
817,000
) to acquire a
35
% equity interest in Xtransfer. As Xtransfer failed to fulfill the restrictive terms prescribed
in the investment agreement, pursuant to the supplementary investment agreement dated October 31, 2020, Xtranfer has agreed to return
RMB
2.6
million (approximately $
399,000
) to the Company and reduce the Company's equity interest in Xtransfer to
19
%.
As of December 31, 2020, the Company has received RMB
2.0
million (approximately $
306,000
) from Xtransfer. The remaining RMB
0.6
million
(approximately $
93,000
) was transferred into non-interest-bearing loan and was recorded as "loan receivable - related party"
on the accompanying consolidated balance sheet as of December 31, 2020. The loan has been fully collected during the year ended December
31, 2021.
NOTE 6 –
PREPAID EXPENSES AND
OTHER CURRENT ASSETS
As of December 31, 2022 and 2021, prepaid
expenses and other current assets consisted of the following:
December 31,
December 31,
2022
2021
Prepaid professional service fees
$
8,927
$
111,200
Other receivables
103,204
30,546
Others
60,074
103,275
$
172,205
$
245,021
NOTE 7 –
PROPERTY AND EQUIPMENT,
NET
As of December 31, 2022
and 2021, property and equipment consisted of the following:
Useful life
December 31,
2022
December 31,
2021
Office equipment and furniture
3
-
5
Years
$
155,062
$
166,979
Leasehold improvement
The lesser of remaining lease term or
2
-
3
Years
84,549
92,358
Software
1
-
3
Years
11,917
13,018
Finance lease right-of-use asset
4
Years
152,859
165,242
404,387
437,597
Less: accumulated depreciation
(
219,964
)
(
170,164
)
$
184,423
$
267,433
For the years ended December 31, 2022, 2021 and
2020, depreciation expense amounted to $
66,428
, $
40,130
and $
54,576
, respectively, all of which were included in operating expenses.
The Company entered into a finance vehicle lease
in 2021 and the finance lease right-of-use asset with a net carrying amount of $
103,998
and $
161,111
as of December 31, 2022 and 2021,
respectively, were included in property and equipment, net. Finance lease liabilities were nil as of December 31, 2022 and 2021. The
Company made cash payments of $
163,301
for finance lease liabilities during the year ended December 31, 2021, which is included within
the financing activities section on the consolidated statements of cash flows.
F-
17
NOTE 8 –
LONG-TERM
INVESTMENTS
The Company's
long-term investments consist of equity investments without readily determinable fair value which were accounted for using measurement
alternative as of December 31, 2022 and 2021.
Equity Investment Using Measurement
Alternative
On July 1, 2019, the
Company invested RMB
1.0
million (approximately $
143,000
) to acquire a
4.9
% interest in Caishang Education Technology (Beijing) Co.,
Ltd ("Caishang"). Since the Company does not exercise significant influence over Caishang and Caishang does not have readily
determinable fair value as a privately held Company, the investment was accounted for using measurement alternative, in which the Company
record the investment at cost, less impairment, and plus or minus subsequent adjustments for observable price changes.
On January 1, 2020,
the Company invested RMB
5.7
million (approximately $
817,000
) to acquire a
35
% interest in Xtransfer. As Xtransfer failed to fulfill
the restrictive terms prescribed in the investment agreement, on October 31, 2020, Xtranfer has agreed to return RMB
2.6
million (approximately
$
399,000
) to the Company and reduce the Company's interest to
19
%. The investment was accounted for under the equity method prior
to the return of investment, and the carrying amount of the investment on October 31, 2020 was RMB
2.8
million (approximately $
425,000
).
Since the Company no longer has significant influence over Xtransfer after the return of investment and Xtransfer does not have readily
determinable fair value as a privately held Company, the remaining investment was accounted for using measurement alternative, in which
the initial basis of the investment is the carrying amount as of October 31, 2020 and subsequently adjusted for any impairment and observable
price changes.
