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

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

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

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

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

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<b>REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934</b></p><div>

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

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

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

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

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

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

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

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

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Date of event requiring this shell company report:</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>For the transition period from _________ to
_________.</b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Commission file number: <ix:nonNumeric contextRef="c0" name="dei:EntityFileNumber">001-39564</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"><b><span style="-sec-ix-hidden: hidden-fact-0">MingZhu Logistics Holdings Limited</span></b></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>Cayman Islands</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"><ix:nonNumeric contextRef="c0" name="dei:EntityAddressAddressLine1"><b>27F, Yantian Modern Industry Service Center</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:EntityAddressAddressLine2">No. 3018 Shayan Road</ix:nonNumeric>, <ix:nonNumeric contextRef="c0" name="dei:EntityAddressAddressLine3">Yantian District</ix:nonNumeric></b></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">Shenzhen</ix:nonNumeric>, Guangdong, <ix:nonNumeric contextRef="c0" format="ixt-sec:countrynameen" name="dei:EntityAddressCountry">China</ix:nonNumeric> <ix:nonNumeric contextRef="c1" name="dei:EntityAddressPostalZipCode"><ix:nonNumeric contextRef="c0" name="dei:EntityAddressPostalZipCode">518081</ix:nonNumeric></ix:nonNumeric></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(86) 755-25209839</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"><ix:nonNumeric contextRef="c1" name="dei:ContactPersonnelName"><b>Puglisi &amp; Associates</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:EntityAddressAddressLine1">850 Library Avenue</ix:nonNumeric>, <ix:nonNumeric contextRef="c1" name="dei:EntityAddressAddressLine2">Suite 204</ix:nonNumeric></b></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">Newark</ix:nonNumeric>, <ix:nonNumeric contextRef="c1" name="dei:EntityAddressStateOrProvince">DE</ix:nonNumeric></b></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:CityAreaCode">(302)</ix:nonNumeric> <ix:nonNumeric contextRef="c1" name="dei:LocalPhoneNumber">738-6680</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: justify">&#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-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: 32%; border-bottom: black 1.5pt solid; text-align: center">Title&#160;of&#160;each&#160;class</td> <td style="width: 2%; text-align: center">&#160;</td> <td style="width: 32%; border-bottom: black 1.5pt solid; text-align: center">Trading Symbol</td> <td style="width: 2%; text-align: center">&#160;</td> <td style="width: 32%; border-bottom: black 1.5pt solid; text-align: center">Name&#160;of&#160;each&#160;exchange&#160;on&#160;which&#160;registered</td></tr> <tr style="vertical-align: top; background-color: rgb(204,238,255)"> <td style="text-align: center"><ix:nonNumeric contextRef="c0" name="dei:Security12bTitle"><b>Ordinary&#160;shares,&#160;par&#160;value&#160;US$0.001&#160;per&#160;share</b></ix:nonNumeric></td> <td style="text-align: center">&#160;</td> <td style="text-align: center"><ix:nonNumeric contextRef="c0" name="dei:TradingSymbol"><b>YGMZ</b></ix:nonNumeric></td> <td style="text-align: center">&#160;</td> <td style="text-align: center"><b><ix:nonNumeric contextRef="c0" format="ixt-sec:exchnameen" name="dei:SecurityExchangeName">Nasdaq</ix:nonNumeric> Capital&#160;Market</b></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">Securities registered or to be registered pursuant
to Section 12(g) of the Act:</p><div>

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

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

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

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

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

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

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of May 16, 2023, there were <ix:nonFraction contextRef="c2" decimals="INF" format="ixt:num-dot-decimal" name="dei:EntityCommonStockSharesOutstanding" scale="0" unitRef="shares">22,960,277</ix:nonFraction>
ordinary shares, par value $0.001 per share, of the registrant issued and outstanding.</p><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act.</p><div>

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

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

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

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

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

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted 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: center"><ix:nonNumeric contextRef="c0" name="dei:EntityInteractiveDataCurrent">Yes</ix:nonNumeric>&#160;<span style="font-family: Times New Roman, Times, Serif">&#9746;</span>&#160;&#160;&#160;No&#160;<span style="font-family: Times New Roman, Times, Serif">&#9744;</span></p><div>

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

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

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

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: 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">&#8224;</td><td style="text-align: justify">The term &#8220;new or revised financial accounting standard&#8221;
refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.</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"><span>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&#160;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.&#160;&#160;&#160;&#160;<span style="font-family: Times New Roman, Times, Serif">&#9744;</span>&#160;&#160;Yes&#160;&#160;&#160;&#160;<ix:nonNumeric contextRef="c0" format="ixt:fixed-false" name="dei:IcfrAuditorAttestationFlag"><span style="font-family: Times New Roman, Times, Serif">&#9746;</span></ix:nonNumeric>&#160;&#160;No</span>&#160;</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. &#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'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-align: justify">&#160;</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">&#9746;</span>&#160;<span style="-sec-ix-hidden: hidden-fact-1">U.S.
GAAP</span>&#160;&#160;&#160;<span style="font-family: Times New Roman, Times, Serif">&#9744;</span> International Financial Reporting Standards
as issued by the International Accounting Standards Board <span style="font-family: Times New Roman, Times, Serif">&#9744;</span>&#160;&#160;&#160;Other
<span style="font-family: Times New Roman, Times, Serif">&#9744;</span></p><div>

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


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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>MINGZHU LOGISTICS HOLDINGS LIMITED</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>FORM 20-F ANNUAL REPORT</b></p><div>

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

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

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr>
    <td style="vertical-align: top; width: 8%; text-align: justify">&#160;</td>
    <td style="vertical-align: top; width: 81%; text-align: justify">&#160;</td>
    <td style="width: 1%">&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; width: 10%; border-bottom: black 1.5pt solid; text-align: center"><b>Page</b></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><a href="#a_001">PART I</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center"></td></tr>
  <tr>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">&#160;</td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; text-align: justify">Item 1.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_002">Identity of Directors, Senior Management and Advisers</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">4</td></tr>
  <tr>
    <td style="vertical-align: top; text-align: justify">Item 2.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_003">Offer Statistics and Expected Timetable</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">4</td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; text-align: justify">Item 3.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_004">Key Information</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">4</td></tr>
  <tr>
    <td style="vertical-align: top; text-align: justify">Item 4.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_005">Information on the Company</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">46</td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; text-align: justify">Item 4A.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_006">Unresolved Staff Comments</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">76</td></tr>
  <tr>
    <td style="vertical-align: top; text-align: justify">Item 5.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_007">Operating and Financial Review and Prospects</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">76</td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; text-align: justify">Item 6.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_008">Directors, Senior Management and Employees</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">95</td></tr>
  <tr>
    <td style="vertical-align: top; text-align: justify">Item 7.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_009">Major Shareholders and Related Party Transactions</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">100</td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; text-align: justify">Item 8.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_010">Financial Information</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">103</td></tr>
  <tr>
    <td style="vertical-align: top; text-align: justify">Item 9.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_011">The Offer and Listing</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">103</td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; text-align: justify">Item 10.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_012">Additional Information</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">104</td></tr>
  <tr>
    <td style="vertical-align: top; text-align: justify">Item 11.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_013">Quantitative and Qualitative Disclosures About Market Risk</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">119</td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; text-align: justify">Item 12.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_014">Description of Securities Other than Equity Securities</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">120</td></tr>
  <tr>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">&#160;</td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><a href="#a_015">PART II</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center"></td></tr>
  <tr>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">&#160;</td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; text-align: justify">Item 13.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_016">Defaults, Dividend Arrearages and Delinquencies</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">121</td></tr>
  <tr>
    <td style="vertical-align: top; text-align: justify">Item 14.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_017">Material Modifications to the Rights of Security Holders and Use of Proceeds</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">121</td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; text-align: justify">Item 15.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_018">Controls and Procedures</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">121</td></tr>
  <tr>
    <td style="vertical-align: top; text-align: justify">Item 16.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_019">Reserved</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">123</td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; text-align: justify">Item 16A.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_020">Audit Committee Financial Expert</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">123</td></tr>
  <tr>
    <td style="vertical-align: top; text-align: justify">Item 16B.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_021">Code of Ethics</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">123</td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; text-align: justify">Item 16C.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_022">Principal Accountant Fees and Services</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">124</td></tr>
  <tr>
    <td style="vertical-align: top; text-align: justify">Item 16D.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_023">Exemptions from the Listing Standards for Audit Committees</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">124</td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; text-align: justify">Item 16E.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_024">Purchases of Equity Securities by the Issuer and Affiliated Purchasers</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">124</td></tr>
  <tr>
    <td style="vertical-align: top; text-align: justify">Item 16F.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_025">Change in Registrant&#8217;s Certifying Accountant</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">125</td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; text-align: justify">Item 16G.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_026">Corporate Governance</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">125</td></tr>
  <tr>
    <td style="vertical-align: top; text-align: justify">Item 16H.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_027">Mine Safety Disclosure</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">125</td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; text-align: justify">Item 16I.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_028">Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">125</td></tr>
  <tr>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom">&#160;</td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><a href="#a_029">PART III</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center"></td></tr>
  <tr>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">&#160;</td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; text-align: justify">Item 17.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_030">Financial Statements</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">126</td></tr>
  <tr>
    <td style="vertical-align: top; text-align: justify">Item 18.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_031">Financial Statements</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">126</td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; text-align: justify">Item 19.</td>
    <td style="vertical-align: top; text-align: justify"><a href="#a_032">Exhibits</a></td>
    <td>&#160;</td>
    <td style="white-space: nowrap; vertical-align: bottom; text-align: center">126</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>


</div><!-- Field: Page; Sequence: 3; Options: NewSection; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: LowerRoman; Name: PageNo -->i<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#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: justify">&#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: 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 this annual report on Form
20-F, unless otherwise indicated, &#8220;we,&#8221; &#8220;us,&#8221; &#8220;our,&#8221; and the &#8220;Company&#8221; refer to MingZhu
Logistics Holdings Limited, a company organized in the Cayman Islands, and its predecessor entities.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Unless we indicate otherwise,
all information in this annual report reflects the following:</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">&#8220;China&#8221; or &#8220;PRC&#8221; refer to the People&#8217;s Republic of China, excluding, for the purpose of this annual report only, Taiwan, Hong Kong and Macau;</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%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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

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

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

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

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

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

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">&#8220;JOBS Act&#8221; refers to the Jumpstart Our Business Startups Act, enacted in April 2012;</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%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">&#8220;We,&#8221; &#8220;us,&#8221; &#8220;our company,&#8221; &#8220;the company,&#8221; &#8220;our,&#8221; or similar terms used in this annual report refer to <i>MingZhu Logistics Holdings Limited, a Cayman Islands exempted company</i>.</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%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">&#8220;MingZhu&#8221; refers to Shenzhen Yangang Mingzhu Freight Industry Co., Ltd., one of our operating subsidiaries in the PRC;</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%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">&#8220;MOFCOM&#8221; refers to China&#8217;s Ministry of Commerce;</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%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">&#8220;ordinary shares&#8221; refers to our ordinary shares par value US$0.001 per share;</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>


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    </div><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><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">&#9679;</td>
    <td style="text-align: justify">&#8220;PCAOB&#8221; refers to the Public Company Accounting Oversight Board of the United States;</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%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">&#8220;PFIC&#8221; refers to a passive foreign investment company;</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%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">&#8220;Registration Statement&#8221; refers to the registration statement we have filed with the SEC (as defined below) relating to this offering of which this annual report forms a part;</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%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">&#8220;RMB&#8221; or &#8220;Renminbi&#8221; refer to the legal currency of the People&#8217;s Republic of China;</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%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">&#8220;SAFE&#8221; refers to China&#8217;s State Administration of Foreign Exchange; </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: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">&#8220;SAT&#8221; refers to China&#8217;s State Administration of Taxation; </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: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">&#8220;SEC&#8221; refers to the United States Securities and Exchange Commission;</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: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">&#8220;Securities Act&#8221; refers to the Securities Act of 1933, as amended; and</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%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">&#8220;Unit&#8221; or &#8220;Units&#8221; refer to the 3,333,335 Units of securities of the Company that were sold on March 12, 2021, with each Unit consisting of (a) one ordinary share, par value US$0.001 per share and (b) one warrant to purchase 0.75 ordinary share at an exercise price equal to $6.60, exercisable for three years and six months after the issuance date and subject to certain adjustment and cashless exercise provisions as described herein.</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%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">&#8220;US$,&#8221;, &#8220;$&#8221;, &#8220;dollars&#8221;, &#8220;USD&#8221; or &#8220;U.S. dollars&#8221; refer to the legal currency of the United States.</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">We use U.S. dollars as the
reporting currency in our financial statements and in this annual report. Monetary assets and liabilities denominated in Renminbi are
translated into U.S. dollars at the rates of exchange as of the applicable balance sheet date. Equity accounts are translated at historical
exchange rates, and revenues, expenses, gains and losses are translated using the average rates for the applicable period. In other parts
of this annual report, any Renminbi denominated amounts are accompanied by the related translations. We make no representation that the
Renminbi or U.S. dollar amounts referred to in this annual report could have been or could be converted into U.S. dollars or Renminbi,
as the case may be, at any particular rate or at all. The PRC government restricts or prohibits the conversion of Renminbi into foreign
currency and foreign currency into Renminbi for certain types of transactions &#8212; overseas investments in areas including real estate,
hotels, cinemas, the entertainment industry, and sports clubs will be limited, while investments in some sectors such as gambling will
be banned.</p><div>

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


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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#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: justify">&#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 on Form
20-F contains forward-looking statements that reflect our current expectations and views of future events. Known and unknown risks, uncertainties
and other factors, including those listed under &#8220;3.D. Risk Factors&#8221;, may cause our actual results, performance or achievements
to be materially different from those expressed or implied by the forward-looking statements.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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">You can identify some of these
forward-looking statements by words or phrases such as &#8220;may,&#8221; &#8220;will,&#8221; &#8220;expect,&#8221; &#8220;anticipate,&#8221;
&#8220;aim,&#8221; &#8220;estimate,&#8221; &#8220;intend,&#8221; &#8220;plan,&#8221; &#8220;believe,&#8221; &#8220;is/are likely to,&#8221;
&#8220;potential,&#8221; &#8220;continue&#8221; or other similar expressions. We have based these forward-looking statements largely on
our current expectations and projections about future events that we believe may affect our financial condition, results of operations,
business strategy and financial needs. These forward-looking statements include statements relating to:</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">our goals and strategies;</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: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">our future business development, financial condition and results of operations;</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: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">the expected growth of the logistics industry, particularly, in China;</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: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">our expectations regarding demand for and market acceptance of our marketplace&#8217;s products and services;</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: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">our expectations regarding our platform&#8217;s base of borrowers and investors;</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: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">our plans to invest in our platform;</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: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">our relationships with our partners;</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: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">competition in our industry; and</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: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">relevant government policies and regulations relating to our industry.</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">These forward-looking statements
are subject to various and significant risks and uncertainties, including those which are beyond our control. Although we believe that
our expectations expressed in these forward-looking statements are reasonable, our expectations may later be found to be incorrect. The
forward-looking statements made in this annual report relate only to events or information as of the date on which the statements are
made in this annual report. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements,
whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the
occurrence of unanticipated events. You should thoroughly read this annual report and the documents that we refer to herein with the understanding
that our actual future results may be materially different from and worse than what we expect. We qualify all of our forward-looking statements
by these cautionary statements. We disclaim any obligation to update our forward-looking statements, except as required by law.</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 contains
certain data and information that we obtained from various government and private publications, including industry data and information
from Frost &amp; Sullivan. Statistical data in these publications also include projections based on a number of assumptions. The transportation
services market in China may not grow at the rate projected by market data, or at all. Failure of this industry to grow at the projected
rate may have a material adverse effect on our business and the market price of our ordinary shares.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, the new and rapidly
changing nature of the transportation industry results in significant uncertainties for any projections or estimates relating to the growth
prospects or future condition of our industry. Furthermore, if any one or more of the assumptions underlying the market data are later
found to be incorrect, actual results may differ from the projections based on these assumptions. You should not place undue reliance
on these forward-looking statements.</p><div>

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


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

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

</div><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; 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">Not Applicable.</p><div>

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

</div><div><a id="a_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; 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">Not Applicable.</p><div>

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

</div><div><a id="a_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; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>3.A. Reserved</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>3.B. Capitalization and Indebtedness</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">Not Applicable.</p><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>3.D. Risk Factors</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"><i>Investing in our securities
is highly speculative and involves a significant degree of risk. You should carefully consider the following risks, as well as other information
contained in this annual report, before making an investment in our company. The risks discussed below could materially and adversely
affect our business, prospects, financial condition, results of operations, cash flows, ability to pay dividends and the trading price
of our ordinary shares. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also
materially and adversely affect our business, prospects, financial condition, results of operations, cash flows and ability to pay dividends,
and you may lose all or part of your investment.</i></p><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9pt; text-indent: 24.5pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">The
following summary description sets forth an overview of the material risks we are exposed to in the normal course of our business activities.
The summary does not purport to be complete and is qualified in its entirety by reference to the full risk factor discussion immediately
following this summary description. We encourage you to read the full risk factor discussion carefully. Our business, results of operations
and financial condition could be materially and adversely affected by any of the following material risks:</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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    <td style="text-align: justify">We are a Cayman Islands holding company with no equity ownership in our VIEs and we conduct our operations in China through (i) our PRC subsidiaries and (ii) our VIEs with which we have maintained contractual arrangements.</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

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    <td style="text-align: justify">We rely on contractual arrangements with our VIE and its shareholders to exercise control over our business, which may not be as effective as direct ownership in providing operational control.</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

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    <td style="text-align: justify">Uncertainties exist with respect to the interpretation and implementation of the newly enacted Foreign Investment Law and how it may impact the viability of our current structure, our business, financial condition and results of operations.</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

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    <td style="text-align: justify">Our contractual arrangements are governed by PRC law. Accordingly, these contracts would be interpreted in accordance with PRC law, and any disputes would be resolved in accordance with PRC legal procedures, which may not protect you as much as those of other jurisdictions, such as the United States.</td></tr>
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    <td style="text-align: justify">In the event we are unable to enforce the contractual arrangements with VIEs, we may not be able to exert effective control over the VIEs. If the government of the PRC finds that VIE Agreements do not comply with PRC laws, we could be subject to significant penalties or be forced to relinquish our interests in those operations or we could be unbale to assert our contractual control rights over the VIEs.</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

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    <td style="text-align: justify">The PRC government has significant authority to regulate or intervene in the China operations of an offshore holding company, such as us, at any time. Therefore, investors in our ordinary shares and our business face potential uncertainty from the PRC government&#8217;s policy.</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="text-align: justify">Substantial uncertainties and restrictions with respect to the political and economic policies of the PRC government and PRC laws and regulations could have a significant impact upon the business the Company may be able to conduct in the PRC and accordingly on the results of its operations and financial condition.</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="text-align: justify">There are uncertainties under the PRC laws relating to the procedures and time requirement for the U.S. regulators to bring about investigations and evidence collection within the territory of the PRC.</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="text-align: justify">The failure to comply with PRC regulations relating to mergers and acquisitions of domestic enterprises by offshore special purpose vehicles may subject the Company to severe fines or penalties and create other regulatory uncertainties regarding the Company&#8217;s corporate structure.</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="text-align: justify">The Holding Foreign Companies Accountable Act, recent regulatory actions taken by the SEC and PCAOB, and proposed rule changes submitted by U.S. stock exchanges calling for additional and more stringent criteria to be applied to China-based public companies could add uncertainties to our capital raising activities and compliance costs.</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>


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

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    <td style="text-align: justify">Cyber-attacks, computer viruses, physical or electronic break-ins or other unauthorized access to our or our business partners&#8217; computer systems could result in misuse of confidential information and misappropriation of funds of our borrowers and investors, subject us to liabilities, cause reputational harm and adversely impact our results of operations and financial condition.</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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    <td style="text-align: justify">Our reliance on major customers and any loss of our major customers or changes in their demands for our services would likely have a material adverse effect on our business, results of operations, financial conditions and prospect.</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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    <td style="text-align: justify">We generate a significant portion of our revenue from transportation services of slack coal in Xinjiang. Our reliance on such services subjects us to risks resulting from any decline in the business performance of our customers in the slack coal industry and adverse events in the slack coal industry or in the Xinjiang region in general.</td></tr>
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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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td style="text-align: justify">Our cash flow position may deteriorate owing to the difference in timing between receipt of payments from our customers and payments to our suppliers and subcontractors if we are unable to such timing difference and its impact on our cash flow properly.</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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    <td style="width: 48px">&#160;</td>
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    <td style="text-align: justify">We rely on subcontractors to handle a proportion of our trucking services. Any delay or failure in their services would adversely affect our operations and financial results.</td></tr>
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</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="text-align: justify">Difficulty in obtaining material, equipment, goods and services from our vendors and suppliers could adversely affect our business.</td></tr>
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</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="text-align: justify">The trucking service market in the PRC is highly competitive and fragmented, which subjects us to competitive pressures pertaining to pricing, capacity and service.</td></tr>
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</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="text-align: justify">The trucking service market is affected by economic and business risks that are largely beyond our control.</td></tr>
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    <td style="text-align: justify">We may not be able to implement all or any of our business plans successfully.</td></tr>
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    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">Our business operations have been and may continue to be materially and adversely affected by the outbreak of the coronavirus disease (COVID-19).</td></tr>
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    <td style="text-align: justify">Our results of operations may fluctuate significantly and may not fully reflect the underlying performance of our business.</td></tr>
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    <td style="text-align: justify">We may need additional capital, and financing may not be available on terms acceptable to us, or at all.</td></tr>
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    <td style="text-align: justify">We will be subject to changing laws, rules and regulations in the U.S. regarding regulatory matters, corporate governance and public disclosure that will increase both our costs and the risks associated with non-compliance.</td></tr>
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    <td style="text-align: justify">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.</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