The Company reviews its investments for impairment based on performance
and financial position of the investees as well as other evidence of market value. Such evaluation includes, but is not limited to, reviewing
the investee's cash position, recent financing, projected and historical financial performance, cash flow forecasts and financing
needs. The Company recorded impairment on long-term investments for an amount of RMB
3,776,275
(approximately $
585,000
) during the year
ended December 31, 2021. As a result, the carrying value of long-term investments was reduced to zero.
NOTE 9 –
ACCRUED LIABILITIES
AND OTHER PAYABLES
As of December 31, 2022 and 2021, accrued
liabilities and other payables consisted of the following:
December 31,
December 31,
2022
2021
Accrued professional service fees
$
121,139
$
105,186
Accrued technical service fees
25,845
188,215
Accrued FINRA fine *
125,550
-
Others
122,818
78,767
$
395,352
$
372,168
*
See Note 16.
NOTE 10 –
LOAN PAYABLE
On April 22, 2020, the
Company entered into a loan of $
41,250
pursuant to the Paycheck Protection Program of the Coronavirus Aid, Relief, and Economic Security
Act (the "CARES Act") as administered by the U.S. Small Business Administration (the "SBA"). The loan proceeds
will be used to cover payroll costs, rent, interest, and utilities. The Company believes it has met the requirements for
100
% forgiveness
on December 4, 2020. The PPP loan Forgiveness Application was approved by SBA on January 12, 2021 and the entire PPP Loan amount of $
41,250
as well as the interest of $
298
has been forgiven in full. There is no further action the Company needs to take. The Company did not have
loan payable balance as of December 31, 2022 and 2021.
F-
18
NOTE 11 –
RELATED PARTY
TRANSACTIONS
Loan Receivable – Related Party
As of December 31, 2022
and 2021, the Company did not have loan receivable balance from related party. See details in
NOTE 5
.
Due to Related Parties
As of December 31, 2022 and 2021, balances of
due to related parties were
nil
.
During fiscal year ended
December 31, 2020, Hinman Au, a director of the Company, paid $
4,000
expenses on behalf of the Company.
NOTE 12 –
INCOME
TAXES
British Virgin Islands
("BVI")
Under the current laws
of BVI, MMTEC and MMBD Trading is not subject to tax on income or capital gain. In addition, payments of dividends by the Company to
their shareholders are not subject to withholding tax in the BVI.
Hong Kong
Subsidiaries in Hong
Kong are subject to 16.5% income tax on their taxable income generated from operations in Hong Kong. The first HK$2 million
of profits arising in or derived from Hong Kong are taxed at 8.25% and any assessable profits over HK$2 million are taxed at 16.5%.
The
Company's subsidiaries, MM Future and MM Global Capital are incorporated in Hong Kong and had a loss for the years ended December
31, 2022, 2021 and 2020. Therefore, there was no provision for income taxes in the years ended December 31, 2022, 2021 and 2020.
Cayman Islands
There is no income tax
for companies domiciled in the Cayman Islands. Accordingly, MM Fund, MM Capital, Fundex SPC and MM SPC do not present any income tax
provisions related to Cayman Islands tax jurisdiction, where these four companies are domiciled.
United States
MM Global was incorporated
in the State of Illinois and operates as a securities broker/dealer in New York City. MMBD Advisory is formed as an investment advisor
firm under the laws of the State of New York. MM Global and MMBD Advisory are subject to Federal, State, and Local income taxes on
its net income. MM Global and MMBD Advisory had a net loss for the years ended December 31, 2022 and 2021. As a result, no provision for
income tax has been made in the years ended December 31, 2022 and 2021. MM Global and MMBD Advisory have determined that there are no
material uncertain tax positions that require recognition or disclosure in its financial statements.
MM Global and MMBD Advisory's
income tax returns are subject to examination by the appropriate tax jurisdictions. As of December 31, 2022, MM Global and MMBD Advisory's
federal and state tax returns generally remain open for the last three years.