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    <td style="text-align: justify">We have identified material weaknesses in our internal accounting controls, and if we fail to implement and maintain an effective system of internal controls or fail to remediate the material weaknesses in our internal control over financial reporting that have been identified, we may be unable to accurately report our results of operations or prevent fraud or fail to meet our reporting obligations, and customer confidence and the market price of our ordinary shares may be materially and adversely affected.</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>


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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9pt; "><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 are a Cayman Islands holding company
with no equity ownership in our VIEs and we conduct our operations in China through (i) our PRC subsidiaries and (ii) our VIEs with which
we have maintained contractual arrangements.</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 are a Cayman Islands holding
company with no equity ownership in the VIEs and we conduct our operations in China through (i) our PRC subsidiaries and (ii) the VIEs
and their subsidiaries with which we have maintained contractual arrangements. Investors of our ordinary shares or the ADSs thus are not
purchasing equity interest in the VIEs and their subsidiaries in China but instead are purchasing equity interest in a Cayman Islands
holding company. If the PRC government deems that our contractual arrangements with the VIEs do not comply with PRC regulatory restrictions
on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change in the
future, we could be subject to severe penalties or be forced to relinquish our interests in those operations. Our holding company in the
Cayman Islands, the VIEs, and investors of our company face uncertainty about potential future actions by the PRC government that could
affect the validity and enforceability of the contractual arrangements with the VIEs and, consequently, significantly affect the financial
performance of the VIEs and our company as a group.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9pt; 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 rely on contractual
arrangements with our VIE and its shareholders to exercise control over our business, which may not be as effective as direct ownership
in providing operational control.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9pt; 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 have relied and expect
to continue to rely on contractual arrangements with VIEs, and their shareholders, to operate a portion of our business in China. These
contractual arrangements may not be as effective as direct ownership in providing us with control over the VIE. For example, the VIE and
its shareholders could breach their contractual arrangements with us by, among other things, failing to conduct their operations in an
acceptable manner or taking other actions that are detrimental to our interests. If we had direct ownership of the VIE, we would be able
to exercise our rights as a shareholder to effect changes in the board of directors of the VIE, which in turn could implement changes,
subject to any applicable fiduciary obligations, at the management and operational level. However, under the current contractual arrangements,
we rely on the performance by the VIE and its shareholders of their respective obligations under the contracts to exercise control over
the VIE. The shareholders of the VIE may not act in the best interests of our company or may not perform their obligations under these
contracts. Such risks exist throughout the period in which we intend to operate certain portion of our business through the contractual
arrangements with the VIE. If any dispute relating to these contracts remains unresolved, we will have to enforce our rights under these
contracts through arbitration, litigation or other legal proceedings and therefore will be subject to uncertainties in the PRC legal system.
Therefore, our contractual arrangements with the VIE may not be as effective in controlling our business operations as direct ownership.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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 exist
with respect to the interpretation and implementation of the newly enacted Foreign Investment Law and how it may impact the viability
of our current structure, 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; text-indent: 24.5pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the Regulations
for the Administration of Foreign-Invested Telecommunications Enterprises (the &#8220;FITE Regulations&#8221;) promulgated by the State
Council, foreign investors are not allowed to hold more than 50% of the equity interests of any company providing value-added telecommunications
services, or VATS, including Internet Content Provider (&#8220;ICP&#8221;) services. In addition, foreign-invested telecommunication enterprises
should meet the requirements as prescribed in the relevant regulations. We have to conduct our VATS business through the VIEs.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March&#160;15, 2019, the
Standing Committee of the National People&#8217;s Congress of the PRC passed the Foreign Investment Law of the People&#8217;s Republic
of China, or the Foreign Investment Law, which took effect on January&#160;1, 2020 and replaced three existing laws regulating foreign
investment in China, namely, the PRC Equity Joint Venture Law, the PRC Cooperative Joint Venture Law and the Wholly Foreign-owned Enterprise
Law, together with their implementation rules and ancillary regulations. Among other things, the Foreign Investment Law defines the &#8220;foreign
investment&#8221; as the investment activities in China conducted by foreign individuals, enterprises and other organizations, or collectively,
the Foreign Investors, in a direct or indirectly manner, including any of the following circumstances: (1)&#160;the foreign investor establishes
a foreign-invested enterprise within the territory of China, independently or jointly with any other investor; (2)&#160;the foreign investor
acquires shares, equities, property shares or any other similar rights and interests of an enterprise within the territory of China; (3)&#160;the
foreign investor makes investment to initiate a new project within the territory of China, independently or jointly with any other investor;
and (4)&#160;the foreign investor makes investment in any other way stipulated by laws, administrative regulations or provisions of the
State Council. The Foreign Investment Law leaves uncertainty with respect to whether Foreign Investors controlled PRC onshore variable
interest entities via contractual arrangements will be recognized as &#8220;foreign investment&#8221;. PRC governmental authorities will
administrate foreign investment by applying the principal of&#160;pre-entry&#160;national treatment together with a &#8220;negative list,&#8221;
or the Negative List, which shall be promulgated by or promulgated with approval by the State Counsel, to be specific, Foreign Investors
are prohibited from making any investments in the fields which are catalogued into prohibited industries for foreign investment based
on the Negative List, while Foreign Investors are allowed to make investments in the restricted industries provided that all the requirements
and conditions as set forth in the Negative List have been satisfied; when Foreign Investors make investments in the fields other than
those included in the Negative List, the national treatment principle shall apply. Besides, certain approval and/or filing requirements
shall be fulfilled in accordance with applicable foreign investment 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">If our control over the VIE
through contractual arrangements are deemed as foreign investment in the future, and any business of the VIE is restricted or prohibited
from foreign investment under the &#8220;negative list&#8221; effective at the time, we may be deemed to be in violation of the Foreign
Investment Law, the contractual arrangements that allow us to have control over the VIE may be deemed as invalid and illegal, and we may
be required to unwind such contractual arrangements and/or restructure our business operations, any of which may have a material adverse
effect on our business operation and consequently affecting our ability to prepare for and seek approval and commercialization of our
product candidates both in China and elsewhere.</p><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under applicable PRC laws
and regulations, arrangements and transactions among related parties may be subject to audit or challenge by the PRC tax authorities.
The Enterprise Income Tax Law requires every enterprise in China to submit its annual enterprise income tax return together with a report
on transactions with its related parties to the relevant tax authorities. The tax authorities may impose reasonable adjustments on taxation
if they have identified any related party transactions that are inconsistent with arm&#8217;s length principles. We may face material
and adverse tax consequences if the PRC tax authorities determine the contractual arrangements among the VIEs and its shareholders were
not entered into on an arm&#8217;s length basis in such a way as to result in an impermissible reduction in taxes under applicable PRC
laws, rules and regulations, and adjust the income of the VIEs in the form of a transfer pricing adjustment. A transfer pricing adjustment
could, among other things, result in a reduction of expense deductions recorded by the VIEs for PRC tax purposes, which could increase
our tax expenses. In addition, the PRC tax authorities may impose late payment fees and other penalties on the VIEs for the adjusted but
unpaid taxes according to the applicable regulations. Our financial position could be materially and adversely affected if the VIEs&#8217;
tax liabilities increase or if it is required to pay late payment fees and other penalties.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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 lose the
ability to use and enjoy assets held by the VIEs that are important to our business if the VIEs 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; text-indent: 24.5pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As part of our contractual
arrangements with the VIEs, the VIEs hold certain assets that are material to the operation of certain portion of our business, including
permits, domain names and certain of our intellectual property rights. If the VIEs are declared bankrupt and all or part of their assets
become subject to liens or rights of third-party creditors, we may be unable to continue some or all of our business activities, which
could materially and adversely affect our business, financial condition and results of operations. Under the contractual arrangements,
the VIEs may not, in any manner, sell, transfer, mortgage or dispose of its assets or legal or beneficial interests in the business without
our prior consent. If our consolidated affiliated entity undergoes a voluntary or involuntary liquidation proceeding, the independent
third-party creditors may claim rights to some or all of these assets, thereby hindering our ability to operate our business, which could
materially and adversely affect our business, financial condition and results of operations.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b><i>If the chops of
our PRC subsidiaries or VIEs are not kept safely, are stolen or are used by unauthorized persons or for unauthorized purposes, the corporate
governance of these entities could be severely and adversely compromised.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt; ">&#160;</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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 contractual
arrangements are governed by PRC law. Accordingly, these contracts would be interpreted in accordance with PRC law, and any disputes would
be resolved in accordance with PRC legal procedures, which may not protect you as much as those of other jurisdictions, such as the United
States.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">All the agreements under our
contractual arrangements with the VIEs and their equity owners are governed by PRC law and provide for the resolution of disputes through
arbitration in China. Accordingly, these contracts would be interpreted in accordance with PRC law and any disputes would be resolved
in accordance with PRC legal procedures. The legal system in the PRC is not as developed as in some other jurisdictions, such as the United
States. As a result, uncertainties in the PRC legal system could limit our ability to enforce these contractual arrangements. Meanwhile,
there are very few precedents and little formal guidance as to how contractual arrangements in the context of a VIE should be interpreted
or enforced under PRC law, and our contractual arrangements have not been tested in court. There remain significant uncertainties regarding
the ultimate outcome of such arbitration should legal action become necessary. In addition, under PRC law, rulings by arbitrators are
final, parties cannot appeal the arbitration results in courts, and if the losing parties fail to carry out the arbitration awards within
a prescribed time limit, the prevailing parties may only enforce the arbitration awards in PRC courts through arbitration award recognition
proceedings, which would require additional expenses and delay. In the event we are unable to enforce these contractual arrangements,
or if we suffer significant delay or other obstacles in the process of enforcing these contractual arrangements, we may not be able to
exert effective control over the VIEs, and our ability to conduct our business may be negatively affected.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>In the event we are unable to enforce the
contractual arrangements with VIEs, we may not be able to exert effective control over the VIEs. If the government of the PRC finds that
VIE Agreements do not comply with PRC laws, we could be subject to significant penalties or be forced to relinquish our interests in those
operations or we could be unbale to assert our contractual control rights over the VIEs.</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>&#160;</b></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 own any direct equity
interest in VIEs. Instead, we control and receive the economic benefits of VIEs&#8217; business operations through certain contractual
arrangements&#160;in lieu of direct equity ownership. A VIE is an entity that has either a total equity investment that is insufficient
to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics
of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation
to absorb the expected losses of the entity. We have the power to direct activities at VIEs that most significantly impact VIEs&#8217;
economic performance, and has the right to receive benefits from VIEs. As such, we exert control over VIEs and is the primary beneficiary
of the VIEs, for accounting purposes, based upon such contractual arrangements. All the agreements under our contractual arrangements
with&#160;the VIEs&#160;and their equity owners are governed by PRC law and provide for the resolution of disputes through arbitration
in China. Accordingly, these contracts would be interpreted in accordance with PRC law and any disputes would be resolved in accordance
with PRC legal procedures. As of the date hereof, the agreements governed by PRC law that serve as the basis for a VIE arrangement have
not been tested in a court of law. As a result, uncertainties in the PRC legal system could limit our ability to enforce these contractual
arrangements. Currently, there are very few precedents and little formal guidance as to how contractual arrangements in the context of
a VIE should be interpreted or enforced under PRC law. There remain significant uncertainties regarding the ultimate outcome of such arbitration
should legal action become necessary. In the event we are unable to enforce these contractual arrangements, or if we suffer significant
delay or other obstacles in the process of enforcing these contractual arrangements, we may not be able to exert effective control over&#160;the
VIEs. These uncertainties or an adverse outcome of an arbitration may adversely affect our operations.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If we or any of our VIEs are
found to be in violation of any existing or future local laws or regulations, the relevant regulatory authorities might have the discretion
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">
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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">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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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">&#160;</td>
    <td style="width: 24px">&#9679;</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">
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If the government of the PRC
finds that VIE Agreements, do not comply with PRC laws, or if these regulations or the interpretation of existing regulations change in
the future, we could be subject to significant penalties or be forced to relinquish our interests in those operations or we could be unbale
to assert our contractual control rights over the VIEs, which could cause the value of our common stock to depreciate significantly.</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>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>The PRC government
has significant authority to regulate or intervene in the China operations of an offshore holding company, such as us, at any time. Therefore,
investors in our ordinary shares and our business face potential uncertainty from the PRC government&#8217;s policy.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We conduct our operations
in China through our PRC subsidiaries and VIEs. Our operations in China are governed by PRC laws and regulations. The PRC government&#8217;s
significant oversight over our business operation could result in a material adverse change in our operations and the value of our ordinary
shares. The Chinese government may intervene or influence the operation of our operating entities and exercise significant oversight and
discretion over the conduct of their business and may intervene in or influence their operations at any time or may exert more control
over offerings conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in operations
and/or the value of our shares. Further, any actions by the Chinese government to exert more oversight and control over offerings that
are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to
offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.</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">On December 24, 2021, the
China Securities Regulatory Commission (the &#8220;CSRC&#8221;) issued the Administrative Provisions of the State Council Regarding the
Overseas Issuance and Listing of Securities by Domestic Enterprises (Draft for Comments) (the &#8220;Draft Administrative Provisions&#8221;)
and the Measures for the Overseas Issuance of Securities and Listing Record-Filings by Domestic Enterprises (Draft for Comments) (the
&#8220;Draft Filing Measures,&#8221; collectively with the Draft Administrative Provisions, the &#8220;Overseas Issuance and Listing Regulations
Drafts&#8221;), which are currently published for public comments only. According to the Overseas Issuance and Listing Regulations Drafts,
among other things, after making initial applications with overseas stock markets for initial public offerings or any offerings after
the initial public offering, all domestic companies shall file with the CSRC within three working days. The Overseas Issuance and Listing
Regulations Drafts further stipulate that a fine between RMB 1 million and RMB 10 million may be imposed if an applicant fails to fulfill
the filing requirements with the CSRC or conducts an overseas offering or listing in violation of the Overseas Issuance and Listing Regulations
Drafts, and in cases of severe violations, a parallel order to suspend relevant businesses or halt operations for rectification may be
issued, and relevant business permits or operational licenses revoked. The Overseas Issuance and Listing Regulations Drafts, if enacted,
may subject us to additional compliance requirements in the future, and though we believe that none of the situations that would significantly
limit our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline
or be worthless.&#160;</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Furthermore, the Ministry
of Commerce (&#8220;MOFCOM&#8221;) and the National Development and Reform Commission (&#8220;NDRC&#8221;) promulgated the Special Administrative
Measures for Access of Foreign Investment (2021 Edition), or the Negative List (2021), stipulates that if a domestic enterprise engaged
in business in the prohibited investment field issues shares abroad and is listed for trading, it shall be examined and approved by the
relevant competent authorities of the state. According to a press release issued by the NDRC in relation to the Negative List (2021),
the above provisions are only applicable to the direct overseas listing of domestic enterprises engaged in the prohibited investment field.
We believe our listing on Nasdaq does not constitute a direct overseas listing of domestic enterprises mentioned in the above press release
and therefore we are not subject to the examination and approval by the relevant competent authorities of the state in accordance with
the Negative List (2021). However, the above regulations and drafts for comments also indicate the intention of the Chinese government
to increase its regulation of offshore investment in company&#8217;s utilizing the VIE structure to participate in the prohibited investment
fields. If relevant governmental authority determines or new future rules provides that we are required to obtain the approval, we would
have to apply for such approval. There is no assurance that we will be able to obtain such approval in time or at all. If we fail to obtain
the approve as required or in a timely manner, the VIE arrangement may be deemed illegal and ordered to be cancelled by relevant government
authorities, and other administrative measures or penalties may be imposed on us, which could materially and adversely affect our business,
financial condition, results of operations and the value of our shares. Any failure of us to fully comply with new regulatory requirements
may significantly limit or completely hinder our ability to offer or continue to offer our shares, cause significant disruption to our
business operations, severely damage our reputation, materially and adversely affect our financial condition and results of operations
and cause our shares to significantly decline in value or become worthless.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The new, stricter regulations
or interpretations of existing regulations imposed by the central or local governments may require additional expenditures and efforts
on our part to ensure our compliance with such regulations or interpretations, and if relevant regulations are issued and become effective
in a short notice, we may not be able to take the required actions in a timely manner without allocating significant resource.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The Chinese economy differs from the economies
of most developed countries in many respects, including a higher level of government involvement, the ongoing development of a market-oriented
economy, a higher level of control over foreign exchange, and a less efficient allocation of resources.</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">While the PRC economy has
experienced significant growth since the late 1970s, growth has been uneven, both geographically and among various sectors of the economy.
The PRC government has implemented various measures to encourage economic growth and guide the allocation of resources. These measures
are intended to benefit the overall PRC economy, but may also have a negative effect on us. For example, our business, financial condition
and results of operations could be adversely affected by PRC government control over capital investments or changes in regulations that
are applicable to us. The PRC economy has been transitioning from a centrally planned economy to a more market-oriented economy. Although
the PRC government has implemented measures since the late 1970s that emphasize the utilization of market forces for economic reform,
the PRC government continues to play a significant role in regulating industry development by imposing industrial policies. The PRC government
also exercises significant control over China&#8217;s economic growth through the allocation of resources, controlling payment of foreign
currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b><i>Substantial uncertainties
and restrictions with respect to the political and economic policies of the PRC government and PRC laws and regulations could have a significant
impact upon the business the Company may be able to conduct in the PRC and accordingly on the results of its operations and financial
condition.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company&#8217;s business
operations may be adversely affected by the current and future political environment in the PRC. The Chinese government exerts substantial
influence and control over the manner in which the Company must conduct its business activities. The Company&#8217;s ability to operate
in China may be adversely affected by changes in Chinese laws and regulations. Under the current government leadership, the government
of the PRC has been pursuing economic reform policies that encourage private economic activities and greater economic decentralization.
However, the government of the PRC may not continue to pursue these policies, or may significantly alter these policies from time to time
without notice.</p><div>

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


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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#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 certain uncertainties
regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws and regulations governing
the Company&#8217;s business, or the enforcement and performance of the Company&#8217;s arrangements with clients. Only after 1979 did
the Chinese government begin to promulgate a comprehensive system of laws that regulate economic affairs in general, deal with economic
matters such as foreign investment, corporate organization and governance, commerce, taxation and trade, as well as encourage foreign
investment in China. Although the influence of the law has been increasing, China has not developed a fully integrated legal system and
recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China. Also, because these laws
and regulations are relatively new, and because of the limited volume of published cases and their lack of force as precedents, interpretation
and enforcement of these laws and regulations involve significant uncertainties. New laws and regulations that affect existing and proposed
future businesses may also be applied retroactively. In addition, there have been constant changes and amendments of laws and regulations
over the past 30 years in order to keep up with the rapidly changing society and economy in China. Because government agencies and courts
provide interpretations of laws and regulations and decide contractual disputes and issues, their inexperience in adjudicating new business
and new polices or regulations in certain less developed areas causes uncertainty and may affect the Company&#8217;s business. Consequently,
we cannot predict the future direction of Chinese legislative activities with respect to either businesses with foreign investment or
the effectiveness on enforcement of laws and regulations in China. The uncertainties, including new laws and regulations and changes of
existing laws, as well as judicial interpretation by inexperienced officials in the agencies and courts in certain areas, may cause possible
problems to foreign investors.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>There are uncertainties under the PRC laws
relating to the procedures and time requirement for the U.S. regulators to bring about investigations and evidence collection within the
territory of the PRC.</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 December 28, 2019, the
newly amended Securities Law of the PRC (the &#8220;PRC Securities Law&#8221;) was officially promulgated, which became effective on March
1, 2020. According to Article 177 of the PRC Securities Law (&#8220;Article 177&#8221;), the securities regulatory authority of the State
Council may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement
cross-border supervision and administration. Article 177 further provides that overseas securities regulatory authorities may not carry
out investigations and evidence collection directly within the territory of the PRC, and that no Chinese entity or individual is allowed
to provide any documents or materials related to securities business activities to overseas agencies without prior consent of the securities
regulatory authority of the State Council and the competent departments of the State Council. Moreover, the Civil Procedure Law of the
PRC, promulgated in 1991 and last amended in 2017, provides that except for the request for and provision of judicial assistance in accordance
with international treaties concluded or participated by the PRC, or via diplomatic channels, no foreign agency or individual may, without
the consent of the competent authorities of the PRC, carry out investigation or collect evidence within the territory of the PRC.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">It is our understanding that
(i) the Article 177 is applicable in the circumstances related to direct investigation or evidence collection conducted by overseas authorities
within the territory of the PRC (in such case, the foregoing activities are required to be conducted through collaboration with or by
obtaining prior consent of competent PRC authorities) and (ii) as of the date of this annual report, we are not aware of any implementing
rules or regulations which have been published regarding application of the Article 177.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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 principal business operation
is conducted in the PRC. In the event that the U.S. regulators carry out investigation on us and there is a need to conduct investigation
or collect evidence within the territory of the PRC, the U.S. regulators may not be able to carry out the investigation or evidence collection
directly in the PRC under the PRC laws. The U.S. regulators may consider cross-border cooperation with securities regulatory authority
of the PRC by way of judicial assistance, diplomatic channels or regulatory cooperation mechanism established with the securities regulatory
authority of the PRC. However, there is no assurance that the U.S. regulators could succeed in establishing such cross-border cooperation
in a specific case or could establish the cooperation in a timely manner.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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">Furthermore, as the Article
177 is relatively new and there is no implementing rules or regulations which have been published regarding application of the Article
177, it remains unclear how the law will be interpreted, implemented or applied by the Chinese Securities Regulatory Commission or other
relevant government authorities. As such, there are uncertainties as to the procedures and time requirement for the U.S. regulators to
bring about investigations and evidence collection within the territory of the PRC. If U.S. regulators are unable to conduct such investigations,
such U.S. regulators may determine to suspend and ultimately delist our ordinary shares from the Nasdaq Capital Market or choose to suspend
or de-register our SEC registration.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b><i>If any of our subsidiaries
fails to maintain the requisite registered capital, licenses and approvals required under PRC law, our business, financial condition and
results of operations may 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; ">&#160;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Numerous regulatory authorities
of the central PRC government, provincial and local authorities are empowered to issue and implement regulations governing various aspects
of the financial industry. Each of our subsidiaries may be required to obtain and maintain certain assets relevant to its business as
well as applicable licenses or approvals from different regulatory authorities in order to provide its current services. These registered
capitals, licenses and approvals will be essential to the operation of the Company&#8217;s business. If any of our subsidiaries fails
to obtain or maintain any of the required registered capital, licenses or approvals for its business, it may be subject to various penalties,
such as confiscation of illegal net revenue, fines and the discontinuation or restriction of its operations. Any such disruption in its
business operations 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; "><b><i>&#160;</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b><i>The failure to
comply with PRC regulations relating to mergers and acquisitions of domestic enterprises by offshore special purpose vehicles may subject
the Company to severe fines or penalties and create other regulatory uncertainties regarding the Company&#8217;s corporate structure.</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, the MOFCOM,
joined by the China Securities Regulatory Commission (&#8220;CSRC&#8221;), the State-owned Assets Supervision and Administration Commission
of the State Council, the State Administration of Taxation (&#8220;SAT&#8221;), the State Administration for Industry and Commerce (the
&#8220;SAIC&#8221;), and the State Administration of Foreign Exchange (&#8220;SAFE&#8221;), jointly promulgated regulations entitled the
Provisions Regarding Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the &#8220;M&amp;A Rules&#8221;), which took
effect as of September 8, 2006, and as amended on June 22, 2009. This regulation, among other things, has certain provisions that require
offshore companies formed for the purpose of acquiring PRC domestic companies and controlled directly or indirectly by PRC individuals
and companies which are the related parties with the PRC domestic companies, to obtain the approval of MOFCOM prior to engaging in such
acquisitions and to obtain the approval of the CSRC prior to publicly listing special purpose vehicles&#8217; securities on an overseas
stock market. On September 21, 2006, the CSRC published on its official website a notice specifying the documents and materials that are
required to be submitted for obtaining CSRC approval.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 22.5pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If prior CSRC approval for
overseas financings is required and not obtained, the Company may face severe regulatory actions or other sanctions from MOFCOM, the CSRC
or other PRC regulatory agencies. In such event, these regulatory agencies may impose fines or other penalties on the Company&#8217;s
operations in the PRC, limit the Company&#8217;s operating privileges in the PRC, delay or restrict the repatriation of the proceeds from
overseas financings into the PRC, restrict or prohibit payment or remittance of dividends to us or take other actions that could have
a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading
price of our ordinary shares. The CSRC or other PRC regulatory agencies may also take actions requiring us, or making it advisable for
us, to delay or cancel overseas financings, to restructure the Company&#8217;s corporate structure, or to seek regulatory approvals that
may be difficult or costly to obtain.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 22.5pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The M&amp;A Rules, along with
certain foreign exchange regulations discussed below, will be interpreted or implemented by the relevant government authorities in connection
with our future offshore financings or acquisitions, and we cannot predict how they will affect our acquisition strategy.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 22.5pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b><i>The M&amp;A Rules
and certain other PRC regulations establish complex procedures for some acquisitions of PRC companies by foreign investors, which could
make it more difficult for us to pursue growth through acquisitions in China.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The M&amp;A Rules and relevant
regulations and rules concerning mergers and acquisitions established additional procedures and requirements that could make merger and
acquisition activities by foreign investors more time-consuming and complex. The M&amp;A Rules require that MOFCOM be notified in advance
of any&#160;change-of-control&#160;transaction in which a foreign investor takes control of a PRC domestic enterprise, if (i)&#160;any
important industry is concerned, (ii)&#160;such transaction involves factors that have or may have an impact on the national economic
security; or (iii)&#160;such transaction will lead to a change in control of a domestic enterprise which holds a famous trademark or PRC
time-honored brand. The approval from MOFCOM shall be obtained in circumstances where overseas companies established or controlled by
PRC enterprises or residents acquire affiliated domestic companies.</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">The Anti-Monopoly Law promulgated
by the Standing Committee of the National People&#8217;s Congress, or NPC, which became effective in August 2008, requires that when a
concentration of undertakings occurs and reaches statutory thresholds, the undertakings concerned shall file a prior notification with
the anti-monopoly enforcement agency of the State Council. Without the clearance from such agency, no concentration of undertakings shall
be implemented and effected. Mergers, acquisitions or contractual arrangements that allow one market player to take control of or to exert
decisive impact on another market player must also be notified in advance to the anti-monopoly enforcement agency of the State Council,
when the threshold under the Provisions on Thresholds for Prior Notification of Concentrations of Undertakings, or the Prior Notification
Rules, issued by the State Council in August 2008 and amended in September 2018 is triggered. If such prior notification is not obtained,
the anti-monopoly enforcement agency may order the concentration to cease its operations, dispose of shares or assets, transfer the business
of the concentration within a time limit, take any other necessary measures to restore the situation as it was before the concentration,
and may impose administrative fines. We also have not implemented monopolistic behaviors including monopoly agreements, abuse of a dominant
position and concentration of undertakings that may have the effect to eliminate or restrict competition in the field of platform economy.
However, since we anticipate that long term success in China&#8217;s market will require consolidation of the many small participants
in that market, and our goal is to be one of the survivors of that consolidation, when it happens. Aggressive enforcement of new anti-monopoly
regulations could interfere with our ability to achieve that goal. As of the date of this report, we have not been involved in any investigations
on anti-monopoly initiated by the related governmental regulatory authorities, and we have not received any inquiry, notice, warning,
or sanction in such respect.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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 addition, the Implementing
Rules Concerning Security Review on the Mergers and Acquisitions by Foreign Investors of Domestic Enterprises, issued by the MOFCOM in
August 2011, specify that mergers and acquisitions by foreign investors involved in &#8220;an industry related to national security&#8221;
are subject to strict review by the MOFCOM, and prohibit any activities attempting to bypass such security review, including by structuring
the transaction through a proxy or contractual control arrangement. In the future, we may grow our business by acquiring complementary
businesses. Complying with the requirements of the abovementioned regulations and other relevant rules to complete such transactions could
be time-consuming, and any required approval processes, including obtaining approval from the MOFCOM or its local counterparts may delay
or inhibit our ability to complete such transactions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We cannot preclude the possibility
that the MOFCOM or other government agencies may publish explanations contrary to our understanding or broaden the scope of such security
reviews in the future, in which case our future acquisitions in the PRC, including those by way of entering into contractual control arrangements
with target entities, may be closely scrutinized or prohibited. Our ability to expand our business or maintain or expand our market share
through future acquisitions would as such be materially and adversely affected.</p><div>

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

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>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.</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 Regulations on Mergers and Acquisitions of
Domestic Companies by Foreign Investors (the &#8220;M&amp;A Rules&#8221;), adopted by six PRC regulatory agencies in 2006 and amended
in 2009, include, among other things, provisions that purport to require that an offshore special purpose vehicle, formed for the purpose
of an overseas listing of securities through acquisitions of PRC domestic enterprises or assets and controlled by PRC enterprises 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. On September 21, 2006, pursuant to the M&amp;A Rules and other PRC laws, the CSRC published on its official website relevant
guidance regarding its approval of the listing and trading of special purpose vehicles&#8217; securities on overseas stock exchanges,
including a list of application materials. However, substantial uncertainty remains regarding the scope and applicability of the M&amp;A
Rules to offshore special purpose vehicles. If the CSRC approval is required for any of our future offering of securities overseas or
to maintain our offshore listing status on U.S. exchanges, 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, may subject us to sanctions imposed by the CSRC or other
PRC regulatory authorities, which 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. These opinions and any related
implementation rules to be enacted may subject us to additional compliance requirement in the future. As these opinions were recently
issued, official guidance to act upon and the interpretation thereof remain unclear at this time. We cannot assure that we will remain
fully compliant with all new regulatory requirements of these opinions or any future implementation rules on a timely basis, or at all.</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">On February 17, 2023, the CSRC issued the Trial
Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the &#8220;Trial Administrative Measures&#8221;)
and relevant supporting guidelines (together with the Trial Administrative Measures, the &#8220;New Administrative Rules Regarding Overseas
Listings&#8221;), which came into effective on March 31, 2023. According to the New Administrative Rules Regarding Overseas Listings,
a company based in the mainland of China that seeks to offer and list securities in overseas markets should fulfill the filing procedure
with the CSRC as per requirement of the Trial Administrative Measures. In particular, where a domestic company seeks to indirectly offer
and list securities in overseas markets, the issuer should designate a major domestic operating entity as the domestic responsible entity
to file with the CSRC. Initial public offerings or listings in overseas markets should be filed with the CSRC within 3 working days after
the relevant application is submitted overseas. Subsequent securities offerings of an issuer in the same overseas market where it has
previously offered and listed securities should be filed with the CSRC within 3 working days after the offering is completed. The required
filing materials with the CSRC include (without limitation) record-filing reports and related undertakings and PRC legal opinions issued
by domestic law firms (with related undertakings), in which the VIE structure (if applicable) and reasons and risk factor thereof is required
to be clarified in details. In addition, under the New Administrative Rules Regarding Overseas Listings, a domestic company is prohibited
from overseas offering and listing if any of the following circumstances is involved: (1) where such securities offering and listing is
explicitly prohibited by provisions in laws, administrative regulations and relevant state rules; (2) where the intended securities offering
and listing may endanger national security as reviewed and determined by competent authorities under the State Council in accordance with
law; (3) where the domestic company intending to make the securities offering and listing, or its controlling shareholders and the actual
controller, have committed crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining the order of
the socialist market economy during the latest three years; (4) where the domestic company intending to make the securities offering and
listing is suspected of committing crimes or major violations of laws and regulations, and is under investigation according to law, and
no conclusion has yet been made thereof; and (5) where there are material ownership disputes over equity held by the domestic company&#8217;s
controlling shareholder or by other shareholders that are controlled by the controlling shareholder and/or actual controller. Moreover,
a domestic company that seeks to offer and list securities in overseas markets should abide by certain other regulatory requirements as
set out in the New Administrative Rules Regarding Overseas Listings, including without limitation to, compliance with national secrecy,
foreign investment, cybersecurity, data security, cross-border investment and financing, foreign exchange, and other laws and relevant
provisions. Based on the New Administrative Rules Regarding Overseas Listings, we will be subject to additional filing requirements in
connection with this offering and our follow-up offerings completed after such effective date, and we cannot assure you that we will be
able to get the clearance of filing procedures under the New Administrative Rules Regarding Overseas Listings on a timely basis, or at
all. Any failure of us to fully comply with new regulatory requirements will result in rectification, warnings and fines on our subsidiaries
or VIEs, and may significantly limit or completely hinder our ability to continue to offer our securities, cause significant disruption
to our business operations, and severely damage our reputation, which would materially and adversely affect our consolidated financial
condition and results of operations and cause our securities to significantly decline in value 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; text-indent: 0.5in">On December 27, 2021, the NDRC and MOFCOM jointly
issued the Negative List (2021 Version), which became effective on January 1, 2022. Pursuant to the Negative List (2021 Version), if a
PRC company engaging in the prohibited business stipulated in the Negative List (2021 Version) seeks an overseas offering and listing,
it shall obtain the approval from the competent governmental authorities. The foreign investors of the issuer shall not be involved in
the company&#8217;s operation and management, and their shareholding percentages shall be subject, mutatis mutandis, to the relevant regulations
on the domestic securities investments by foreign investors. As the 2021 Negative List is relatively new, there remain substantial uncertainties
as to the interpretation and implementation of these new requirements, and it is unclear as to whether and to what extent listed companies
like us will be subject to these new requirements. If we are required to comply with these requirements and fail to do so on a timely
basis, if at all, our business operation, financial condition and business prospect may be adversely and materially affected.</p><div>

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




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

</div><p style="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 annual data security review under the Administrative Measures for Internet Data Security (Draft for Comments),
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, may subject us to sanctions by the CSRC or other PRC regulatory authorities, which could materially and adversely affect our business,
results of operations, financial condition 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.</p><div>

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

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

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b><i>You may experience
difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions against us or our management,
in China, based upon United States laws, including the U.S. federal securities laws, or other foreign laws.</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 are a company organized
under the laws of the Cayman Islands. Substantially all of our operations are conducted in China, and substantially all of our assets
are located in China. None of our subsidiaries is organized under the laws of the United States. All of our directors and officers reside
in China, and substantially all of the assets of those persons are located outside of the United States. As a result, it may be difficult
for a shareholder to effect service of process within the United States upon these persons, or to enforce judgments against us which are
obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United
States or any state in the United States. Furthermore, the recognition and enforcement of foreign judgments are provided for under the
PRC Civil Procedures Law. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil
Procedures Law based either on treaties between China and the country where the judgment is made or on principles of reciprocity between
jurisdictions. China does not have any treaties or other form of reciprocity with the United States providing for the reciprocal recognition
and enforcement of foreign judgments. In addition, according to the PRC Civil Procedures Law, courts in the PRC will not enforce a foreign
judgment against us or our directors or officers if they decide that the judgment violates the basic principles of PRC laws, national
sovereignty, security or public interest. As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment
rendered by a court in the United States. Lastly, in the event shareholders originate an action against a company without domicile in
China for disputes related to contracts or other property interests, the PRC courts may accept a cause of action if (a) the disputed contract
is concluded or performed in the PRC or the disputed subject matter is located in the PRC, (b) the company (as defendant) has properties
that can be seized within the PRC, (c) the company has a representative organization within the PRC, or (d) the parties chose to submit
to the jurisdiction of the PRC courts in the contract on the condition that such submission does not violate the requirements of jurisdiction
under the PRC Civil Procedures Law. The action may be initiated by the shareholder by filing a complaint with the PRC courts. The PRC
courts would determine whether to accept the complaint in accordance with the PRC Civil Procedures Law. The shareholder may participate
in the action by itself or entrust any other person or PRC legal counsel to participate on behalf of such shareholder. Foreign citizens
and companies will have the same rights as PRC citizens and companies in such an action unless such foreign country restricts the rights
of PRC citizens and companies.</p><div>

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




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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b><i>We and our shareholders
face uncertainties with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February 3, 2015, the State
Administration of Taxation issued an Announcement on Several Issues Concerning Enterprise Income Tax on Income Arising from Indirect Transfers
of Property by Non-PRC Resident Enterprises, or Announcement 7, with the same effective date. Under Announcement 7, an &#8220;indirect
transfer&#8221; refers to a transaction where a non-resident enterprise transfers its equity interest and other similar interest in an
offshore holding company, which directly or indirectly holds Chinese taxable assets (the assets of an &#8220;establishment or place&#8221;
situated in China; real property situated in China and equity interest in Chinese resident enterprises) and any indirect transfer without
reasonable commercial purposes are subject to the PRC taxation. In addition, Announcement 7 specifies the conditions under which an indirect
transfer is deemed to lack a reasonable commercial purpose which include: (1) 75% or more of the value of the offshore holding company&#8217;s
equity is derived from Chinese taxable assets, (2)&#160;anytime in the year prior to the occurrence of the indirect transfer of Chinese
taxable assets, 90% or more of the total assets (excluding cash) of the offshore holding company are direct or indirect investment in
China, or 90% or more of the revenue of the offshore holding company was sourced from China; (3) the functions performed and risks assumed
by the offshore holding company(ies), although incorporated in an offshore jurisdiction to conform to the corporate law requirements there,
are insufficient to substantiate their corporate existence and (4) the foreign income tax payable in respect of the indirect transfer
is lower than the Chinese tax which would otherwise be payable in respect of the direct transfer if such transfer were treated as a direct
transfer. As a result, gains derived from such indirect transfer will be subject to PRC enterprise income tax, currently at a rate of
10%.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 22.5pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Announcement 7 grants a safe
harbor under certain qualifying circumstances, including transfers in the public securities market and certain intragroup restricting
transactions, however, there is uncertainty as to the implementation of Announcement 7. For example, Announcement 7 requires the buyer
to withhold the applicable taxes without specifying how to obtain the information necessary to calculate taxes and when the applicable
tax shall be submitted. Announcement 7 may be determined by the tax authorities to be applicable to our offshore restructuring transactions
or sale of the shares of our offshore subsidiaries where non-resident enterprises, being the transferors, were involved. Though Announcement
7 does not impose a mandatory obligation of filing the report of taxable events, the transferring party shall be subject to PRC withholding
tax if the certain tax filing conditions are met. Non-filing may result in an administrative penalty varying from 50% to 300% of unpaid
taxes. As a result, we and our non-resident enterprises in such transactions may become at risk of being subject to taxation under Announcement
7, and may be required to expend valuable resources to comply with Announcement 7 or to establish that we and our non-resident enterprises
should not be taxed under Announcement 7, for any restructuring or disposal of shares of our offshore subsidiaries, which may have a material
adverse effect on our financial condition and results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 22.5pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b><i>PRC laws and regulations
have established more complex procedures for certain acquisitions of Chinese companies by foreign investors, which could make it more
difficult for the Company to pursue growth through acquisitions in China.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Further to the Regulations
on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the New M&amp;A Rules, the Anti-monopoly Law of the PRC,
the Rules of Ministry of Commerce on Implementation of Security Review System of Mergers and Acquisitions of Domestic Enterprises by Foreign
Investors promulgated by MOFCOM or the MOFCOM Security Review Rules, was issued in August 2011, which established additional procedures
and requirements that are expected to make merger and acquisition activities in China by foreign investors more time-consuming and complex,
including requirements in some instances that MOFCOM be notified in advance of any change of control transaction in which a foreign investor
takes control of a PRC enterprise, or that the approval from MOFCOM be obtained in circumstances where overseas companies established
or controlled by PRC enterprises or residents acquire affiliated domestic companies. PRC laws and regulations also require certain merger
and acquisition transactions to be subject to merger control review and or security review.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27pt; "></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The MOFCOM Security Review
Rules, effective from September 1, 2011, which implement the Notice of the General Office of the State Council on Establishing the Security
Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors promulgated on February 3, 2011, further provide
that, when deciding whether a specific merger or acquisition of a domestic enterprise by foreign investors is subject to the security
review by MOFCOM, the principle of substance over form should be applied and foreign investors are prohibited from bypassing the security
review requirement by structuring transactions through proxies, trusts, indirect investments, leases, loans, control through agreements
control or offshore transactions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Further, if the business of
any target company that the Company seeks to acquire falls into the scope of security review, the Company may not be able to successfully
acquire such company either by equity or asset acquisition, capital contribution or through any VIE Agreement. The Company may grow its
business in part by acquiring other companies operating in its industry. Complying with the requirements of the relevant regulations to
complete such transactions could be time consuming, and any required approval processes, including approval from MOFCOM, may delay or
inhibit its ability to complete such transactions, which could affect its ability to maintain or expand its market share.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27pt; "></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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, SAFE promulgated
the Circular on the Settlement of Foreign Currency Capital of Foreign-invested Enterprises, or Circular 19, on June 1, 2015. Under Circular
19 (partly modified by Huifa No.39 [2019]), registered capital of a foreign-invested company settled in RMB converted from foreign currencies
may only be used within the business scope approved by the applicable governmental authority and the equity investments in the PRC made
by the foreign-invested company shall be subject to the relevant laws and regulations about the foreign-invested company&#8217;s reinvestment
in the PRC. In addition, foreign-invested companies cannot use such capital to make the investments on securities, and cannot use such
capital to issue the entrusted RMB loans (except approved in its business scope), repay the RMB loans between the enterprises and the
ones which have been transferred to the third party. Circular 19 may significantly limit our ability to effectively use the proceeds from
future financing activities as the Chinese subsidiaries may not convert the funds received from us in foreign currencies into RMB, which
may adversely affect their liquidity and our ability to fund and expand our business in the PRC.</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>Governmental control
of currency conversion may affect the value of your investment.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Currently, the RMB cannot
be freely converted into any foreign currency. The PRC government imposes controls on the convertibility of RMB into foreign currencies
and, in certain cases, the remittance of currency out of China. Shortages in the availability of foreign currency may restrict the ability
of our PRC subsidiary to remit sufficient foreign currency to pay dividends or other payments to us, or otherwise satisfy their foreign
currency dominated obligations. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions,
interest payments and expenditures from trade-related transactions, can be made in foreign currencies without prior approval from the
PRC State Administration of Foreign Exchange, or SAFE, by complying with certain procedural requirements. However, for most capital account
items, approval from or registration with appropriate government authorities is required where RMB is to be converted into foreign currency
and remitted out of China to pay capital expenses such as the repayment of bank loans denominated in foreign currencies. The PRC government
may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange
control system prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends
in foreign currencies to our shareholders, including holders of the ordinary shares.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b><i>The U.S. law and
regulations, including the Holding Foreign Companies Accountable Act, call for additional and more stringent criteria to be applied to
emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by
the PCAOB. These developments could add uncertainties to our capital raising activities and compliance costs. </i></b></p><div>

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

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; ">On April 21, 2020, SEC
Chairman Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting
the risks associated with investing in companies based in or have substantial operations in emerging markets including China. The joint
statement emphasized the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers in China and higher
risks of fraud in emerging markets.</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in; ">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; ">On May 18, 2020, NYSE
American filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating in &#8220;Restrictive
Market&#8221;, (ii) adopt a new requirement relating to the qualification of management or board of director for Restrictive Market companies,
and (iii) apply additional and more stringent criteria to an applicant or listed company based on the qualifications of the company&#8217;s
auditors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; ">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; ">On May 20, 2020, the U.S.
Senate passed the Holding Foreign Companies Accountable Act requiring a foreign company to certify it is not owned or controlled by a
foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to PCAOB inspection.
If the PCAOB is unable to inspect the Company&#8217;s auditors for three consecutive years, the issuer&#8217;s securities are prohibited
to trade on a U.S. stock exchange. On December 2, 2020, the U.S. House of Representatives approved the Holding Foreign Companies Accountable
Act. On December 18, 2020, the Holding Foreign Companies Accountable Act was signed into law.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "></p><div>