PRC
Gujia was incorporated
in the PRC and are subject to PRC Enterprise Income Tax ("EIT") on the taxable income in accordance with the relevant PRC
income tax laws. On March 16, 2007, the National People's Congress enacted a new enterprise income tax law, which took effect on
January 1, 2008. The law applies a uniform
25
% enterprise income tax rate to both foreign invested enterprises and domestic enterprises.
In the years ended December 31, 2022, 2021 and 2020, Gujia were recognized as small low-profit enterprises and received a preferential
income tax rate of
5
%. In the years ended December 31, 2022, 2021 and 2020, Gujia did not generate any taxable income. Therefore, there
was no provision for income taxes in the years ended December 31, 2022, 2021 and 2020.
F-
19
NOTE 12 –
INCOME
TAXES (continued)
The reconciliations
of the statutory income tax rate and the Company's effective income tax rate are as follows:
For the
Year Ended
For the
Year Ended
For the
Year Ended
December 31,
2022
December 31,
2021
December 31,
2020
Hong Kong statutory income tax rate
16.5
%
16.5
%
16.5
%
Valuation allowance recognized with respect to the loss in the Hong Kong companies
(
16.5
)%
(
16.5
)%
(
16.5
)%
PRC statutory income tax rate
25.0
%
25.0
%
25.0
%
Effect of income tax exemptions and reliefs
(
20.0
)%
(
20.0
)%
(
20.0
)%
Valuation allowance recognized with respect to the loss in the PRC companies
(
5.0
)%
(
5.0
)%
(
5.0
)%
US corporate tax rate
21.0
%
21.0
%
21.0
%
Valuation allowance recognized with respect to the loss in the US companies
(
21.0
)%
(
21.0
)%
(
21.0
)%
Total
0.0
%
0.0
%
0.0
%
As of December 31, 2022, 2021 and 2020, the components
of the Company's deferred income tax assets were set forth below:
December 31,
2022
December 31,
2021
December 31,
2020
Deferred Tax Assets:
Net operating losses carry forward
$
1,194,054
$
859,455
$
645,345
Cutoff adjustments
44,395
47,704
-
Gross deferred tax assets
1,238,449
907,159
645,345
Less: valuation allowance
(
1,238,449
)
(
907,159
)
(
645,345
)
Net deferred tax assets
$
-
$
-
$
-
As of December 31, 2022, the Company has a net
operating loss ("NOL") carry forward for tax purposes of $
15,535,022
available to offset future taxable income. Most of the
NOLs from its subsidiaries as of December 31, 2022 will expire in years 2023 to 2027 if not utilized. The NOL from the MM Global and
MMBD Advisory as of December 31, 2022 will expire in years 2038 to 2042 if not utilized.
The Company provided
a valuation allowance equal to the deferred income tax asset for the years ended December 31, 2022, 2021 and 2020. The management believes
that the Company's cumulative losses arising from recurring business of subsidiaries constituted significant strong evidence that
most of the deferred tax assets would not be realizable and this evidence outweighed the expectations that the Company would generate
future taxable income. As such, deferred tax assets arise from net operating losses are fully allowed for the years ended December 31,
2022, 2021 and 2020. The increase in the allowance was $
331,290
, $
261,814
, and $
118,826
for the years ended December 31, 2022, 2021 and
2020, respectively.
Accounting for Uncertainty in Income Taxes
The tax authority of
the PRC government conducts periodic and ad hoc tax filing reviews on business enterprises operating in the PRC after those enterprises
complete their relevant tax filings. Therefore, the Company's PRC entities' tax filings results are subject to change. It
is therefore uncertain as to whether the PRC tax authority may take different views about the Company's PRC entities' tax
filings, which may lead to additional tax liabilities. Tax years that remain subject to examination are the years ended December 31,
2022, 2021 and 2020.
ASC 740 requires recognition
and measurement of uncertain income tax positions using a "more-likely-than-not" approach. The management evaluated the Company's
tax positions and concluded that no provision for uncertainty in income taxes was necessary as of December 31, 2022, 2021 and 2020.