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

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; ">On March 24, 2021, the
SEC announced that it had adopted interim final amendments to implement congressionally mandated submission and disclosure requirements
of the Act.&#160;The interim final amendments will apply to registrants that the SEC identifies as having filed an annual report on Forms
10-K, 20-F, 40-F or N-CSR with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction
and that the PCAOB has determined it is unable to inspect or investigate completely because of a position taken by an authority in that
jurisdiction. The SEC will implement a process for identifying such a registrant and any such identified registrant will be required to
submit documentation to the SEC establishing that it is not owned or controlled by a governmental entity in that foreign jurisdiction
and will also require disclosure in the registrant&#8217;s annual report regarding the audit arrangements of, and governmental influence
on, such a registrant.</p><div>

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

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; ">On June 22, 2021, the
U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, or the AHFCAA, which <span>was
enacted on December 29, 2022 under the&#160;Consolidated&#160;Appropriations&#160;Act,&#160;2023, and amended </span>the HFCAA to decrease
the number of non-inspection years under the HFCAA from three years to two, thus reducing the time period before an issuer&#8217;s securities
may be prohibited from trading on any U.S. securities exchange or any U.S. over-the-counter market or delisted.</p><div>

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

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; ">On December 2, 2021, the
SEC adopted amendments to finalize the rules implementing the submission and disclosure requirements of the HFCAA. The rules will 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 the PCAOB is unable to inspect or investigation such registered public accounting
firm, such SEC identified registrants are referred to as Commission-Identified Issuers. The final amendments require that Commission-Identified
Issuers submit documentation to the SEC establishing, among other things, that, if true, it is not owned or controlled by a governmental
entity in the public accounting firm&#8217;s foreign jurisdiction and if the Commission-Identified Issuer is a &#8220;foreign issuer,&#8221;
as defined in Exchange Act Rule 3b-4, to provide certain additional disclosures in its annual report.</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 December 16, 2021,
the PCAOB issued a HFCAA Determination Report, pursuant to 15 U.S.C. Section 7214(i)(2)(A) and PCAOB Rule 6100 (the &#8220;Report&#8221;).
Pursuant to the Report, the PCAOB notified the U.S. Securities and Exchange Commission that it issued two determinations that (1) the
PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in mainland China of the PRC because
of a position taken by one or more authorities in mainland China (the &#8220;Mainland China Determination&#8221;) and (2) the PCAOB is
unable to inspect or investigate completely registered public accounting firms headquartered in Hong Kong, a Special Administrative Region
of the PRC, because of a position taken by one or more authorities in Hong Kong (the &#8220;Hong Kong Determination&#8221;). In its two
appendixes the Report identifies the auditors that are subject to the Mainland China Determination and the Hong Kong Determination.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; ">The
lack of access to the PCAOB inspection in China prevents the PCAOB from fully evaluating audits and quality control procedures of the
auditors based in China. As a result, the investors may be deprived of the benefits of such PCAOB inspections. The inability of the PCAOB
to conduct inspections of auditors in China makes it more difficult to evaluate the effectiveness of these accounting firms&#8217; audit
procedures or quality control procedures as compared to auditors outside of China that are subject to the PCAOB inspections, which could
cause existing and potential investors in our share to lose confidence in our audit procedures and reported financial information and
the quality of our financial statements.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; "></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; ">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; ">On August 26, 2022, the&#160;PCAOB&#160;announced
that it had signed a Statement of Protocol (the &#8220;SOP&#8221;) with the China Securities Regulatory Commission and the Ministry of
Finance of China. The SOP,&#160;together with two protocol agreements governing inspections and investigations (together, the &#8220;SOP
Agreement&#8221;), establishes a specific, accountable framework to make possible complete inspections and investigations by the&#160;PCAOB&#160;of
audit firms based in mainland China and Hong Kong, as required under U.S. law. &#160;The SOP Agreement remains unpublished and is subject
to further explanation and implementation.&#160;Pursuant to the fact sheet with respect to the SOP Agreement disclosed by the SEC, the
PCAOB shall have sole discretion to select any audit firms for inspection or investigation and the PCAOB inspectors and investigators
shall have a right to see all audit documentation without redaction. On December 15, 2022, the PCAOB announced that PCAOB has secured
complete access to inspect and investigate public accounting firms headquartered in mainland China and Hong Kong, and vacated previous
determinations to the contrary.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; ">&#160;</p><div>

</div><p style="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; ">Our auditor, the independent
registered public accounting firms that issue the audit report included elsewhere in this annual report, as an auditor of companies that
are traded publicly in the United States and a firm registered with the PCAOB, are subject to laws in the United States pursuant to which
the PCAOB conducts regular inspections to assess our auditors&#8217; compliance with the applicable professional standards.</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; ">However, the recent developments
would add uncertainties to our offering, and we cannot assure you whether Nasdaq or regulatory authorities would apply additional and
more stringent criteria to us after considering the effectiveness of our auditor&#8217;s audit procedures and quality control procedures,
adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial
statements. In addition, any additional actions, proceedings, or new rules resulting from the efforts to increase U.S. regulatory access
to audit information could create some uncertainty for investors, the market price of our ordinary share could be adversely affected,
and we could be delisted if we and our auditor are unable to meet the PCAOB inspection requirement or being required to engage a new audit
firm, which would require significant expense and management time.</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>&#160;Various proceedings
and legislative and regulatory developments due to political tensions between the U.S. and China may have an adverse impact on our listing
and trading in the U.S., including adverse impact on the market prices of the ordinary shares.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Political tensions between
the United States and China have escalated due to, among other things, trade disputes, the&#160;COVID-19 outbreak, sanctions imposed by
the U.S. Department of Treasury on certain officials of the Hong Kong Special Administrative Region and the central government of the
PRC and the executive orders issued by the former U.S. President Donald J. Trump in August 2020 that prohibit certain transactions with
certain Chinese companies and their applications. Rising political tensions could reduce levels of trade, investment, technological exchange
and other economic activities between the two major economies, which would have a material adverse effect on global economic conditions
and the stability of global financial markets. Any of these factors could have a material adverse effect on our business, prospects, financial
condition and results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt; ">&#160;</p><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><b><i>Cyber-attacks,
computer viruses, physical or electronic break-ins or other unauthorized access to our or our business partners&#8217; computer systems
could result in misuse of confidential information and misappropriation of funds of our borrowers and investors, subject us to liabilities,
cause reputational harm and adversely impact our results of operations and financial condition.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In our business, we collect,
store and process certain sensitive data from customers and other business partners. The data that we have processed and stored may make
us the target of, and potentially vulnerable to, cyber-attacks, computer viruses, physical or electronic break-ins or other unauthorized
access. While we have not experienced any material business or reputational harm as a result of such breach in the past, there can be
no assurance that our security measures to protect such confidential information will not be breached in the future. Because techniques
used to sabotage or obtain unauthorized access into 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 or our server hosting service providers&#8217; systems could cause confidential
borrower and investor information to be stolen and used for criminal purposes. As personally identifiable and other confidential information
is subject to legislation and regulations in numerous domestic and international jurisdictions, inability to protect confidential information
of our borrowers and investors could result in additional cost and liability for us, damage our reputation, inhibit the use of our platform
and harm our business.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in; ">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Administrative Measures
for the Security of the International Network of Computer Information Network, issued in December&#160;1997 and amended in January&#160;2011,
requires us to report any data or security breaches to the local offices of the PRC Ministry of Public Security within 24 hours of any
such breach. The Cyber Security Law of the PRC, issued in June&#160;2017, requires us to take immediate remedial measures when we discover
that our products or services are subject to risks, such as security defects or bugs. Such remedial measures include, informing our customers
of the specific risks and reporting such risks to the relevant competent departments. Cybersecurity and data privacy and security issues
are subject to increasing legislative and regulatory focus in China. The Data Security Law of the People&#8217;s Republic of China, which
took effect on September 1, 2021, requires that data collection must be conducted in a legitimate and proper manner, and in order to safeguard
data, data processing activities must be conducted to comply with respective graded protection systems for cybersecurity. On August 20,
2021, the NPC promulgated the Personal Information Protection Law (the &#8220;PIPL&#8221;), which has come into effect on November 1,
2021. The PIPL further emphasizes processors&#8217; obligations and responsibilities for personal information protection and sets out
the basic rules for processing personal information and the rules for cross-border transfer of personal information. On January 4, 2022,
the Cyber Administration of China, together with 12 other departments, promulgated the Cybersecurity Review Measures, or the New CAC Measures,
which came into effect on February 15, 2022. According to the New CAC Measures, critical information infrastructure operators purchasing
network products and services and online platform operators carrying out data processing activities that affect or may affect national
security shall conduct a cybersecurity review. Network platform operators holding personal information of more than 1 million users seeking
to be listed abroad must apply for a cybersecurity review as well. On July 30, 2021, the State Council of the PRC promulgated the Regulations
on the Protection of the Security of Critical Information Infrastructure, which took effect on September 1, 2021. The regulations require,
among others, that certain competent authorities shall identify critical information infrastructures. If any critical information infrastructure
is identified, they shall promptly notify the relevant operators and the Ministry of Public Security.</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 New CAC Measures do not
apply to the Company or any of its subsidiaries or VIEs as of the date of this annual report. The Company and any of its subsidiaries
or VIEs are not critical information infrastructure operators purchasing network products and services or online platform operators carrying
out data processing activities that affect or may affect national security. We hold less than 1 million users&#8217; personal information.
We believe we are not subject to the cybersecurity review under the New CAC Measures. As of the date of this report, we have not been
involved in any investigations on cybersecurity review initiated by the CAC, and we have not received any warning, sanction or penalty
in such respect. We believe that we are compliant with the regulations or policies that have been issued by the CAC as of the date 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: justify; text-indent: 0.5in">Continued expansion of business
operations by the Company, however, could bring the Company within the scope of authority of the CAC rules, and future enacted or amended
CAC rules may increase compliance standards on our business operation, and thus have a substantial impact on our business. There are substantial
uncertainties as to whether and how the CAC&#8217;s further actions and any amended version of the Cybersecurity Review Measures would
impact U.S. listed companies like us. It is likely that our data processing activities within China are regulated under any future enacted
or amended CAC rules, which may subject us to cybersecurity review if the PRC governmental authorities deem such activities have affected
or may affect national security. If we will be subject to increased scrutiny regarding data security and data protection, our business,
operation, reputation and the price of our securities may be adversely affected. Any unauthorized access, disclosure, misuse or other
loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information,
regulatory penalties, disruption to our operations and the services we provide to customers or damage our reputation, any of which could
adversely affect our results of operations, reputation and competitive position. As there remains significant uncertainty in the interpretation
and enforcement of relevant PRC cybersecurity laws and regulations, we could be subject to cybersecurity review, and if so, there is no
assurance that we would be able to pass such review in a timely manner or at all. In addition, we could become subject to enhanced cybersecurity
review or investigations launched by PRC regulators in the future. Any failure or delay in the completion of the cybersecurity review
procedures or any other non-compliance with the related laws and regulations may result in fines or other penalties, including suspension
of business, website closure, and revocation of prerequisite licenses, as well as reputational damage or legal proceedings or actions
against us, which may result in a material change in our operations, the value of the securities registered or could significantly limit
or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly
decline or be worthless.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Any failure to comply with relevant regulations
relating to social insurance and housing provident fund may subject us to penalty and materially and 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">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In accordance with the PRC
Social Insurance Law and the Regulations on the Administration of Housing Fund and other relevant laws and regulations, China has established
a social insurance system and other employee benefits including basic pension insurance, basic medical insurance, work-related injury
insurance, unemployment insurance, maternity insurance, housing fund, and a handicapped employment security fund, or collectively the
Employee Benefits. An employer shall pay the Employee Benefits for its employees in accordance with the rates provided under relevant
regulations and shall withhold the social insurance and other Employee Benefits that should be assumed by the employees. For example,
an employer that has not made social insurance contributions at a rate and based on an amount prescribed by the law, or at all, may be
ordered to rectify the non-compliance and pay the required contributions within a stipulated deadline and be subject to a late fee of
up to 0.05% or 0.2% per day, as the case may be. If the employer still fails to ratify the failure to make social insurance contributions
within the stipulated deadline, it may be subject to a fine ranging from one to three times of the amount overdue.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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">Under the Social Insurance
Law and the Regulations on the Administration of Housing Fund, our PRC subsidiaries or VIEs shall register with local social insurance
agencies and register with applicable housing fund management centers and establish a special housing fund account in an entrusted bank.
Our PRC subsidiaries and VIEs and their employees are required to pay the Employee Benefits.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Some of our PRC subsidiaries
are in the process of completing the social insurance registration and the housing fund registration, and we have only made social insurance
payments and housing provident fund contributions for some of our PRC employees, and did not make contributions in full for the social
insurance fund and housing provident fund for our employees as required under the relevant PRC laws and regulations. Although we have
not received any order or notice from the local authorities nor any claims or complaints from our current and former employees regarding
our non-compliance in this regard, we cannot assure you that we will not be subject to any order to rectify non-compliance in the future,
nor can we assure you that there are no, or will not be any, employee complaints regarding social insurance payment or housing provident
fund contributions against us, or that we will not receive any claims in respect of social insurance payment or housing provident fund
contributions under the PRC laws and regulation. In addition, we may incur additional costs to comply with such laws and regulations by
the PRC Government or relevant local authorities. Any such development 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>Non-compliance with labor-related laws and
regulations of the PRC may have an adverse impact on our financial condition and results of operation.</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 been subject to stricter
regulatory requirements in terms of entering into labor contracts with our employees and paying various statutory employee benefits, including
pensions, housing fund, medical insurance, work-related injury insurance, unemployment insurance and childbearing insurance to designated
government agencies for the benefit of our employees. Pursuant to the PRC Labor Contract Law, or the Labor Contract Law, that became effective
in January 2008 and amended in December 2012 and its implementing rules that became effective in September 2008, employers are subject
to stricter requirements in terms of signing labor contracts, minimum wages, paying remuneration, determining the term of employees&#8217;
probation and unilaterally terminating labor contracts. In the event that we decide to terminate some of our employees or otherwise change
our employment or labor practices, the Labor Contract Law and its implementation rules may limit our ability to affect those changes in
a desirable or cost-effective manner, which could adversely affect our business and results of operations. We believe our current practice
complies with the Labor Contract Law and its amendments. However, the relevant governmental authorities may take a different view and
impose fines on us in such circumstance.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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 the interpretation and
implementation of labor-related laws and regulations are still evolving, we cannot assure you that our employment practice does not and
will not violate labor-related laws and regulations in China, which may subject us to labor disputes or government investigations. If
we are deemed to have violated relevant labor laws and regulations, we could be required to provide additional compensation to our employees
and our business, financial condition and results of operations could be materially and adversely affected.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Some of the lease agreements of our leased
properties have not been registered with the relevant PRC government authorities as required by PRC law, which may expose us to potential
fines.</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">Under PRC law, all lease agreements
are required to be registered with the local land and real estate administration bureau. Although failure to do so does not in itself
invalidate the leases, the lessees may not be able to defend these leases against bona fide third parties and may also be exposed to potential
fines if they fail to ratify such non-compliance within the prescribed time frame after receiving notice from the relevant PRC government
authorities. The penalty ranges from RMB1,000 (approximately $141.50) to RMB10,000 (approximately $1,415.00) for each unregistered lease,
at the discretion of the relevant authority. As of the date of this annual report, the lease agreement for our leased building in China
has not been registered with the relevant PRC government authorities. In the event that any fine is imposed on us for our failure to register
our lease agreements, we may not be able to recover such losses from the lessors.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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 rights to use our leased properties
could be challenged by property owners or other third parties, which may disrupt our operations and incur relocation costs.</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 of the date of this annual
report, the lessors of our leased properties in China have not been able to provide us with valid property ownership certificates or authorizations
from the property owners for the lessors to sublease the properties, and we have subleased certain of our leased properties to third parties.
There is a risk that such lessors may not have the relevant property ownership certificates or the right to lease or sublease such properties
to us, in which case the relevant lease agreements and the sublease agreements may be deemed invalid and we may be forced to vacate these
properties. In addition, our usage of the leased properties may be inconsistent with the designated usage, in which case we may not be
able to continue to use the leased properties. The above risks could interrupt our business operations and result in relocation costs.
Moreover, if our lease agreements are challenged by third parties, it could result in diversion of management attention and cause us to
incur costs associated with defending such actions, even if such challenges are ultimately determined in our favor.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Fluctuation in the currency exchange rate
of RMB may have a material adverse effect on our business, operations and financial 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 revenue and expenses have
been and are expected to continue to be primarily denominated in RMB and we are exposed to the risks associated with the fluctuation in
the currency exchange rate of RMB. Should RMB appreciate against other currencies, any future financings, which are to be converted from
US dollar or other currencies into RMB, would be reduced and might accordingly hinder our business development due to the lessened amount
of funds raised. On the other hand, in the event of the devaluation of RMB, the dividend payments of our Company, which are to be paid
in US dollars after the conversion of the distributable profit denominated in RMB, would be reduced. Hence, substantial fluctuation in
the currency exchange rate of RMB may have a material adverse effect on our business, operations and financial position and the value
of your investment in the Shares.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>We are a holding company and our ability
to pay dividends is primarily dependent upon the earnings of, and distributions by, our subsidiaries and VIEs in the PRC.</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 are a holding company incorporated
under the laws of the Cayman Islands with limited liability. No dividends have been paid or declared by our Company. The majority of our
business operations are conducted through our subsidiaries and VIEs in the PRC and hence, our revenue and profit are substantially contributed
by our subsidiaries and VIEs in the PRC.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our ability to pay dividends
to our shareholders is primarily dependent upon the earnings of our subsidiaries and VIEs in the PRC and their distribution of funds to
us, primarily in the form of dividends. The ability of our subsidiaries in the PRC to make distributions to us depends upon, among others,
their distributable earnings. Under the PRC laws, payment of dividends is only permitted out of accumulated profits according to PRC accounting
standards and regulations, and our subsidiaries and VIEs in the PRC are also required to set aside part of its after-tax profits to fund
certain reserve funds that are not distributable as cash dividends. Other factors such as cash flow conditions, restrictions on distributions
contained in our PRC subsidiaries&#8217; and VIEs&#8217; articles of associations, restrictions contained in any debt instruments, withholding
tax and other arrangements will also affect the ability of our subsidiaries and VIEs in the PRC to make distributions to us. These restrictions
could reduce the amount of distributions that we receive from our subsidiaries and VIEs in the PRC, which in turn would restrict our ability
to pay dividends on the Shares. The amounts of distributions that any of our subsidiaries or VIEs declared and made in the past are not
indicative of the dividends that we may pay in the future. There is no assurance that we will be able to declare or distribute any dividend
in the future.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>There are significant uncertainties under
the PRC Enterprise Income Tax Law relating to the withholding tax liabilities of our PRC subsidiaries and VIEs, and dividends payable
by our PRC subsidiaries to our offshore subsidiaries and may not qualified to enjoy certain treaty benefits.</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">Under the PRC Enterprise Income
Tax Law and its implementation rules, the profits of a foreign-invested enterprise (&#8220;FIE&#8221;) generated through operations, which
are distributed to its immediate holding company outside China, will be subject to a withholding tax rate of 10%. Pursuant to a special
arrangement between Hong Kong and China, such rate may be reduced to 5% if a Hong Kong resident enterprise owns more than 25% of the equity
interest in the PRC company. Our current PRC subsidiaries are wholly-owned by our Hong Kong subsidiaries, YGMZ (Hong Kong) Limited (&#8220;MingZhu
HK&#8221;), Cheyi (Hong Kong) Limited, Yinhua (HK) Limited and Feipeng Enterprises (HK) Limited. Accordingly, they may qualify for a 5%
tax rate in respect of distributions from its PRC subsidiaries. Under the Notice on Certain Issues with Respect to the Enforcement of
Dividend Provisions in Tax Treaties promulgated in 2009, the tax payer needs to satisfy certain conditions to enjoy the benefits under
a tax treaty. These conditions include: (i) the taxpayer must be the beneficial owner of the relevant dividends, and (ii) the corporate
shareholder to receive dividends from the PRC subsidiaries must have met the direct ownership thresholds during the 12 consecutive months
preceding the receipt of the dividends. Further, in February 2018, the SAT issued the Announcement of the State Administration of Taxation
on Issues Relating to &#8220;Beneficial Owner&#8221; in Tax Treaties, which sets forth certain detailed factors in determining &#8220;beneficial
owner&#8221; status.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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">Entitlement to a lower tax
rate on dividends according to tax treaties or arrangements between the PRC central government and governments of other countries or regions
is subject to the Administrative Measures on Entitlement of Non-resident Taxpayers to Tax Treaty Benefits, which provides that entitlement
to treaty benefits for non-resident taxpayers shall be handled by means of &#8220;self-judgment of eligibility, declaration of entitlement,
and retention of relevant materials for future reference.&#8221; Where non-resident taxpayers judge by themselves that they meet the conditions
for entitlement to treaty benefits, they may obtain such entitlement themselves at the time of making tax declarations, or at the time
of making withholding declarations via withholding agents. At the same time, they shall collect, gather and retain relevant materials
for future reference in accordance with the provisions of these Measures, and shall accept the follow-up administration of tax authorities.
As a result, we cannot assure you that we will be entitled to any preferential withholding tax rate under treaties for dividends received
from our PRC subsidiaries.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>PRC regulations relating to offshore investment
activities by PRC residents may limit our PRC subsidiaries&#8217; and VIEs&#8217; ability to change their registered capital or distribute
profits to us or otherwise expose us or our PRC resident beneficial owners to liability and penalties under PRC laws.</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">In July 2014, SAFE promulgated
the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents&#8217; Offshore Investment and Financing and
Roundtrip Investment Through Special Purpose Vehicles, or SAFE Circular 37. SAFE Circular 37 requires PRC residents (including PRC individuals
and PRC corporate entities as well as foreign individuals that are deemed as PRC residents for foreign exchange administration purpose)
to register with SAFE or its local branches in connection with their direct or indirect investment activities. SAFE Circular 37 further
requires an amendment to the SAFE registrations in the event of any changes with respect to the basic information of the offshore special
purpose vehicle, such as change of a PRC individual shareholder, name and operation term, or any significant changes with respect to the
offshore special purpose vehicle, such as increase or decrease of capital contribution, share transfer or exchange, or mergers or divisions.
SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make
in the future.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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">If our shareholders who are
PRC residents fail to make the required registration or to update the previously filed registration, our PRC subsidiaries and VIEs may
be prohibited from distributing or transferring their profits or the proceeds from any capital reduction, share transfer or liquidation
to us, and we may also be prohibited from making additional capital contribution into our PRC subsidiaries or transfer funds to VIEs.
In February 2015, SAFE promulgated a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment,
or SAFE Notice 13, effective from June 2015 and partially repealed on December 30, 2019. Under SAFE Notice 13, applications for foreign
exchange registration of inbound foreign direct investments and outbound overseas direct investments, including those required under SAFE
Circular 37, will be filed with qualified banks instead of SAFE. The qualified banks will directly examine the applications and accept
registrations under the supervision of SAFE.</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">Mr. Jinlong Yang, our controlling
shareholder, has completed the initial registrations with the local SAFE branch or qualified banks as required by SAFE Circular 37. However,
we may not be informed of the identifies of all the PRC residents holding direct or indirect interest in our company, and we cannot provide
any assurance that these PRC residents will comply with our request to make or obtain any applicable registrations or continuously comply
with all requirements under SAFE Circular 37 or other related rules. The failure or inability of the relevant shareholders to comply with
the registration procedures set forth in these regulations may subject us to fines and legal sanctions, such as restrictions on our cross-border
investment activities, on the ability of our wholly foreign-owned subsidiaries in China to distribute dividends and the proceeds from
any reduction in capital, share transfer or liquidation to us. Moreover, any failure to comply with the various foreign exchange registration
requirements described above could result in liability under PRC law for circumventing applicable foreign exchange restrictions. Furthermore,
as these foreign exchange regulations are still relatively new and their interpretation and implementation have been constantly evolving,
it is unclear how these regulations, and any future regulation concerning offshore or cross-border transactions, will be interpreted,
amended and implemented by the relevant government authorities. As a result, our business operations and our ability to distribute profits
to you 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>PRC regulation of loans to and direct investment
in PRC entities by offshore holding companies and governmental control of currency conversion may delay us from using funds out of PRC,
to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and
our ability to fund and expand our business.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Any funds we transfer to our
PRC subsidiaries, either as a shareholder loan or as an increase in registered capital, are subject to approval by or registration with
relevant governmental authorities in China regardless of the amount of the transfer. According to the relevant PRC regulations on FIEs
in China, capital contributions to our PRC subsidiaries are subject to submit the report of changes through the enterprise registration
system and registration with a local bank authorized by SAFE. In addition, (i) any foreign loan procured by our PRC subsidiaries is required
to be registered with SAFE or their respective local branches and (ii) our PRC subsidiaries may not procure loans which exceed the difference
between their respective total project investment amount and registered capital or 2.5 times of their net worth. Furthermore, the foreign
loan is required to be registered with the NPRC. See &#8220;4.B. Business Overview &#8211; Regulations Relating to Funds Transfer to PRC
Subsidiaries.&#8221; We may not be able to complete such registrations or obtain necessary approvals on a timely basis with respect to
future capital contributions or foreign loans by us to our PRC subsidiaries. If we fail to complete such registrations or other procedures,
our ability to use funds out of PRC, and to capitalize our PRC operations may be negatively affected, which could adversely affect our
liquidity and our ability to fund and expand our business.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On March 30, 2015, the SAFE
promulgated the Circular 19, which took effect as of June 1, 2015 and partially repealed on December 30, 2019. Circular 19 launched a
nationwide reform of the administration of the settlement of the foreign exchange capitals of FIEs and allows FIEs to settle their foreign
exchange capital at their discretion, but continues to prohibit FIEs from using the Renminbi fund converted from their foreign exchange
capital for expenditure beyond their business scopes, providing entrusted loans or repaying loans between nonfinancial enterprises. The
SAFE issued the Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or
SAFE Circular 16, effective in June 2016. Pursuant to SAFE Circular 16, enterprises registered in China may also convert their foreign
debts from foreign currency to Renminbi on a self-discretionary basis. SAFE Circular 16 provides an integrated standard for conversion
of foreign exchange under capital account items (including but not limited to foreign currency capital and foreign debts) on a self-discretionary
basis which applies to all enterprises registered in China. SAFE Circular 16 reiterates the principle that Renminbi converted from foreign
currency-denominated capital of a company may not be directly or indirectly used for purposes beyond its business scope or prohibited
by PRC laws or regulations, while such converted Renminbi shall not be provided as loans to its non-affiliated entities. As this circular
is relatively new, there remains uncertainty as to its interpretation and application and any other future foreign exchange related rules.
Violations of these Circulars could result in severe monetary or other penalties. SAFE Circular 19 and SAFE Circular 16 may significantly
limit our ability to use Renminbi converted from the funds out of PRC, to invest in or acquire any other PRC companies through our PRC
subsidiaries, which may adversely affect our business, financial condition and results of operations.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>If we are classified as a PRC resident enterprise
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">Under the PRC Enterprise Income
Tax Law and its implementation rules, an enterprise established outside of the PRC with its &#8220;<i>de facto </i>management body&#8221;
within the PRC is considered a &#8220;resident enterprise&#8221; and will be subject to the enterprise income tax on its global income
at the rate of 25%. The implementation rules define the term &#8220;<i>de facto</i> management body&#8221; as the body that exercises
full and substantial control and overall management over the business, productions, personnel, accounts and properties of an enterprise.
In 2009, the SAT, issued a circular, known as SAT Circular 82, partially abolished on December 29, 2017, which provides certain specific
criteria for determining whether the &#8220;<i>de facto</i> management body&#8221; of a PRC-controlled enterprise that is incorporated
offshore is located in China. Although this circular applies only to offshore enterprises controlled by PRC enterprises or PRC enterprise
groups, not those controlled by PRC individuals or foreigners, the criteria set forth in the circular may reflect the SAT&#8217;s general
position on how the &#8220;<i>de facto</i> management body&#8221; text should be applied in determining the tax resident status of all
offshore enterprises. According to SAT Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise
group will be regarded as a PRC tax resident by virtue of having its &#8220;<i>de facto</i> management body&#8221; in China, and will
be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location
of the day-to-day operational management is in the PRC; (ii) decisions relating to the enterprise&#8217;s financial and human resource
matters are made or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise&#8217;s primary assets, accounting
books and records, company seals, and board and shareholder resolutions are located or maintained in the PRC; and (iv) at least 50% of
voting board members or senior executives habitually reside in the PRC.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We believe that, as a Cayman
Islands exempted company, our company is not a PRC resident enterprise for PRC tax purposes. However, the tax resident status of an enterprise
is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term &#8220;<i>de
facto</i> management body.&#8221; If the PRC tax authorities determine that our company is a PRC resident enterprise for enterprise income
tax purposes, we would be subject to PRC enterprise income on our worldwide income at the rate of 25%. Furthermore, we would be required
to withhold a 10% tax from dividends we pay to our shareholders that are non-resident enterprises, including the holders of our ordinary
shares. In addition, non-resident enterprise shareholders may be subject to PRC tax on gains realized on the sale or other disposition
of the ordinary shares, if such income is treated as sourced from within the PRC. Furthermore, if we are deemed a PRC resident enterprise,
dividends paid to our non-PRC individual shareholders and any gain realized on the transfer of the ordinary shares by such shareholders
may be subject to PRC tax at a rate of 20% (which, in the case of dividends, may be withheld at source by us). These rates may be reduced
by an applicable tax treaty, but it is unclear whether non-PRC shareholders of our company would be able to claim the benefits of any
tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise. Any such
tax may reduce the returns on your investment in our securities.</p><div>

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




</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Epidemics, acts of war and other disasters may adversely affect
our 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">Our business is subject to
general economic and social conditions in the PRC. Natural disasters, epidemics and other acts of God which are beyond human control may
adversely affect the economy, infrastructure and livelihood of the people of the PRC. Many major cities in the PRC are under threat of
flood, earthquake, typhoon, sandstorm or drought. Our business, results of operations and financial condition may be adversely affected
if such natural disasters occur. We may be required to disinfect our affected operational premises, which could adversely affect our operations.
Even if we are not directly affected by the epidemic, it could slow down or disrupt the level of economic activity generally, which could
in turn adversely affect our 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>

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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">In addition, acts of war and
terrorist attacks may cause damage or disruption to our operations, employees, markets or clients, any of which could adversely impact
our turnover, cost of sales, overall results and financial condition or the market price of the Shares. Potential war or terrorist attacks
may also cause uncertainty and cause the business to suffer in ways that we cannot currently predict.</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>Risks Related to Our Business and Our Industry</b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our reliance on major customers and any
loss of our major customers or changes in their demands for our services would likely have a material adverse effect on our business,
results of operations, financial conditions and prospect.</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 historically relied
on a limited number of major customers for a significant portion of our revenues, and we anticipate that such reliance will remain unchanged
in the near future. During the years ended December 31, 2022, 2021 and 2020, sales to our top five customers accounted for approximately
31.4%, 49.4% and 78.2%, respectively.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our service agreements with
our customers are generally for an average term of one year. While certain service agreements contain options of renewal, there is no
assurance that our major customers will continue their business relationship with us, or the revenue generated from dealings with them
will be maintained or increased in the future. In particular, if there is any claim against us related to the quality of our services
from our major customers, such claim would affect the relationship with our major customers or substantially reduce their demand of our
trucking services.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If we are unable to renew
service agreements with our customers, or there is a reduction or cessation of demands from these customers for whatever reasons and we
are unable to enter into new service agreements of comparable size and on similar terms in substitution, our business, financial conditions
and results of operation may be materially and adversely affected. In addition, any deterioration on our customers&#8217; ability to use
our services and/or pay for our services in a timely manner will also have a material adverse effect on our business, results of operations,
financial conditions and prospect.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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">Although a number of our business
strategies will help mitigate risks resulting from our reliance on major customers, see &#8220;4.B. Business Overview &#8211; Our Strategies&#8221;,
&#8220;4.B. Business Overview &#8211; Customers &#8211; Our Relationship with Major Customers&#8221; there is no assurance that these
strategies will be implemented successfully or, if implemented, fully mitigate the risks in connection with the loss of one or more major
customers.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>None of our service agreements with our
customers are on an exclusive basis.</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">None of our service agreements
with our customers are on an exclusive basis and our customers can engage other transportation services provider(s) for the provision
of transportation and delivery services in addition to or in lieu of 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; text-indent: 0.5in">Though we have had stable
business relationships with our major customers, there is no assurance that our major customers will not engage one or more service providers
for the provision of transportation services during the term of our service agreements with them. We cannot assure you that we can generate
the same level of or increased revenue from our major customers as compared to the existing scenario. Any appointment of any additional
transportation services providers by our major customers could therefore have a material adverse impact on our business, financial condition
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>

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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>If we are unable to collect our receivables
from our existing customers, our results of operations and cash flows could be adversely affected.</i></b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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 depends on our
ability to successfully obtain payment from our customers of the amounts they owe us for our services. As of December 31, 2022 we had
accounts receivable recorded at $20,073,082, of which $945,761 was allowanced and $nil was past due but not impaired.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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 establish an allowance
for doubtful accounts based upon estimates, historical experience and other factors surrounding the credit risk of specific customers.
However, actual losses on customer receivables balance could differ from those that we anticipate and as a result we might need to adjust
our allowance. There is no guarantee that we will accurately assess the creditworthiness of our customers. Macroeconomic conditions, including
related turmoil in the global financial system, could also result in financial difficulties for our customers, including limited access
to the credit markets, insolvency or bankruptcy, and as a result could cause customers to delay payments to us, requesting modifications
to their payment arrangements that could increase our receivables balance or default on the payment obligations to us. As a result, an
extended delay or default in payment relating to a significant account will have a material and adverse effect on the aging schedule and
turnover days of our accounts receivable. If we are unable to collect our receivables from our customers in accordance with the contracts
with our customers, our results of operations and cash flows could be adversely affected.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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 agreements governing the loan facilities
MingZhu currently has contain restrictions and limitations that could significantly affect our ability to operate our business, raise
capital, as well as significantly affect our liquidity, and therefore could adversely affect our 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">Under its loan agreements
with existing lenders, Shenzhen Yangang Mingzhu Freight Industry Co., Ltd. (or &#8220;MingZhu&#8221;), one of our operating subsidiaries
in the PRC, Mingzhu has the obligation to notify its lenders prior to certain corporate actions. Such corporation actions include, among
other events, mergers, equity offerings, transfers of material assets, involvement in a material lawsuit and certain material related
party transactions. In addition, pursuant to its loan agreements, MingZhu cannot provide guarantees to any third party, prioritize repayment
of other loans, pay dividends to its shareholders or consummate a reorganization or share ownership restructuring without prior written
consent of certain lenders.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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 foregoing provisions restrict,
among other aspects, MingZhu&#8217;s 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">&#9679;</td>
    <td style="text-align: justify">incur or permit to exist any additional indebtedness or liens;</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: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">guarantee or otherwise become liable with respect to the obligations of another party or entity;</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: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">acquire any assets or enter into merger or joint venture transactions; and</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: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">consummate certain related party transactions.</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">Our ability to comply with
these provisions may be affected by events beyond our control. A failure to comply with any of such provisions will constitute an event
of default under existing loan agreements of MingZhu, upon which the lenders will have the right to take a number of remedial actions
that could adversely affect our liquidity and results of operations. See &#8220;&#8211; Defaults under our loan agreements could result
in a substantial loss of our assets.&#8221;</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Defaults under our loan agreements could
result in a substantial loss of our assets and adversely affect our financial condition and operating results.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A failure to repay any of
the indebtedness under our loan agreements as they become due or to otherwise comply with the covenants contained therein could result
in an event of default thereunder. In addition, the loan agreements between MingZhu and certain lenders contain a cross-default provision,
pursuant to which a default under any other loan agreement will be deemed an event of default under such agreements. If not cured or waived,
an event of default under our existing loan agreements could enable the lenders to declare all borrowings outstanding on such debt, together
with accrued and unpaid interest and fees, to be due and payable and terminate all commitments to extend further credit. The lenders could
also elect to foreclose on our assets securing such debt. In such an event, we may not be able to refinance or repay our indebtedness,
pay dividends or have sufficient liquidity to meet operating and capital expenditure requirements. Any such acceleration could cause us
to lose a substantial portion of our assets and will substantially adversely affect our financial condition and operating results.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Our cash flow position may deteriorate owing
to the difference in timing between receipt of payments from our customers and payments to our suppliers and subcontractors if we are
unable to such timing difference and its impact on our cash flow properly.</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">For our daily operations,
we outsourced a portion of our transportation services to external transportation companies, and sourced tires and fuel oils from the
third-party suppliers. Our cash flows depend on timely receipt of payments from our customers to meet our payment obligations to our suppliers
and subcontractors. As of December 31, 2022, 2021 and 2020, our trade payables amounted to approximately $10,134,535, $1,344,532 and $1,415,591,
respectively, whereas the respective trade payables accounted for approximately 16.4%, 3.9% and 11.3% of our total current liabilities,
respectively.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our accounts receivable turnover
days were approximately 145.8, 94.6 and 157.6 days, respectively, during 2022, 2021 and 2020. As a result of the above, our daily operation
has to rely on our internal resources, bank borrowings and loans from shareholders to maintain our cash flow and satisfy the needs of
our daily 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; text-indent: 0.5in">If we fail to manage the timing
difference between receipt of customer payments and supplier payments, or if the timing difference is further aggravated, we may have
to resort to reserve further funds from our internal resources and/or obtain banking facilities and/or shareholder loans to meet our payment
obligations, which may not be readily available, or if available on reasonable economic terms and our financial condition may be materially
and adversely affected as a result.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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 rely on subcontractors to handle a proportion
of our trucking services. Any delay or failure in their services would adversely affect our operations and financial results.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We subcontract a portion of
our trucking services, specifically delivery orders from customers with irregular delivery schedules, to external transportation companies.
For the years ended December 31, 2022, 2021 and 2020, subcontracting charges incurred by us were approximately 85.0% 48.1% and 61% of
our total transportation costs, respectively. Any significant increase in the service fees charged by our subcontractors may have an adverse
impact on our financial results.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There is no assurance that
we will be able to monitor the performance of our subcontractors as directly and efficiently as with our own staff. If their performance
is below our requisite standards or those of our customers, these sub-standard services may adversely damage our business reputation,
cause our customers to deduct our service fees, negatively affect the relationship with our customers and potentially expose us to litigations
and claims from our customers. Further, we may incur additional costs for sourcing alternative services providers at a price higher than
we originally anticipated. This could adversely affect the profitability of 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">Notwithstanding the stable
business relationship with our subcontractors, there is no assurance that we would be able to maintain such a relationship with them in
the future. There is also no assurance that we would be able to find alternative subcontractors with the requisite expertise, experience
and capability that can meet our business needs and tight delivery schedules with competitive prices and acceptable terms of service in
a timely manner. In addition, we are not sure that our all customers will allow us to subcontract our business in the future. In such
event, our ability to complete our trucking services on time with effective cost could be impaired, thereby damaging our business reputation
and adversely affecting our operations and financial result.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>Difficulty in obtaining material, equipment,
goods and services from our vendors and suppliers could adversely affect 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">We are dependent upon our
suppliers for certain products and materials, including our tractors and trailers. We manage our over-the-road fleet to a five-year trade
cycle with the current average age-of-fleet of our vehicles at approximately three years. Accordingly, we rely on suppliers of our trucks
and truck components to maintain the age of our fleet. We believe that we have positive relationships with our suppliers and are generally
able to obtain favorable pricing and other terms from such parties. If we fail to maintain these relationships with our suppliers, or
if our suppliers are unable to provide the products and materials we need or undergo financial hardship, we could experience difficulty
in obtaining needed goods and services because of production interruptions, limited material availability or other reasons. Subsequently,
our business and 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: justify"></p><div>

</div><!-- Field: Page; Sequence: 30; 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 -->27<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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 trucking service market in the PRC is
highly competitive and fragmented, which subjects us to competitive pressures pertaining to pricing, capacity and service.</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 operating segments compete
with many trucking service carriers, certain railroads, logistics, brokerage, freight forwarding and other transportation companies. The
trucking service market in the PRC is highly competitive and fragmented. Some of our competitors may have greater access to equipment,
a larger fleet, a wider range of services, preferential dedicated customer contracts, greater capital resources or other competitive advantages.
Numerous competitive factors could impair our ability to maintain or improve our profitability. These factors include the following:</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr>
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="vertical-align: top; width: 24px; text-align: justify">&#9679;</td>
    <td style="vertical-align: top; text-align: justify">Many of our competitors periodically reduce their freight rates to gain business, especially during times of reduced growth in the economy. This may make it difficult for us to maintain or increase freight rates, or may require us to reduce our freight rates. Additionally, it may limit our ability to maintain or expand our business.</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr>
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="vertical-align: top; width: 24px; text-align: justify">&#9679;</td>
    <td style="vertical-align: top; text-align: justify">Since some of our customers also operate their own private trucking fleets, they may decide to transport more of their own freight.</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr>
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="vertical-align: top; width: 24px; text-align: justify">&#9679;</td>
    <td style="vertical-align: top; text-align: justify">Many customers periodically solicit bids from multiple carriers for their shipping needs, despite the existence of dedicated contracts, which may depress freight rates or result in a loss of business to our competitors.</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr>
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="vertical-align: top; width: 24px; text-align: justify">&#9679;</td>
    <td style="vertical-align: top; text-align: justify">The continuing trend toward consolidation in the transportation industry may result in more large carriers with greater financial resources and other competitive advantages, with which we may have difficulty competing.</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr>
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="vertical-align: top; width: 24px; text-align: justify">&#9679;</td>
    <td style="vertical-align: top; text-align: justify">Higher fuel prices and higher fuel surcharges to our customers may cause some of our customers to consider freight transportation alternatives, including rail transportation.</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr>
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="vertical-align: top; width: 24px; text-align: justify">&#9679;</td>
    <td style="vertical-align: top; text-align: justify">Advancements in technology may necessitate that we increase investments in order to remain competitive, and our customers may not be willing to accept higher freight rates to cover the cost of these investments.</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr>
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="vertical-align: top; width: 24px; text-align: justify">&#9679;</td>
    <td style="vertical-align: top; text-align: justify">Competition from freight logistics and brokerage companies may negatively impact our customer relationships and freight rates.</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr>
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="vertical-align: top; width: 24px; text-align: justify">&#9679;</td>
    <td style="vertical-align: top; text-align: justify">Smaller carriers may build economies of scale with procurement aggregation providers, which may improve such carriers&#8217; abilities to compete with us.</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"><b><i>The trucking service market is affected
by economic and business risks that are largely beyond our control.</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The trucking service market
is highly cyclical, and our business is dependent on a number of factors that may have a negative impact on our operating results, many
of which are beyond our control. We believe that some of the most significant factors beyond our control that may negatively impact our
operating results are economic changes that affect supply and demand in transportation industry, 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>
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="vertical-align: top; width: 24px; text-align: justify">&#9679;</td>
    <td style="vertical-align: top; text-align: justify">changes in customers&#8217; inventory levels, including shrinking product/package sizes, and in the availability of funding for their working capital;</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr>
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="vertical-align: top; width: 24px; text-align: justify">&#9679;</td>
    <td style="vertical-align: top; text-align: justify">industry compliance with an ongoing regulatory environment;</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr>
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="vertical-align: top; width: 24px; text-align: justify">&#9679;</td>
    <td style="vertical-align: top; text-align: justify">excess truck capacity in comparison with shipping demand; and</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr>
    <td style="width: 48px; text-align: justify">&#160;</td>
    <td style="vertical-align: top; width: 24px; text-align: justify">&#9679;</td>
    <td style="vertical-align: top; text-align: justify">downturns in customers&#8217; business cycles, which may be caused by declines in consumer spending.</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"></p><div>