F-
20
NOTE 13 –
SHAREHOLDERS'
EQUITY
Common Stock
The Company is authorized
to issue
5,000,000,000
shares of common stock with a par value of $
0.01
per share.
Pursuant to the service
agreement dated July 21, 2020, the Company issued
75,000
common shares (given effect of the Reverse Stock Split) to Tony Wayne Network
Technology Co., Limited as compensation of a Hong Kong and China based consulting program. The stock-based compensation of $
1,005,000
was recognized as part of the "professional fees" in the Company's consolidated statement of operations and comprehensive
loss.
On February 22, 2021,
the Company entered into a Securities Purchase Agreement with certain institutional investors in connection with a registered direct offering
of
430,000
(given effect of the Reverse Stock Split) of the Company's common shares, at a purchase price of $
37.0
per share (given
effect of the Reverse Stock Split). The Company sold the common shares for aggregate gross proceeds of $
15,910,000
. The net proceeds from
the transactions were $
14,637,200
, after deducting certain fees due to the placement agent and the Company's transaction expenses
and will be used for working capital and general corporate purposes.
Pursuant to the service agreement dated September
25, 2021, the Company issued
42,620
(given effect of the Reverse Stock Split) shares to Fortune Fintech Limited ("Fortune")
on December 28, 2021, as compensation of an investor relationship consulting program. The fair value of the shares on the grant date
was $
319,820
.
On December 20, 2021, the Company entered into
a Securities Purchase Agreement with a single investor pursuant to which the investor will make a $
2,000,000
investment in the Company
in a Regulation S private placement. Under the terms of the Purchase Agreement, the investor will purchase
500,000
common shares (given
effect of the Reverse Stock Split) of the Company at a purchase price of $
4.0
per share (given effect of the Reverse Stock Split). The
gross proceeds of the transaction were $
2.0
million before deducting fees and other expenses.
Pursuant to the restricted stock award agreement
dated December 17, 2021, the board issued
53,130
shares (given effect of the Reverse Stock Split) to employees as 2020 awards on December
31, 2021. The fair value of the shares on the grant date was $
475,514
.
Pursuant to the restricted stock award agreement
dated December 24, 2021, the board issued
29,250
shares (given effect of the Reverse Stock Split) to former employees on December 31,
2021. The fair value of the shares on the grant date was $
229,028
.
Effective on July 13, 2022, the Company has approved a reverse stock
split of the Company's authorized and issued and outstanding shares of common stock, par value $
0.001
per share, at a ratio of 10-for-1
(the "Reverse Stock Split"). As a result of the Reverse Stock Split, the Company's authorized shares of common stock
reduced from
500,000,000
shares to
50,000,000
shares, and the par value per share was increased from $
0.001
to $
0.01
. All share and per
share amount in the accompanying financial statement for the prior periods have been retroactively adjusted to reflect the Reverse Stock
Split.
On August 12, 2022, the Company entered into a common stock purchase
agreement with VG Master Fund SPC ("Investor"). Under the purchase agreement, subject to specified terms and conditions, the
Company may, from time to time during the term of the purchase agreement, sell to Investor up to the lesser of (a) $
5.5
million of shares
of common stock, par value $
0.01
per share, and (b) the maximum amount of securities the Company is permitted to issue under its existing
shelf registration statement, which was declared effective by the SEC on July 21, 2020. In consideration for entering into the purchase
agreement, the Company issued
53,334
shares of common stock to Investor as direct offering costs. The fair value of the shares on the
grant date was $
146,137
. The $
146,137
was capitalized and was subsequently reduced to $
112,748
which was included in "Deferred offering
cost" on the accompanying consolidated balance sheets. The Company sold
1,050,000
common shares for aggregate net proceeds of $
1,223,251
to the Investor after reduction of $
33,389
direct offering cost. The proceeds will be used for working capital and general corporate purposes.