</div><!-- Field: Page; Sequence: 31; 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 -->28<!-- 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; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">The
risks associated with these factors are heightened when the Chinese economy is weakened. Some of the principal risks during such times
are as follows:</span></p><div>

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

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

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr>
    <td style="width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">changing freight patterns
    resulting from redesigned supply chains, resulting in an imbalance between our capacity and customer demand; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr>
    <td style="width: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="vertical-align: top; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">customers bidding out
    freight or selecting competitors that offer lower rates, in an attempt to lower their costs, forcing us to lower our rates or lose
    freight.</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Economic
conditions that decrease shipping demand or increase the supply of capacity in the trucking service market can exert downward pressure
on rates and equipment utilization, thereby decreasing asset productivity. Declining freight levels and rates, a prolonged recession
or general economic instability could result in declines in our results of operations, which declines may be material.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
also are subject to cost increases outside our control that could materially reduce our profitability if we are unable to increase our
rates sufficiently. Such cost increases include, but are not limited to, fuel and energy prices, driver wages, taxes and interest rates,
tolls, license and registration fees, insurance premiums, regulations, revenue equipment and related maintenance costs and healthcare
and other benefits for our associates. We cannot predict whether, or in what form, any such cost increase or event could occur. Any such
cost increase or event could adversely affect our profitability.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">In
addition, events outside our control, such as strikes or other work stoppages at our facilities or at customer, port, border or other
shipping locations, weather, actual or threatened armed conflicts or terrorist attacks, efforts to combat terrorism, military action
against a foreign country or group located in a foreign country or heightened security requirements could lead to reduced economic demand,
reduced availability of credit or temporary closing of shipping locations. Such events or enhanced security measures in connection with
such events could impair our operations and result in higher operating costs.</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">&#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"><b><i>We
are, to a certain extent, dependent on the consumer and retail market in the PRC.</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
mainly provide trucking services to our customers in the transportation industry, some of whom ultimately provide transportation services
to end customers in the consumer and retail market in the PRC. As such, our business performance will, to a certain extent, be affected
by our customers&#8217; business performance and the consumer and retail market in the PRC. Although these customers of ours who are
consumer goods delivery services providers may not have contributed substantially to our total revenue in the past two years, if these
customers&#8217; sales in the PRC decline, such decline may likely lead to a corresponding decrease in demand for our services. Furthermore,
as we expand our business, we may solicit new customers who are consumer goods delivery services providers or strengthen our relationships
with this type of existing customers, which may lead to stronger reliance on these customers. Any adverse developments in our customers&#8217;
business performance could therefore materially and adversely affect our business, financial condition and results of operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#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"><b><i>We
may not be able to implement all or any of our business plans successfully.</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">As
part of our business strategies, we plan to expand our own fleet of delivery vehicles and labor force, expand our sales and marketing
network and establish an information technology system which can facilitate our preparation of delivery routes and schedules and enable
tracking and monitoring of the status of delivery by our self-owned trucking vehicles and subcontractors. Such future plan is developed
based on a number of assumptions, forecasts and commitment of our management. We may not succeed in executing our business strategies
due to a number of reasons, including the following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td style="width: 0.25in"><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">we may fail to acquire
    delivery vehicles at our expected prices or recruit a sufficient number of skilled drivers and employees to align with our expansion;</span></td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">we may not have sufficient financial resources available;</span></td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">we may fail to adapt ourselves to the information technology
    system;</span></td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">we may fail to expand our sales and marketing network;</span></td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">we may fail to meet our customers&#8217; demands for
    our trucking services; and</span></td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
  <tr style="vertical-align: top">
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">we may fail to reach the targets we expect from our
    expansion and business strategies.</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">If
we fail to successfully implement our business strategies, we may not be able to maintain our growth rate and our business, financial
condition and results of operations may be materially and adversely affected.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#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: 32; 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 -->29<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>Expanding
our self-owned vehicle fleet may result in a significant increase in our depreciation 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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
intend to expand the scale of our own vehicle fleet in order to accommodate potential new business opportunities. Such expansion of our
self-owned vehicle fleet may result in a significant increase in our depreciation expenses, which may in turn materially and adversely
affect our business, financial condition and results of operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#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"><b><i>Our
operation is exposed to disruptions due to bad weather, possible occurrences of natural disasters, epidemics and other diseases and uncertainties,
traffic congestions and public civil movements</i></b><i>.</i></span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">As
we provide trucking services, any significant disruption in traffic due to severe traffic congestions, weather conditions or disturbances
such as public civil movements, flash floods, or breakdown in major road infrastructure may lead to a reduction in and/or delay of our
services. Such service interruptions may adversely affect our service quality in meeting our customers&#8217; key performance indicators
(&#8220;KPIs&#8221;) requirements and negatively affect our relationship with our customers. Further, we may have to engage additional
delivery vehicles from other transportation companies to maintain our service operations. The occurrence of any of the foregoing events
may adversely affect our business, financial condition and results of operations.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#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"><b><i>Our
business operations have been and may continue to be materially and adversely affected by the outbreak of the coronavirus disease (COVID-19).</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">An
outbreak of respiratory illness caused by a novel coronavirus (COVID-19) was first emerged in China in late 2019 and continues to expand
within the PRC and globally. On January 30, 2020, the WHO declared the outbreak of COVID-19 a public health emergency of international
concern. On March 11, 2020, the WHO declared the outbreak of COVID-19 a pandemic, expanding its assessment of the threat beyond the global
health emergency it had announced in January. As of the date of this annual report, the virus had spread globally. With an aim to contain
the COVID-19 pandemic, the PRC government had imposed extreme measures across the PRC during the first half of 2020 including complete
or partial lockdown measures across various cities in the PRC, the extended shutdown of business operations, and the mandatory quarantine
requirements on infected individuals and anyone deemed potentially infected.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">The
COVID-19 pandemic, which has resulted in a high number of fatalities worldwide, has an adverse impact on the livelihood of the people
in and the economy of the PRC. The trucking services and transportation industry in the PRC have been and may continue to be adversely
impacted. The economy slowdown and/or negative business sentiment have a negative impact on the transportation industry and our business
operations and financial condition have been and may continue to be adversely affected.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">The
impacts of COVID-19 on our business, financial condition, and results of operations include, but are not limited to, the following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><i>Extended Collection Time and Increase
    in Bad Debts</i>. Our customers may require additional time to pay us or fail to pay us which may require us to record additional
    allowances. In order to faithful reflect the performance and condition of the Company, we had temporally revised our policy of allowance
    for doubtful accounts with additional allowances recorded. We are currently working with our customers for payments and have not
    experienced significant collection issues as of the date of this annual report. We will monitor our collection closely through 2023.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><i>Shortage of Drivers</i>. Due to the travel
    restrictions imposed by the local governments, some of our drivers have not been able to get back on road for work. However, the
    impact of such shortage of drivers is not significant to the Company because the customer orders have dropped due the COVID-19 pandemic
    and we pay our drivers on a per-drive basis for fulfilled customer orders only.</span></td></tr>
  </table><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"></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">With
daily life in China gradually returning to normal since April 2022, our business related to logistics industry has gone back to normal
as well. However some new cases found in Xinjiang region caused heavy lockdown starting from June 2022. Our revenue generated from Xinjiang
was substantially reduced during June. To the date of this filing, our revenue is still negatively affected by temporarily lockdown across
the nation. We cannot foresee whether the COVID-19 pandemic will be effectively contained, nor can we predict the severity and duration
of its impact. If the COVID-19 pandemic is not effectively and timely controlled, our business operations and financial condition may
be adversely affected as a result of the deteriorating market outlook, the slowdown in regional and national economic growth, weakened
liquidity and financial condition of our customers or other factors that we cannot foresee.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
may experience labor shortage or unrest.</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Our
services involve a substantial amount of labor force. While we have not experienced any significant labor shortage, we may face such
problem in the future. We may be required to increase the wages for our workers as a result of changes in the labor market conditions
or industry practices.</span></p><div>

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

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

</div><!-- Field: Page; Sequence: 33; 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 -->30<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
expect that the wage levels of our employees will continue to be determined in accordance with the prevailing market rates in the relevant
regions in the PRC as well as the performance of the relevant employees in the foreseeable future. There is no assurance that we will
not face labor unrest or we do not have to adjust the wages upward for our employees demanding higher wages from us. Labor unrest will
disrupt our services and the higher wages will result in increased services costs for us. Should we fail to increase our service prices
to offset the additional labor costs in a timely manner or fail to manage labor shortage or labor unrest, our business, operation and
financial performance could be adversely affected.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#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"><b><i>Our
customers could become our competitors.</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Many
of our customers are logistic companies which have the capability and financial resources to diversity and own their own vehicle fleet.
These customers may also continue to evaluate whether to own their vehicle fleet or engage other transportation companies to provide
the logistics services. In the event that our customers own their vehicle fleet, such customers could reduce or eliminate their need
of our trucking services, which would subsequently result in a reduction of our revenue and would adversely affect our business and results
of operations.</span></p><div>

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




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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
may not be familiar with new regions or markets we enter and may not be successful in offering new products and services or maintain
our current growth.</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">The
growth of our company was based on the services we currently provided to existing markets. We may expand our business and enter other
regional markets in the future. However, we may be unable to replicate our initial success in new markets. In expanding our business,
we may enter markets in which we have limited, or no, experience. We may not be familiar with the local business and regulatory environment
and we may fail to attract a sufficient number of customers due to our limited presence in that region. In addition, competitive conditions
in new markets may be different from those in our existing markets and may make it difficult or impossible for us to generate high income
in these new markets. If we are unable to manage these and other difficulties in our expansion into other regions in China, our prospects
and results of operations may be adversely affected.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#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"><b><i>Our
results of operations may fluctuate significantly and may not fully reflect the underlying performance of 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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Our
results of operations, including our operating revenue, expenses and other key metrics, may vary significantly in the future and period-to-period
comparisons of our operating results may not be meaningful. Accordingly, the results for any one quarter are not necessarily an indication
of future performance. Our financial results may fluctuate due to a variety of factors, some of which are outside of our control and,
as a result, may not fully reflect the underlying performance of our business. Fluctuation in our operational results may adversely affect
the price of our ordinary shares. Factors that may cause fluctuations in our quarterly results include:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">our ability to attract new customers, maintain
    relationships with existing customers, and expand into new territories in China;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">the amount and timing of operating expenses
    related to acquiring customers and the maintenance and expansion of our business, operations and infrastructure;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">general economic, industry and market conditions
    in China;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">our emphasis on customer experience instead
    of near-term growth; and</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">the timing of expenses related to the development
    or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired technologies or
    businesses.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#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"><b><i>If
we fail to promote and maintain our brand in an effective and cost-efficient way, our business and results of operations may be harmed.</i></b></span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
believe that developing and maintaining awareness of our brand effectively is critical to attracting new and retaining existing customers.
Our efforts to build our brand have caused us to incur significant expenses, and it is likely that our future marketing efforts will
require us to incur significant additional expenses. These efforts may not result in increased revenues in the immediate future or at
all and, even if they do, any increases in revenues may not offset the expenses incurred. If we fail to promote and maintain our brand,
while incurring substantial expenses, our results of operations and financial condition would be adversely affected, which may impair
our ability to grow our business.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>If
labor costs in the PRC increase substantially, our business and costs of operations may be adversely affected.</i></b></span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">In
recent years, the Chinese economy has experienced inflation and labor cost increases. Average wages are projected to continue to increase.
Further, under PRC law we are required to pay various statutory employee benefits, including pensions, housing funds, medical insurance,
work-related injury insurance, unemployment insurance and maternity insurance to designated government agencies for the benefit of our
employees. The relevant government agencies may examine whether an employer has made adequate payments to the statutory employee benefits,
and those employers who fail to make adequate payments may be subject to late payment fees, fines and/or other penalties. We expect that
our labor costs, including wages and employee benefits, will continue to increase. If we are unable to control our labor costs or pass
such increased labor costs on to our customers by increasing the price of our products and services, our financial condition and results
of operations may be adversely affected.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></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: 34; 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 -->31<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>Competition
for our employees is intense, and we may not be able to attract and retain the highly skilled employees needed to support 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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">As
we continue to experience growth, we believe our success depends on the efforts and talents of our employees, including experienced drivers,
financial personnel and marketing professionals. Our future success depends on our continued ability to attract, develop, motivate and
retain highly qualified and skilled employees. Competition for highly skilled 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. Many 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.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">In
addition, we invest significant time and expense in training our employees, which increases their value to competitors who may seek to
recruit them. If we fail to retain our employees, we could incur significant expenses in hiring and training their replacements, and
the quality of our services and our ability to serve customers could diminish, resulting in a material adverse effect on our business.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#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"><b><i>Our
business depends on the continued efforts of our senior management, particularly Mr. Jinlong Yang. If Mr. Yang, or one or more other
of our key executives, were unable or unwilling to continue in their present positions, our business may be severely disrupted.</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Our
business operations depend on the continuing services of our senior management, particularly Mr. Jinlong Yang, our Chairman and Chief
Executive Officer, and our other executive officers named in this annual report. While we have provided different incentives to our management,
we cannot assure you that we can continue to retain their services. If one or more of our key executives were unable or unwilling to
continue in their present positions, we may not be able to replace them easily or at all, our future growth may be constrained, our business
may be severely disrupted and our financial condition and results of operations may be materially and adversely affected, and we may
incur additional expenses to recruit, train and retain qualified personnel. In addition, although we have entered into confidentiality
and non-competition agreements with our key executives of our subsidiaries and VIEs in China, there is no assurance that any member of
our management team will not join our competitors or form a competing business. If any dispute arises between us and our current or former
officers, we may have to incur substantial costs and expenses in order to enforce such agreements in China or we may be unable to enforce
them 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">&#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"><b><i>Our
executive officers have limited prior experience in operating a U.S. public company, and their inability to operate the public company
aspects of our business could harm us.</i></b></span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Our
executive officers have limited experience in operating a U.S. public company, which makes our ability to comply with applicable laws,
rules and regulations uncertain. Our failure to comply with all laws, rules and regulations applicable to U.S. public companies could
subject us or our management to regulatory scrutiny or sanction, which could harm our reputation and share price.</span></p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
plan to evaluate and consider strategic transactions, combinations, acquisitions or alliances to enhance our existing business or develop
new products and services. These transactions could be material to our financial condition and results of operations if consummated.
If we are able to identify an appropriate business opportunity, we may not be able to successfully consummate the transaction and, even
if we do consummate the transaction, we may be unable to obtain the benefits or avoid the difficulties and risks of such a transaction.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Any
acquisition or alliance will involve risks commonly encountered in business relationships, including:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">difficulties in assimilating and integrating
    the operations, personnel, systems, data, technologies, products and services of the acquired business;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">inability of the acquired technologies,
    products or businesses to achieve expected levels of revenue, profitability, productivity or other benefits;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">difficulties in retaining, training, motivating
    and integrating key personnel;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">diversion of management&#8217;s time and
    resources from our normal daily operations;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">difficulties in successfully incorporating
    licensed or acquired technology and rights into our products;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">difficulties in retaining relationships
    with customers, employees and suppliers of the acquired business;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">regulatory risks; and</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">liability for activities of the acquired
    business before the acquisition, including patent, copyright and trademark infringement claims, violations of laws, commercial disputes,
    tax liabilities and other known and unknown liabilities.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#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 -->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"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Any
future acquisitions or alliances may not be successful. Furthermore, we may not benefit from our business strategy, nor generate sufficient
revenue to offset the associated costs or may otherwise not result in the intended benefits. In addition, we cannot assure you that any
future acquisition of, or alliance with respect to, new businesses or technology will lead to the successful development of new or enhanced
services or that any new or enhanced services, if developed, will achieve market acceptance or prove to be profitable.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
may need additional capital, and financing may not be available on terms acceptable to us, or at all.</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Although
our current cash and cash equivalents, anticipated cash flows from operating activities will be sufficient to meet our anticipated working
capital requirements and capital expenditures in the ordinary course of business, there is a risk that we may need additional cash resources
in the future to fund our growth plans or if we experience adverse changes in business conditions or other developments. We may also
need additional cash resources in the future if we find and wish to pursue opportunities for new investments, acquisitions, capital expenditures
or similar actions. If we determine that our cash requirements exceed the amount of cash and cash equivalents we have on hand at the
time, we may seek to issue equity or debt securities or obtain credit facilities. We cannot assure you that financing will be available
in amounts or on terms acceptable to us, if at all. The issuance and sale of additional equity would result in further dilution to our
shareholders.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">default and foreclosure on our assets if
    our operating revenue is insufficient to repay debt obligations;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">acceleration of obligations to repay the
    indebtedness (or other outstanding indebtedness), even if we make all principal and interest payments when due, if we breach any
    covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">our inability to obtain necessary additional
    financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">diverting a substantial portion of cash
    flow to pay principal and interest on such debt, which would reduce the funds available for expenses, capital expenditures, acquisitions
    and other general corporate purposes; and</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: top">
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">creating potential limitations on our flexibility
    in planning for and reacting to changes in our business and in the industry in which we operate.</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">The
occurrence of any of these risks could adversely affect our operations or financial condition.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#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"><b><i>We
will be subject to changing laws, rules and regulations in the U.S. regarding regulatory matters, corporate governance and public disclosure
that will increase both our costs and the risks associated with non-compliance.</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Following
this annual report, we will be subject to rules and regulations by various governing bodies and self-regulatory organizations, including,
for example, the SEC and The Nasdaq Stock Market, which are charged with the protection of investors and the oversight of companies whose
securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply with new and
changing laws and regulations have resulted in and are likely to continue to result in increased general and administrative expenses
and a diversion of management time and attention from revenue-generating activities to compliance activities.</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">Moreover,
because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time
as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs
necessitated by ongoing revisions to our disclosure and governance practices. If we fail to address and comply with these regulations
and any subsequent changes, we may be subject to penalty and our business may be harmed.</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"><b><i>Our
business is subject to risks related to lawsuits and other claims brought by our clients or business partners. If the outcomes of these
proceedings are adverse to us, it could have a material adverse effect on our business, results of operations and financial condition.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
are subject to lawsuits and other claims in the ordinary course of our business. We are currently not involved in any lawsuits with any
of our customers. However, claims arising out of actual or alleged violations of law could be asserted against us by individuals, companies,
governmental or other entities in civil, administrative or criminal investigations and proceedings. These claims could be asserted under
a variety of laws and regulations, including but not limited to contract laws, consumer protection laws or regulations, intellectual
property laws, environmental laws, and labor and employment laws. These actions could expose us to adverse publicity and to monetary
damages, fines and penalties, as well as suspension or revocation of licenses or permits to conduct business. Even if we eventually prevail
in these matters, we could incur significant legal fees or suffer reputational harm, which could have a material adverse effect on our
business and results of operations as well as our future growth and prospects.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
are subject to extensive environmental laws and regulations, and the costs related to compliance with, or our failure to comply with,
existing or future laws and regulations, could adversely affect the business and results of operations.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Our
operations are subject to national and local laws and regulations relating to the protection of the environment. Sanctions for noncompliance
may include revocation of permits, corrective action orders, significant administrative or civil penalties and criminal prosecution.
In recent years, the PRC government has strengthened the regulations of environmental protection by enacting new laws and modifying existing
laws. Our business involves environmental management and issues typically associated with fuel consumption. We have not received any
non-compliance notice or warning from the government regarding environmental violations. However, the PRC government may pass new legislation
or amend current laws and regulations and set higher requirements and standards for vehicle operations. Our cost of complying with environmental
laws and regulations may increase and we may assign more personnel for environmental compliance. As a result, our financial conditions
and results of operation may be materially and adversely affected.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><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></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">In
accordance with the relevant laws and regulations in jurisdictions in which we operate, we are required to maintain various approvals,
licenses and permits to operate our business, including but not limited to business license, road transport business license. These approvals,
licenses and permits are obtained upon satisfactory compliance with, among other things, the applicable laws and regulations.</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">We
were engaged in the business of air freight as an international freight forwarding agency and had entered into master agreements with
the subcontractors. Due to the COVID-19 pandemic, this particular business has been suspended and no significant revenue was recorded
since the beginning of 2020. We have not obtained the relevant certificate for this type of business, or completed filings with the competent
governmental agencies. All of our subcontractors are qualified to conduct relevant business activities. According to the Detailed Rules
for Implementing the Regulations of the People&#8217;s Republic of China on the Administration of the International Freight Forwarding
Industry, entities engaging in international freight forwarding operations which are in violation of the provisions of the Regulations
of the People&#8217;s Republic of China on the Administration of the International Freight Forwarding Industry and the present Detailed
Rules are subject to bans against any illegal operational activities imposed by governmental agencies that are in charge of the trade
sector. The agencies for industry and commerce shall impose penalties on such entities in accordance with the provisions of the relevant
laws and administrative regulations, and the agencies in charge of the trade sector shall announce the ban thereof. The relevant local
agencies of commerce shall file a record for archival purposes with the MOFCOM after making the announcement. Such entities are prohibited
from applying for handling international freight forwarding operations independently or jointly with other applicants for five years.
Meanwhile, Implementing Regulations of the Customs of the People&#8217;s Republic of China on Administrative Penalties, which was promulgated
in 2004 by the State Council, further provides that in case anyone undertakes customs declaration business without going through customs
registration or fails to obtain the customs declaration practicing qualification, it shall be banned from conducting the business activities,
the illegal gains shall be confiscated, and a fine of less than RMB 100,000 (approximately $14,544) may be imposed. Although we have
suspended conducting this type of business for now, we face the risk of violating the foregoing PRC regulations. We may also face the
risk of breaching the agreements we have entered into with our customers or subcontractors for air freight services and be banned from
conducting this type of business and subject to punishments or confiscation of the gains derived from related business. As of the date
of this annual report, we have not received any order or penalty from any governmental authorities but we cannot assure you that we will
not be subject to any order or penalties for the lack of relevant qualifications before we complete necessary registration and filing
requirements.</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">As
of the date of this annual report, we have obtained the business license and road transport business license, but there can be no assurance
that we will be able to obtain, renew and/or convert all of the approvals, licenses and permits required for our existing business operations
upon their expiration in a timely manner or duly complete necessary registration or filings in the relevant governmental authorities
for any of our new business, which could adversely affect our business operations.</span></p><div>