On October 26, 2022, the Company adopted a resolution
to amend the Company's Memorandum and Articles of Association to increase the maximum number of shares that the Company is authorized
to issue from
50,000,000
to
5,000,000,000
.
F-
21
NOTE 13 –
SHAREHOLDERS'
EQUITY (continued)
On October 29, 2022, the Company entered into
a Securities Purchase Agreement (the "Agreement 1") with an investor. Pursuant to the Agreement 1, the Company agreed to sell
to this investor
400,000
shares of common stock at a purchase price of $
0.59
for a consideration of $
236,000
. The Company issued
400,000
shares to this purchaser on December 3, 2022 and received consideration on December 30, 2022.
On November 23, 2022, the Company entered into
a Securities Purchase Agreement (the "Agreement 2") with an investor. Pursuant to the Agreement 2, the Company agreed to sell
to this investor
500,000
shares of common stock at a purchase price of $
0.515
for a consideration of $
257,500
. The Company issued
500,000
shares to this purchaser on December 7, 2022 and received consideration on December 23, 2022.
Share-based compensation
On January 14, 2020, the 2019 Share Incentive Plan was approved by
the Company's shareholders at the Annual Meeting, the purpose of which is to provide an incentive for employees and consultant contributing
to the Company. The Company has Stock Option Plan with
200,000
shares (given effect of the Reverse Stock Split) authorized for issuance
under the Plan. The fair value of restricted share units granted with service conditions is estimated based on the fair market value of
the underlying ordinary shares of the Company on the date of grant.
Pursuant to the service agreement dated July 21,
2020, the Company issued
75,000
shares (given effect of the Reverse Stock Split) to Tony Wayne Network Technology Co., Limited ("Tony
Wayne") on July 30, 2020 as compensation of a Hong Kong and China based consulting program. The fair value of the shares on
the grant date was $
1,005,000
. The Company recognized the $
1,005,000
in full as stock-based compensation to nonemployee during the year
ended December 31, 2020.
Pursuant to the service agreement dated September
25, 2021, the Company issued
42,620
shares (given effect of the Reverse Stock Split) to Fortune Fintech Limited ("Fortune")
on December 28, 2021 as compensation of an investor relationship consulting program. The fair value of the shares on the grant date
was $
319,820
.
Subject to 2019 Share Incentive Plan, pursuant
to the restricted stock award agreement dated December 17, 2021, the board issued
53,130
shares (given effect of the Reverse Stock Split)
to employees as 2020 awards on December 31, 2021. The fair value of the shares on the grant date was $
475,514
. Pursuant to the restricted
stock award agreement dated December 24, 2021, the board issued
29,250
shares (given effect of the Reverse Stock Split) to former employees
on December 31, 2021. The fair value of the shares on the grant date was $
229,028
.
The Company recognized the fair value of the
shares $
1,024,361
as stock-based compensation to employee and nonemployee during the year ended December 31, 2021. As of the date of
this report, all the authorized shares under the 2019 Share Incentive Plan were issued.
On January 17, 2022, the 2021 Share Incentive Plan was approved by
the Company's shareholders at the Annual Meeting, the purpose of which is to provide an incentive for employees and consultant contributing
to the Company. The Company has Stock Option Plan with
300,000
shares (given effect of the Reverse Stock Split) authorized for issuance
under the Plan. The fair value of restricted share units granted with service conditions is estimated based on the fair market value of
the underlying ordinary shares of the Company on the date of grant. As of the date of this report, there were
300,000
shares (given
effect of the Reverse Stock Split) available for issuance under the 2021 Share Incentive Plan.
NOTE 14 -
STATUTORY
RESERVE
Gujia operate in the
PRC, are required to reserve
10
% of their net profit after income tax, as determined in accordance with the PRC accounting rules and
regulations. Appropriation to the statutory reserve by the Company is based on profit arrived at under PRC accounting standards for business
enterprises for each year. The profit arrived at must be set off against any accumulated losses sustained by the Company in prior years
before allocation is made to the statutory reserve. Appropriation to the statutory reserve must be made before distribution of dividends
to shareholders. The appropriation is required until the statutory reserve reaches
50
% of the registered capital. This statutory reserve
is not distributable in the form of cash dividends.