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

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">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 PRC subsidiaries and
VIEs hold the bulk of the assets that are important to our business operations. If any of our PRC subsidiaries or VIEs gets involved
in 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 or adversely affect our business, financial condition and
results of operations.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>Any
failure to protect our own intellectual property rights could impair our brand, negatively impact our business or both.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
currently own 6 PRC patents related to technologies used in connection with trucking services, including 1 invention patent and 5 utility
patents. We also own one PRC trademark and 17 PRC copyright registrations, including 1 art-work copyright and 16 software copyrights.
Our intellectual property rights are key to our operations and business prospects.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Our
success and ability to compete also depend in part on protecting our own intellectual property. We rely on a combination of patents,
copyrights, trade secrets, trademarks and other rights, as well as confidentiality procedures and contractual provisions to protect our
proprietary technology, processes and other intellectual property. However, the steps we take to protect our intellectual property rights
may be inadequate. We have only filed patent applications in China and we have not acquired any related international patent rights by
filing pursuant to the Patent Cooperation Treaty. Our patents are under no protections outside of China.</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">Third
parties may seek to challenge, invalidate or circumvent our patents, copyrights, trade secrets, trademarks and other rights or applications
for any of the foregoing. In order to protect our intellectual property rights, we may be required to spend significant resources. Litigation
brought to protect and enforce our intellectual property rights could be costly, time-consuming and distracting to management. Our failure
to secure, protect and enforce our intellectual property rights could adversely affect our brand and impact our business.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
may be sued by third parties for alleged infringement of their proprietary rights, which could harm our business.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Our
competitors, as well as other entities and individuals, may own or claim to own intellectual property relating to our industry. From
time to time, a third-party provider may claim that we are infringing on their intellectual property rights. We may, however, be unaware
of the intellectual property rights that others may claim over some or all of our applications, technology or services. Any claims or
litigation could cause us to incur significant expenses and, if successfully asserted against us, could require that we pay substantial
damages or ongoing royalty payments, restrict us from conducting our business or require that we comply with other unfavorable terms.
We may also be obligated to indemnify parties or pay substantial settlement costs, including royalty payments, in connection with any
such claim or litigation and to obtain licenses, modify applications or refund fees, which could be costly. Even if we were to prevail
in such a dispute, any litigation regarding our intellectual property could be costly and time-consuming and divert the attention of
our management from our business operations.</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
have identified material weaknesses in our internal accounting controls, and if we fail to implement and maintain an effective system
of internal controls or fail to remediate the material weaknesses in our internal control over financial reporting that have been identified,
we may be unable to accurately report our results of operations or prevent fraud or fail to meet our reporting obligations, and customer
confidence and the market price of our ordinary shares may be materially and adversely affected.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
are subject to the reporting requirements of the Exchange Act of 1934, or Exchange Act, the Sarbanes-Oxley Act of and the rules and regulations
of the Nasdaq Stock Market. We are not required to provide a report of management&#8217;s assessment on our internal control over financial
reporting in this annual report due to a transition period established by the rules of the SEC for newly public companies. In addition,
we are not required to include an attestation report on internal control over financial reporting issued by our independent registered
public accounting firm in this annual report, since we are an emerging growth company as defined under the JOBS Act. However, in the
course of auditing our consolidated financial statements included in this annual report, we and our independent registered public accounting
firm identified one material weakness in our internal control over financial reporting. As defined in standards established by the Public
Company Accounting Oversight Board (&#8220;PCAOB&#8221;), a &#8220;material weakness&#8221; is a deficiency, or a combination of deficiencies,
in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual
or interim financial statements will not be prevented or detected on a timely basis. The material weakness identified relates to our
lack of sufficient skilled staff with U.S. GAAP knowledge and the SEC reporting knowledge for the purpose of financial reporting as well
as the lack in formal accounting policies and procedures manual to ensure proper financial reporting in accordance with U.S. GAAP and
SEC reporting requirements.</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">We
have already taken some steps and have continued to implement measures to remediate the material weakness identified, including but not
limited to (i) streamline our accounting department structure and enhance our staff&#8217;s U.S. GAAP expertise on a continuous basis;
(2) hire a new reporting manager who has sufficient expertise in U.S. GAAP to improve the quality of U.S. GAAP reports; (3) make an overall
assessment on the current finance and accounting resources and have plans to hire new finance team members with U.S. GAAP qualification
in order to strengthen our U.S. GAAP reporting framework; (4) participate in trainings and seminars provided by professional services
firms on a regular basis to gain knowledge on regular accounting/SEC reporting updates; and (5) provide internal training to our current
accounting team on US GAAP knowledge. We are also in the process of completing a systematic accounting manual for US GAAP and financial
closing process. However, we cannot assure you that we will not identify additional material weaknesses or significant deficiencies in
the future. In addition, if we are unable to meet the requirements of Section 404 of the Sarbanes-Oxley Act, our common shares may not
be able to remain listed on the NASDAQ Capital Market.</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">Section
404 of the Sarbanes-Oxley Act of 2002 requires that we include a report of management on our internal control over financial reporting
in our annual report on Form 20-F beginning with our annual report for the fiscal year ending December 31, 2020. In addition, once we
cease to be an &#8220;emerging growth company&#8221; as such term is defined under the JOBS Act, our independent registered public accounting
firm must attest to and report on the effectiveness of our internal control over financial reporting. Our management may conclude that
our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control
over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing,
may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented,
designed, operated or reviewed, or if it interprets the relevant requirements differently from us. In addition, as we are a public company,
our reporting obligations may place a significant strain on our management, operational and financial resources and systems for the foreseeable
future. We may be unable to timely complete our evaluation testing and any required remediation.</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">During
the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404 of the Sarbanes-
Oxley Act of 2002, we may identify other weaknesses and deficiencies in our internal control over financial reporting. In addition, if
we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended
from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting.
If we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial
statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial
information. This could in turn limit our access to capital markets, harm our results of operations and lead to a decline in the trading
price of our shares. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or
misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations
and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.</span></p><div>

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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"><b><i>Certain
data and information in this annual report were obtained from third-party sources and were not independently verified by us.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
have engaged Frost &amp; Sullivan to prepare a commissioned industry report that analyzes the PRC transportation industry, which we refer
to as the &#8220;Frost&amp; Sullivan Report&#8221;. Information and data relating to the PRC transportation industry have been derived
from Frost &amp; Sullivan Report. Statistical data included in the Frost &amp; Sullivan Report also include projections based on a number
of assumptions. The transportation industry may not grow at the rate projected by market data, or at all. Any failure of the PRC transportation
industry to grow at the projected rate may have a material adverse effect on our business and the market price of our ordinary shares.
Furthermore, if any one or more of the assumptions underlying the market data is later found to be incorrect, actual results may differ
from the projections based on these assumptions.</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">We
have not independently verified the data and information contained in the Frost &amp; Sullivan Report or any third-party publications
and reports Frost &amp; Sullivan has relied on in preparing its report. Data and information contained in such third-party publications
and reports may be collected using third-party methodologies, which may differ from the data collection methods used by us. In addition,
these industry publications and reports generally indicate that the information contained therein is believed to be reliable, but do
not guarantee the accuracy and completeness of such information.</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"><b><i>Insurance
and claims expenses could significantly reduce our earnings.</i></b></span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Although
we maintain auto insurance for our vehicles, our future insurance and claims expenses might exceed historical levels, which could reduce
our earnings. We maintain a high deductible for a portion of our claims exposure resulting from auto liability. Estimating the number
and severity of claims, as well as related judgment or settlement amounts is inherently difficult. This, along with legal expenses, incurred
but not reported claims and other uncertainties can cause unfavorable differences between actual claim costs and our reserve estimates.
We reserve for anticipated losses and expenses and periodically evaluate and adjust our claims reserves to reflect our experience. However,
ultimate results may differ from our estimates, which could result in losses over our reserved amounts.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
maintain insurance with licensed insurance carriers above the amounts which we retain. Although we believe our aggregate auto insurance
limits should be sufficient to cover reasonably expected claims, it is possible that the amount of one or more claims could exceed our
aggregate coverage limits. If any claim were to exceed our coverage, we would bear the excess, in addition to our other retained amounts.
Insurance carriers have raised premiums for many businesses, including transportation companies. As a result, our insurance and claims
expense could increase, or we could raise our deductible when our policies are renewed or replaced. Our operating results and financial
condition could be materially and adversely affected if (i) cost per claim, premiums, or the number of claims significantly exceeds our
estimates, (ii) we experience a claim in excess of our coverage limits, (iii) our insurance carriers fail to pay on our insurance claims
or (iv) we experience a claim for which coverage is not 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">&#160;</span></p><div>

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    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#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"><b><i>Any
failure to pay the full amount of taxes may subject us to penalty and materially and adversely affect our business, financial condition
and results of operation.</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">In
accordance with the Law of the PRC on the Administration of Tax Collection and its Implementation Regulations, where a taxpayer or a
withholding agent fails to pay or underpays the amount of tax that should be paid or remitted within the specified time, the tax authorities
shall order the taxpayer or withholding agent to pay or remit the tax within the specified time limit, and impose a penalty for late
payment on a daily basis at the rate of 0.05% of the amount of tax in arrears from the date the tax payment is defaulted. If the taxpayer
or withholding agent still fails to do so on the expiration of the time limit, the tax authorities may recover such unpaid taxes by adopting
compulsory enforcement measures, and impose a fine of not less than 50 percent but not more than five times the amount of tax the taxpayer
or withholding agent fails to pay or underpays or fails to remit. Furthermore, the taxation authorities shall also announce the tax payments
defaulted by taxpayers regularly. See &#8220;10.E. Taxation&#8221; &#8211; Tax Collection and Payment.&#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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Affected
by polity factors such as credit tightening, some of our accounts receivable that met the collection conditions have not been recovered
on time, which has an adverse impact on our liquidity. As of December 31, 2022, the Company and its VIEs and subsidiaries owed taxes
in the amount of $5,278,436.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">As
of the date of this annual report, we have not received any order or notice from the local tax authorities to set a specific time limit
for us to pay the outstanding taxes referenced above, or impose any penalty for the late tax payment, but we cannot assure you that we
will not be subject to any order to pay the taxes within a specific time limit. Despite our efforts to minimize the impact of this matter
on us, there are uncertainties whether we will have enough funds to make the tax payment within the time limit set by the tax authorities.
If we fail to do so, the tax authorities may recover such unpaid taxes and late payment fees by adopting compulsory enforcement measures
such as withholding the taxes from our bank account, or sealing up, auctioning or disposing of our properties. In addition, the tax authorities
may even impose a fine on us as prescribed by the laws. If any of the above were to occur, our business, operations and financial position
would be materially and adversely affected.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#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"><b><i>We
do not have any business insurance coverage.</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Insurance
companies in China currently do not offer an extensive array of insurance products as insurance companies in more developed economies
do. Currently, we do not have any business liability or disruption insurance, except auto insurances, to cover our operations. We have
determined that the costs of insuring for these risks and the difficulties associated with acquiring such insurance on commercially reasonable
terms make it impractical for us to have such insurance. Any uninsured business disruptions may result in our incurring substantial costs
and the diversion of resources, which could have an adverse effect on our results of operations and financial condition.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
may have exposure to greater than anticipated tax liabilities.</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
are subject to enterprise income tax, value-added tax, and other taxes in each province and city in China where we have operations. Our
tax structure is subject to review by various local tax authorities. The determination of our provision for income tax and other tax
liabilities requires significant judgment. In the ordinary course of our business, there are many transactions and calculations where
the ultimate tax determination is uncertain. Although we believe our estimates are reasonable, the ultimate decisions by the relevant
tax authorities may differ from the amounts recorded in our financial statements and may materially affect our financial results in the
period or periods for which such determination is made.</span></p><div>

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

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#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"><b>Risks
Related to Our Securities</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">&#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"><b><i>We
may not maintain our listing on Nasdaq which could limit investors&#8217; ability to make transactions in our securities and subject
us to additional trading restrictions.</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Our
ordinary shares are listed on Nasdaq. We cannot assure you that our ordinary shares will continue to be listed on Nasdaq in the future.
In order to continue listing our securities on Nasdaq, we must maintain certain financial, distribution and share price levels. Generally,
we must (i) maintain a minimum amount in shareholders&#8217; equity (generally above $2,500,000), maintain a minimum market value of
listed securities (generally above $35,000,000) or have a minimum net income from operations for the prior year of for two of the preceding
years (generally above $500,000); and (ii) a minimum number of publicly held shares (generally greater than 500,000) and a minimum number
of public shareholders (generally greater than 300 shareholders). Our ordinary shares also cannot have a bid price of less than $1.00.
Moreover, we must comply with certain listing standards regarding the independence of our board of directors and members of our audit
committee. We intend to fully comply with these requirements, but we may not continue to be able to meet these requirements in the future.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">If
Nasdaq delists our securities from trading on its exchange and we are not able to list our securities on another national securities
exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material
adverse consequences, including:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">a limited availability of market quotations
    for our securities;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">reduced liquidity for our securities;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">a determination that our ordinary shares
    is a &#8220;penny stock&#8221; which will require brokers trading in our ordinary shares to adhere to more stringent rules and possibly
    result in a reduced level of trading activity in the secondary trading market for our securities;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">a limited amount of news and analyst coverage;
    and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">a decreased ability to issue additional
    securities or obtain additional financing in the future.</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">The
National Securities Markets Improvement Act of 1996, which is a U.S. federal statute, prevents or preempts the states from regulating
the sale of certain securities, which are referred to as &#8220;covered securities.&#8221; Because we expect that our ordinary shares
will be listed on Nasdaq, such securities will be covered securities. Although the states are preempted from regulating the sale of our
securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding
of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. Further, if we were
no longer listed on Nasdaq, our securities would not be covered securities and we would be subject to regulations in each state in which
we offer our 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">&#160;</span></p><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>The
trading price of our ordinary shares may be volatile, which could result in substantial losses 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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">The
trading price of our securities may be volatile and could fluctuate widely due to factors beyond our control. This may happen because
of the broad market and industry factors, like the performance and fluctuation of the market prices of other companies with business
operations located mainly in China that have listed their securities in the United States. A number of Chinese companies have listed
or are in the process of listing their securities on U.S. stock markets. The securities of some of these companies have experienced significant
volatility, including price declines in connection with their initial public offerings. The trading performances of these Chinese companies&#8217;
securities after their offerings may affect the attitudes of investors toward Chinese companies listed in the United States in general
and consequently may impact the trading performance of our ordinary shares, regardless of our actual operating performance.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">In
addition to market and industry factors, the price and trading volume for our ordinary shares may be highly volatile for factors specific
to our own operations, including the following:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">variations in our revenues, earnings, cash
    flow and data related to our user base or user engagement;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">announcements of new investments, acquisitions,
    strategic partnerships or joint ventures by us or our competitors;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">announcements of new product and service
    offerings, solutions and expansions by us or our competitors;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">changes in financial estimates by securities
    analysts;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">detrimental adverse publicity about us or
    our industry;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">additions or departures of key personnel;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">release of lock-up or other transfer restrictions
    on our outstanding equity securities or sales of additional equity securities; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">potential litigation or regulatory investigations.</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Any
of these factors may result in large and sudden changes in the volume and price at which our ordinary shares will trade.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">In
the past, shareholders of public companies have often brought securities class action suits against those companies following periods
of instability in the market price of their securities. If we were involved in a class action suit, it could divert a significant amount
of our management&#8217;s attention and other resources from our business and operations and require us to incur significant expenses
to defend the suit, which could harm our results of operations. Any such class action suit, whether or not successful, could harm our
reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be
required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.</span></p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>If
securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations
regarding our ordinary shares, the market price for our ordinary shares and trading volume could decline.</i></b></span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">The
trading market for our ordinary shares will be influenced by research or reports that industry or securities analysts publish about our
business. If one or more analysts who cover us downgrade our ordinary shares, the market price for our ordinary shares would likely decline.
If one or more of these analysts cease to cover us or fail to regularly publish reports on us, we could lose visibility in the financial
markets, which in turn could cause the market price or trading volume for our ordinary shares to decline.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>Techniques
employed by short sellers may drive down the market price of the ordinary 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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Short
selling is the practice of selling securities that the seller does not own but rather has borrowed from a third party with the intention
of buying identical securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value
of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects
to pay less in that purchase than it received in the sale. As it is in the short seller&#8217;s interest for the price of the security
to decline, many short sellers publish, or arrange for the publication of, negative opinions and allegations regarding the relevant issuer
and its business prospects in order to create negative market momentum and generate profits for themselves after selling a security short.
These short attacks have, in the past, led to selling of shares in the market. If we were to become the subject of any unfavorable allegations,
whether such allegations are proven to be true or untrue, we could have to expend a significant amount of resources to investigate such
allegations and/or defend ourselves. While we would strongly defend against any such short seller attacks, we may be constrained in the
manner in which we can proceed against the relevant short seller by principles of freedom of speech, applicable state law or issues of
commercial confidentiality.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>Because
we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of our ordinary shares for a return
on your investment.</i></b></span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
currently intend to retain all of our available funds and any future earnings to fund the development and growth of our business. As
a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our
ordinary shares as a source for any future dividend income.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Our
board of directors has complete discretion as to whether to distribute dividends, subject to certain requirements of Cayman Islands law.
In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our
board of directors. Under Cayman Islands law, a Cayman Islands company may pay a dividend out of either profit or share premium account,
provided that in no circumstances may a dividend be paid if this would result in the company being unable to pay its debts as they fall
due in the ordinary course of business. Even if our board of directors decides to declare and pay dividends, the timing, amount and form
of future dividends, if any, will depend on, among other things, our future results of operations and cash flow, our capital requirements
and surplus, the amount of distributions, if any, received by us from our subsidiaries and VIEs, our financial condition, contractual
restrictions and other factors deemed relevant by our board of directors. Accordingly, the return on your investment in our securities
will likely depend entirely upon any future price appreciation of our ordinary shares. There is no guarantee that our ordinary shares
will appreciate in value or even maintain the price at which you purchased our ordinary shares. You may not realize a return on your
investment in our ordinary shares and you may even lose your entire investment.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>If
we are classified as a passive foreign investment company, United States taxpayers who own our securities may have adverse United States
federal income tax consequences.</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">A
non-U.S. corporation such as ourselves will be classified as a passive foreign investment company, which is known as a PFIC, for any
taxable year if, for such year, either</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">At least 75% of our gross income for the
    year is passive income; or</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The average percentage of our assets (determined
    at the end of each quarter) during the taxable year which produces passive income or which are held for the production of passive
    income is at least 50%.</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">&#160;</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Passive
income generally includes dividends, interest, rents, royalties (other than rents or royalties derived from the active conduct of a trade
or business) and gains from the disposition of passive assets.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">If
we are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. taxpayer who
holds our securities, the U.S. taxpayer may be subject to increased U.S. federal income tax liability and may be subject to additional
reporting requirements.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">With
any assets held for the production of passive income, it is possible that, for our current taxable year or for any subsequent year, more
than 50% of our assets may be assets which produce passive income. We will make this determination following the end of any particular
tax year. Although the law in this regard is unclear, we treat our consolidated affiliated entities as being owned by us for United States
federal income tax purposes, not only because we exercise effective control over the operation of such entities but also because we are
entitled to substantially all of their economic benefits, and, as a result, we consolidate their operating results in our consolidated
financial statements. For purposes of the PFIC analysis, in general, a non-U.S. corporation is deemed to own its pro rata share of the
gross income and assets of any entity in which it is considered to own at least 25% of the equity by value.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">For
a more detailed discussion of the application of the PFIC rules to us and the consequences to U.S. taxpayers if we were determined to
be a PFIC, see &#8220;10.E. Taxation&#8221; &#8212; Passive Foreign Investment Company.&#8221;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#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"><b><i>The
amended and restated memorandum and articles of association contain anti-takeover provisions that could have a material adverse effect
on the rights of holders of our securities.</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Our
amended and restated memorandum and articles of association contain provisions which may discourage, delay or prevent a change-of-control
of our company or management that shareholders may consider favorable, including provisions that authorize our board of directors, without
further action by our shareholders, to issue preferred shares in one or more series and to fix their designations, powers, preferences,
privileges, and other rights, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences,
any or all of which may be greater than the rights associated with our ordinary shares. Preferred shares could be issued quickly with
terms calculated to delay or prevent a change in control of our company or make removal of management more difficult. If our board of
directors decides to issue preferred shares, the price of our ordinary shares may fall and the voting and other rights of the holders
of our ordinary shares underlying the ordinary shares may be materially and adversely affected.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#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"><b><i>Our
principal shareholders have substantial influence over our company. Their interests may not be aligned with the interests of our other
shareholders, and they could prevent or cause a change of control or other transactions.</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">As
of the date of this annual report, Mr. Jinlong Yang, our founder and chairman of our board of directors, beneficially owns an aggregate
of 23.5% of our outstanding ordinary shares.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Accordingly,
our executive officers and directors, together with our existing shareholders, could have significant influence in determining the outcome
of any corporate transaction or other matter submitted to the shareholders for approval, including mergers, consolidations, the election
of directors and other significant corporate actions. In cases where their interests are aligned and they vote together, these shareholders
will also have the power to prevent or cause a change in control. Without the consent of some or all of these shareholders, we may be
prevented from entering into transactions that could be beneficial to us or our minority shareholders. In addition, our directors and
officers could violate their fiduciary duties by diverting business opportunities from us to themselves or others. The interests of our
largest shareholders may differ from the interests of our other shareholders. The concentration in the ownership of our ordinary shares
may cause a material decline in the value of our ordinary shares. For more information regarding our principal shareholders and their
affiliated entities, see &#8220;7.A. 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">&#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"><b><i>As
a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance
matters that differ significantly from Nasdaq corporate governance listing standards. These practices may afford less protection to shareholders
than they would enjoy if we complied fully with Nasdaq corporate governance listing standards.</i></b></span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">As
an exempted company incorporated in the Cayman Islands that is listed on Nasdaq, we are subject to Nasdaq corporate governance listing
standards. However, Nasdaq rules permit a foreign private issuer like us to follow the corporate governance practices of its home country.
Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from Nasdaq corporate
governance listing standards. Currently, we do not plan to rely on the home country practice with respect to our corporate governance.
However, if we choose to follow home country practice in the future, our shareholders may be afforded less protection than they otherwise
would enjoy under Nasdaq corporate governance listing standards applicable to U.S. domestic issuers.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>You
may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because
we are incorporated under Cayman Islands 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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
are an exempted company incorporated under the laws of the Cayman Islands with limited liability. Our corporate affairs are governed
by our amended and restated memorandum and articles of association, the Companies Act (Revised) of the Cayman Islands and the common
law of the Cayman Islands. The rights of shareholders to take action against our directors and us, actions by minority shareholders and
the fiduciary duties of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands.
The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as
from the English common law, which are generally of persuasive authority, but are not binding, on a court in the Cayman Islands. The
rights of our shareholders and the fiduciary duties of our directors under Cayman Islands law are not as clearly established as they
would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different
body of securities laws than the United States, and provide significantly less protection to investors. In addition, Cayman Islands companies
may not have the standing to initiate a shareholder derivative action in a federal court of the United States. There is no statutory
recognition in the Cayman Islands of judgments obtained in the United States, although the courts of the Cayman Islands will in certain
circumstances, recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Shareholders
of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records (other than
the memorandum and articles of association) or to obtain copies of lists of shareholders of these companies. Our directors have discretion
under our second amended and restated memorandum and articles of association we expect to adopt, to determine whether or not, and under
what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders.
This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder resolution
or to solicit proxies from other shareholders in connection with a proxy contest.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Certain
corporate governance practices in the Cayman Islands, which is our home country, differ significantly from requirements for companies
incorporated in other jurisdictions such as the U.S. Currently, we do not plan to rely on home country practice with respect to any corporate
governance matter. However, if we choose to follow our home country practice in the future, our shareholders may be afforded less protection
than they otherwise would under rules and regulations applicable to U.S. domestic issuers.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">As
a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken
by our management, members of the board of directors or controlling shareholders than they would as public shareholders of a company
incorporated in the United States. For a discussion of significant differences between the provisions of the Companies Act and the laws
applicable to companies incorporated in the United States and their shareholders, see &#8220;10.B. Memorandum and Articles of Association
&#8212; Material Differences between U.S. Corporate Law and British Virgin Islands Corporate Law.&#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">&#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"><b><i>Certain
judgments obtained against us by our shareholders may not be enforceable.</i></b></span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
are a Cayman Islands exempted company and substantially all of our assets are located outside of the United States. All of our current
operations are conducted in China. In addition, all of our current directors and officers are nationals and residents of countries other
than the United States. Substantially all of the assets of these persons are located outside the United States. As a result, it may be
difficult for a shareholder to effect service of process within the United States upon these persons or to enforce against us or them
judgments obtained in the United States courts, including judgments predicated upon the civil liability provisions of the securities
laws of the United States or any state in the United States. Even if you are successful in bringing an action of this kind, the laws
of the Cayman Islands and of China may render you unable to enforce a judgment against our assets or the assets of our directors and
officers. For more information regarding the relevant laws of the Cayman Islands and China. As a result of all of the above, our shareholders
may have more difficulties in protecting their interests through actions against us or our officers, directors, or major shareholders
than would shareholders of a corporation incorporated in a jurisdiction in the United States.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
are an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements.</i></b></span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
are an &#8220;emerging growth company,&#8221; as defined in the JOBS Act, and we may take advantage of certain exemptions from various
requirements applicable to other public companies that are not emerging growth companies including, most significantly, not being required
to comply with the auditor attestation requirements of Section 404 of Sarbanes-Oxley Act of 2002 for so long as we are an emerging growth
company. As a result, if we elect not to comply with such auditor attestation requirements, our investors may not have access to certain
information they may deem important.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">The
JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards
until such date that a private company is otherwise required to comply with such new or revised accounting standards. In other words,
an &#8220;emerging growth company&#8221; can delay the adoption of certain accounting standards until those standards would otherwise
apply to private companies. We have elected to take advantage of the extended transition period, although we have early adopted certain
new and revised accounting standards based on transition guidance permitted under such standards. As a result of this election, our future
financial statements may not be comparable to other public companies that comply with the public company effective dates for these new
or revised accounting standards.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions
applicable to United States domestic public companies.</i></b></span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Because
we are a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations
in the United States that are applicable to U.S. domestic issuers, including:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">the rules under the Exchange Act requiring
    the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with the SEC;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">the sections of the Exchange Act regulating
    the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act;</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">the sections of the Exchange Act requiring
    insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades
    made in a short period of time; and</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">the selective disclosure rules by issuers
    of material non-public information under Regulation FD.</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
are required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish
our results on a quarterly basis through press releases, distributed pursuant to the rules and regulations of the Nasdaq. Press releases
relating to financial results and material events will also be furnished to the SEC on Form 6-K. However, the information we are required
to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S.
domestic issuers. As a result, you may not be afforded the same protections or information, which would be made available to you, were
you investing in a U.S. domestic issuer.</span></p><div>