Gujia had sustained
losses since establishment. As of December 31, 2022, 2021 and 2020, no appropriation to statutory reserves was required as it incurred
recurring net losses.
F-
22
NOTE 15 –
COMMITMENTS
AND CONTINGENCIES
Operating Leases
The Company leases office
space under non-cancelable operating lease agreements, which end at various dates in 2024 and 2025.
As of December 31,
2022, the Company's operating leases had a weighted average remaining lease term of
4.41
years and a weighted
average discount rate of
4.37
%. Future lease payments under operating leases as of December 31, 2022 were as follows:
December 31, 2022
2023
$
463,187
2024
$
407,941
2025
$
258,094
Total future lease payments
$
1,129,222
Less imputed interest
$
(
75,648
)
Total lease liabilities
$
1,053,574
Less: current portion
$
(
405,591
)
Operating lease liability, non-current
$
647,983
Lease expense is recognized
on a straight-line basis over the lease term. For the year ended December 31, 2022, the Company had operating lease costs of $
373,022
and short-term lease costs of $
52,246
. For the year ended December 31, 2021, the Company had operating lease costs of $
385,126
and short-term
lease costs of $
27,490
. For the year ended December 31, 2020, the Company had operating lease costs of $
387,459
and short-term lease
costs of $
16,123
. Cash paid for amounts included in the measurement of operating lease liabilities were $
402,730
, $
396,569
and $
313,120
during the years ended December 31, 2022, 2021 and 2020, respectively.
NOTE 16 –
CONTINGENCIES
In the normal course of business, MM Global is engaged in various trading
and brokerage activities on a principal and agency basis through a clearing broker. As a regulated FINRA broker-dealer, MM Global is subject
to regulatory trading inquiries and investigations to determine whether any violations of federal securities or FINRA rules may have occurred.
During fiscal year ended December 31, 2022, FINRA's Department of Enforcement concluded its investigation and alleges that there
have been violations of the federal securities laws and FINRA rules. FINRA has issued the settlement for MMGS with a fine of $
450,000
to pay through
3
years, an installment plan fee of $
38,250
, and a prohibition from providing market access to customers for a period of
two years
. The settlement also prohibits MMGS from engaging in any business in which MMGS provides market access to customers unless and
until a registered principal or officer of MMGS certifies in writing to FINRA that the firm revised and enhanced its AML and supervisory
procedures related to detecting and investigating suspicious trading activity and potential market manipulation. During fiscal year ended
December 31, 2022, the Company had made payment in the amount of $
153,450
and as of December 31, 2022, the payable to FINRA was in the
amount of $
334,800
. The current portion of payable was included in "Accrued liabilities and other payables" on the accompanying
consolidated balance sheets and the non-current portion of payable was included in "Accrued liabilities, non-current" on the
accompanying consolidated balance sheets.
NOTE 17 -
CONCENTRATIONS
Customer
The following table sets forth information as
to each customer that accounted for
10%
or more of the Company's revenue for the years ended December 31, 2022, 2021 and 2020.
Customer
Year Ended December 31,
2022
Year Ended December 31,
2021
Year Ended
December 31,
2020
A
36.5
%
*
%
*
%
B
25.0
%
*
%
*
%
C
24.1
%
*
%
*
%
E
*
%
11.1
%
*
%
*
Less than 10%
F-
23
NOTE 18 –
SEGMENT
INFORMATION
The Company currently has two operating segments,
(i) Gujia, MM Future, HC Securities and MMBD Advisory provide market data services and fund management services, and (ii) MM Global operates
as an introducing broker that clears all transactions through a clearing broker dealer and earns commission income, placement agent services
fee and other related income from customers. Unallocated amounts that do not relate to an operating segment have been allocated to "Unallocated."
Since most of the Company's long-lived assets are located in the PRC, no geographical information on long-lived assets is presented.
Refer to Note 3 for disaggregated revenue information by geographical region attributed on the basis of the location where the revenue
is originated.
The following tables present summary information by segment:
Gujia, MM Future,
HC Securities and
MMBD Advisory
MM Global
Unallocated
Total
Year Ended December 31, 2022
REVENUE
$
722,450
$
376,683
$
-
$
1,099,133
GROSS PROFIT
$
567,949
$
300,100
$
-
$
868,049
NET LOSS
$
(
2,831,982
)
$
(
623,782
)
$
(
2,189,612
)
$
(
5,645,376
)
DEPRECIATION AND AMORTIZATION
$
66,428
$
-
$
-
$
66,428
CAPITAL EXPENDITURE
$
3,792
$
-
$
-
$
3,792
Year Ended December 31, 2021
REVENUE
$
260,678
$
392,358
$
-
$
653,036
GROSS PROFIT
$
119,376
$
392,358
$
-
$
511,734
NET LOSS
$
(
4,008,966
)
$
(
451,204
)
$
(
2,590,585
)
$
(
7,050,755
)
DEPRECIATION AND AMORTIZATION
$
40,130
$
-
$
-
$
40,130
CAPITAL EXPENDITURE
$
37,068
$
-
$
-
$
37,068
Year Ended December 31, 2020
REVENUE
$
94,637
$
647,488
$
-
$
742,125
GROSS PROFIT
$
87,232
$
647,488
$
-
$
734,720
NET INCOME (LOSS)
$
(
1,576,531
)
$
46,280
$
(
1,651,345
)
$
(
3,181,596
)
DEPRECIATION AND AMORTIZATION
$
54,576
$
-
$
-
$
54,576
CAPITAL EXPENDITURE
$
18,379
$
-
$
-
$
18,379
As of December 31, 2022
TOTAL ASSETS
$
8,910,311
$
719,651
$
1,785,545
$
11,415,507
As of December 31, 2021
TOTAL ASSETS
$
6,204,026
$
121,358
$
8,262,117
$
14,587,501
F-
24
NOTE 19 –
SUBSEQUENT
EVENTS
The
following subsequent events were evaluated on April 13, 2023, the date the financial statements were issued.
Except as set forth
below, there were no events that occurred subsequent to December 31, 2022 that require adjustment to or disclosure in the consolidated
financial statements.
On February 22, 2023,
the Company entered into a security purchase agreement to sell $
40,000,000
senior convertible promissory note with a non-U.S investor.
Pursuant to the agreement, the debt holder could convert any portion of the debt into ordinary shares of the Company at a higher price
of (a)
80
% of the lowest closing price of the last five trading days immediately prior the date of the conversion notice per share (b)
$
0.50
per share at any time after February 22, 2023. The purchase price of the note carries an original issue discount of
20
% of the principal
amount which is $
32,000,000
. The Company received the principal after 20% discount in full in $32,000,000 on February 23, 2023. The senior
convertible promissory note bears interest rate of
8
% with a maturity date on
February 21, 2025
.
On February 24, 2023,
the $40,000,000 senior convertible promissory note held by the non-U.S investor was converted in full into 80,000,000 ordinary shares,
at a conversion price of $0.5 per share.
On
March 31, 2023, the Company entered into a security purchase agreement to sell not more than $
70,000,000
senior convertible promissory
note with a non-U.S investor. Pursuant to the agreement, the debt holder could convert any portion of the debt into ordinary shares of
the Company at a higher price of (a)
75
% of the lowest closing price of the last five trading days immediately prior the date of the
conversion notice per share (b) $
0.30
per share at any time after March 31, 2023. The purchase price of the note carries an original
issue discount of
20
% of the principal amount which is not more than $
56,000,000
. The Company received the principal after 20% discount
in $56,000,000 on February 23, 2023. The senior convertible promissory note bears interest rate of
8
% with a maturity date on
March 30,
2025
.
F-
25