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

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#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"><b><i>We
may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.</i></b></span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">As
discussed above, we are a foreign private issuer, and therefore, we are not required to comply with all of the periodic disclosure and
current reporting requirements of the Exchange Act. The determination of foreign private issuer status is made annually on the last business
day of an issuer&#8217;s most recently completed second fiscal quarter, and, accordingly, the next determination will be made with respect
to us on June 30, 2021. In the future, we would lose our foreign private issuer status if (1) more than 50% of our outstanding voting
securities are owned by U.S. residents and (2) a majority of our directors or executive officers are U.S. citizens or residents, or we
fail to meet additional requirements necessary to avoid loss of foreign private issuer status. If we lose our foreign private issuer
status, we will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms, which are
more detailed and extensive than the forms available to a foreign private issuer. We will also have to mandatorily comply with U.S. federal
proxy requirements, and our officers, directors and principal shareholders will become subject to the short-swing profit disclosure and
recovery provisions of Section 16 of the Exchange Act. In addition, we will lose our ability to rely upon exemptions from certain corporate
governance requirements under the listing rules of the Nasdaq. As a U.S. listed public company that is not a foreign private issuer,
we will incur significant additional legal, accounting and other expenses that we will not incur as a foreign private issuer.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; "><span style="font-family: Times New Roman, Times, Serif"><b><i>As
a foreign private issuer, we are permitted to, and we have elected to, rely on exemptions from certain Nasdaq corporate governance standards
applicable to U.S. issuers. This may afford less protection to holders of our ordinary shares.</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9pt; text-align: justify; text-indent: 24.5pt; "><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">As
a Cayman Islands company listed on the Nasdaq Global Select Market, we are subject to the Nasdaq corporate governance listing standards.
For example, Rule 5605 of the Nasdaq Stock Market Rules requires listed companies to have, among other things, a majority of its board
members to be independent, and to obtain shareholder approval for certain issuances of securities. However, Nasdaq rules permit a foreign
private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the
Cayman Islands, which is our home country, may differ significantly from the Nasdaq corporate governance listing standards. For example,
under Cayman Islands law we are not required to have a majority of our board consist of independent directors or obtain shareholder approval
for certain issuances of our securities. With respect to the foregoing corporate governance requirement, we have elected to follow home
country practice. See &#8220;Item 16G. Corporate Governance.&#8221; We may also elect to rely on home country practice to be exempted
from other corporate governance requirements. As a result, our shareholders may be afforded less protection than they otherwise would
enjoy under the Nasdaq corporate governance listing standards applicable to U.S. domestic issuers.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><b><i>We
will incur significantly increased costs and devote substantial management time as a result of the listing of our ordinary 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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
will incur additional legal, accounting and other expenses as a public reporting company, particularly after we cease to qualify as an
emerging growth company. For example, we will be required to comply with the additional requirements of the rules and regulations of
the SEC and the Nasdaq rules, including applicable corporate governance practices. We expect that compliance with these requirements
will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. In addition, we
expect that our management and other personnel will need to divert attention from operational and other business matters to devote substantial
time to these public company requirements. We cannot predict or estimate the number of additional costs we may incur as a result of becoming
a public company or the timing of such costs.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">In
addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for
public companies, increasing legal and financial compliance costs and making some activities more time-consuming. These laws, regulations
and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application
in practice may evolve over time as new guidelines are provided by regulatory and governing bodies. This could result in continuing uncertainty
regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to
invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative
expenses and a diversion of management&#8217;s time and attention from revenue-generating activities to compliance activities. If our
efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due
to ambiguities related to their application and practice, regulatory authorities may also initiate legal proceedings against us and our
business may be adversely affected.</span></p><div>

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

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

</div><div><a id="a_005"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>ITEM 4.
INFORMATION ON THE COMPANY</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">&#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"><b>4.A.
History and Development of the Company</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
were incorporated under the laws of the Cayman Islands. Our registered office is located at 27F, Yantian Modern Industry Service Center,
No. 3018 Shayan Road, Yantian District, Shenzhen, Guangdong, China 518081. The telephone number of the registered office is +86 (755)
2520-9839. Our World Wide Web address is www.szygmz.com. Information contained on our website does not constitute a part of this annual
report.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Our
agent for service of process in the United States is Puglisi &amp; Associates, 850 Library Avenue, Suite 204, Newark, DE 1971. The telephone
number for our service agent is: (302) 738-6680</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">The
Company was incorporated on January 2, 2018 as an exempted company structured as a holding company incorporated under the laws of Cayman
Islands. Immediately prior to our initial public offering, we were owned by three entities and one individual: (i) Alpha Global (BVI)
Limited, a company formed under the laws of the British Virgin Islands and wholly-owned by Jinlong Yang, our Chairman and Chief Executive
Officer; (ii) Excelsior Investment Limited (Hong Kong), a company formed under the laws of Hong Kong and wholly-owned by Gui Ling Guo,
a director and the Vice Chair of the board of directors of MingZhu and (iii) Exquisite Elite Limited (BVI), a company formed under the
laws of the British Virgin Islands, with 86% of its equity interest owned by Zhuo Wang, our director. We began our operations in China
in 2002 and currently conduct our business through our subsidiaries and VIEs.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Our
main subsidiaries as of the date of this annual report are as follows:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#160;</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="border-bottom: black 1.5pt solid; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif"><b>Name</b></span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="3" style="text-align: center; border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif"><b>Background</b></span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center; border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif"><b>Ownership</b></span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td style="white-space: nowrap; width: 34%; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">MingZhu
    Investment Limited (&#8220;MingZhu BVI&#8221;)</span></td>
    <td style="white-space: nowrap; width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="white-space: nowrap; width: 3%"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p></td>
    <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="white-space: nowrap; width: 30%"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">A British
    Virgin Islands company</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">Incorporated
    on January 15, 2018</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">A holding
    company</span></p></td>
    <td style="white-space: nowrap; width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="white-space: nowrap; width: 30%"><span style="font-family: Times New Roman, Times, Serif">100% directly owned by MingZhu
    Cayman</span></td></tr>
  <tr style="vertical-align: top">
    <td style="padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></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">YGMZ (Hong Kong) Limited
    (&#8220;MingZhu HK&#8221;)</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">A Hong
    Kong company</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">Incorporated
    on February 2, 2018</span></p>
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  <tr style="vertical-align: top">
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    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></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">Shenzhen Yangang Mingzhu
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    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: top">
    <td style="padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></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">Shenzhen Yangang Mingzhu
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    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
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    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">A PRC
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    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">100% directly owned by MingZhu HK</span></td></tr>
  <tr>
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></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">Shenzhen Pengcheng Shengshi
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    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">A PRC
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    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">100% directly owned by MingZhu</span></td></tr>
  <tr style="vertical-align: top">
    <td style="padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></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">Cheyi (BVI) Limited (&#8220;Cheyi
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    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">A British
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    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">Incorporated
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    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">A holding
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    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">100% directly owned by MingZhu Cayman</span></td></tr>
  <tr style="vertical-align: top">
    <td style="padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></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">Cheyi (Hong Kong) Limited
    (&#8220;Cheyi HK&#8221;)</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">A Hong
    Kong company</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">Incorporated
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    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">A holding
    company</span></p></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">100% directly owned by Cheyi BVI</span></td></tr>
  <tr style="vertical-align: top">
    <td style="padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></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">Ningbo Cheyi Corporate
    Information Consulting Co., Ltd. (&#8220;Ningbo Cheyi&#8221; or Cheyi WFOE)</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">A PRC
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    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">Incorporated
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    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">A holding
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    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">100% directly owned by Cheyi HK</span></td></tr>
  <tr style="vertical-align: top">
    <td style="padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></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">Zhejiang Cheyi Network
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    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">A PRC
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    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">Incorporated
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    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">100% owned by Ningbo Cheyi via contractual arrangements</span></td></tr>
</table><div>

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

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

</div><!-- Field: Page; Sequence: 49; 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>

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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="vertical-align: top">
    <td style="border-bottom: black 1.5pt solid; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif"><b>Name</b></span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td colspan="3" style="text-align: center; border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif"><b>Background</b></span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center; border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif"><b>Ownership</b></span></td></tr>

<tr style="vertical-align: top; background-color: #CCEEFF">
    <td style="padding-left: 9pt; text-indent: -9pt; width: 34%"><span style="font-family: Times New Roman, Times, Serif">Yinhua (BVI) Limited (&#8220;Yinhua&#8221;)</span></td>
    <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 3%"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>&#9679;</td>
    <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 30%"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">A British
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    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">Incorporated
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    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">A holding
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    <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 30%"><span style="font-family: Times New Roman, Times, Serif">100% directly owned by MingZhu Cayman</span></td></tr>
  <tr style="vertical-align: top">
    <td style="padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></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">Yinhua (HK) Limited (&#8220;Yinhua
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    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><p style="margin-top: 0; margin-bottom: 0"><span style="font-family: Times New Roman, Times, Serif">&#160;A Hong Kong company
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        <p style="margin-top: 0; margin-bottom: 0"><span style="font-family: Times New Roman, Times, Serif">A holding company</span></p></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">100% directly owned by Yinhua</span></td></tr>
  <tr style="vertical-align: top">
    <td style="padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></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">Zhejiang Caiyunlian Technology
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    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">A PRC
    limited liability company</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">Incorporated
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    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">A holding
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    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">100% directly owned by Yinhua HK</span></td></tr>
  <tr style="vertical-align: top">
    <td style="padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
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    <td><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
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    auto related service platform to serve auto insurance companies</span></p></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">100% owned by Yinhua WFOE via contractual arrangements</span></td></tr>
  <tr style="vertical-align: top">
    <td style="padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></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">Feipeng Global Limited
    (&#8220;Feipeng BVI&#8221;)</span></td>
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    <td><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>&#9679;</td>
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    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
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  <tr style="vertical-align: top">
    <td style="padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></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">Feipeng Enterprises (HK)
    Limited (&#8220;Feipeng HK&#8221;)</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">A Hong Kong company<br/>
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A holding
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    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">100% directly owned by Feipeng BVI</span></td></tr>
  <tr style="vertical-align: top">
    <td style="padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></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">Shenzhen Feipeng Zongheng
    Supply Chain Management Co., Ltd. (&#8220;Feipeng WFOE&#8221;)</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
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    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">A PRC
    limited liability company</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">Incorporated
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    company</span></p></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">100% directly owned by Feipeng HK</span></td></tr>
  <tr style="vertical-align: top">
    <td style="padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></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">Xinjiang Feipeng Logistics
    Co., Ltd. (&#8220;Feipeng&#8221;)</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></p></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">A PRC
    limited liability company</span></p>
    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">Incorporated
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    <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">A regional
    trucking services provider</span></p></td>
    <td><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td><span style="font-family: Times New Roman, Times, Serif">100% owned by Feipeng WFOE via contractual arrangements</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">A
reorganization of our legal structure was completed in April 2018. On April 13, 2018, the former shareholders transferred their 100%
ownership interest in MingZhu to MingZhu HK, which is 100% owned by the Company through MingZhu BVI. In consideration of such transfer,
the Company issued 1,000 ordinary shares to the former shareholders of MingZhu. After the reorganization, the Company owns 100% of the
equity interests of MingZhu BVI, MingZhu HK and MingZhu. The controlling shareholder of the Company is same as that of MingZhu prior
to the reorganization.</span></p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">On
October 21, 2020, we completed our firm commitment initial public offering (&#8220;IPO&#8221;) of 3,000,000 ordinary shares at a public
offering price of US$4.00 per share, for total gross proceeds of US$12 million, before deducting underwriting discounts, commissions
and other related expenses. Our ordinary shares began trading on The Nasdaq Capital Market on October 21, 2020 under the symbol &#8220;YGMZ&#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">&#160;</span></p><div>

</div><p style="font: 10pt 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
October 30, 2020, the underwriter and sole book-runner of our underwritten IPO, exercised the partial over-allotment option and purchased
an additional 350,000 ordinary shares of the Company at the IPO price of US$4.00 per share.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">On
December 4, 2020, the underwriter and sole book-runner of our underwritten IPO, further exercised the partial over-allotment option and
purchased an additional 4,040 ordinary shares of the Company at the IPO price of US$4.00 per share.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">On
March 12, 2021, the Company closed its direct public offering of 3,333,335 Units, with each Unit consisting of (i) one ordinary share
of the Company, par value $0.001 per share, and (ii) one warrant to purchase 0.75 ordinary share. The Company sold the Units at a price
of $6.00 per Unit. The Company received gross proceeds from the Offering, before deducting estimated offering expenses payable by the
Company, of approximately $18,000,000.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">On
April 21, 2021, the underwriter and sole book-runner of our underwritten IPO, exercised its partial warrant and purchased a total of
214,286 ordinary shares of the Company with no cash in consideration.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">On
June 14, 2021, the underwriter and sole book-runner of our underwritten IPO, exercised its partial warrant and purchased a total of 43,616
ordinary shares of the Company with no cash in consideration.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">On
December 29, 2021, we entered into a Share Purchase Agreement with Cheyi BVI which operates its business through its VIE, Cheyi Network,
an integrated online car-hailing and driver management services company, and each of shareholders of Cheyi BVI.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Pursuant
to the agreement, the total consideration for the acquisition of 100% equity ownership of Cheyi BVI is an aggregate of $23,470,712, consisting
of the issuance by the Company to the shareholders of Cheyi BVI an aggregate of 3,189,000 Company&#8217;s ordinary shares (representing
$6,760,680 with $2.12 per ordinary share) and payment of $2,000,000 at closing, and Year-2021 earnout payment of $8,826,019 and Year-2022
earnout payment of $5,884,013 if Cheyi BVI&#8217;s audited net income for its fiscal year 2021 and 2022 is no less than U.S. $3,000,000
respectively. The two earnout payments are due 13 months upon the delivery of Cheyi BVI&#8217;s audited financial statements.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Cheyi
Network was established in December 2015 as a comprehensive automobile service platform, providing a full range of services to the automotive
industry. Cheyi Network has built an integrated business platform with more than 6,000 vehicles and drivers for ride hailing services
under management. Its vehicles and drivers provide services to major mobility technology platforms, such as SAIC Mobility and T3 Mobility.&#160;The
acquisition is expected to offer our customers additional platform enhancements, and directly fits with our acquisition strategy, which
includes adding financially accretive, best-of-breed companies 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">&#160;</span></p><div>

</div><p style="font: 10pt 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
December 31, 2021, the parties completed the transaction. Upon the closing of the transaction, we acquired 100% shares outstanding of
the Cheyi BVI, and we issued 3,189,000 ordinary shares and paid $2,000,000 to the sellers.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">On
March 14, 2022, we entered into a Share Purchase Agreement with Yinhua which develops and operates a comprehensive auto related service
platform to serve auto insurance companies, and each of the shareholders of the Yinhua.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Under
terms of the share purchase agreement, we shall pay $10,076,600 in exchange for 100% equity of Yinhua. Of the total consideration to
be paid, $7,078,100 shall be paid in form of 3,826,000 newly issued ordinary shares of the Company, representing $1.85 per ordinary share
of the Company, and $1,000,000 upon closing. In addition, a cash earnout of $1,998,500 shall be paid if Yinhua achieves a net income
target threshold of $1.3 million during the calendar year of 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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Founded
in 2018, Yinhua provides diversified, differentiated and customized value-added auto related services to auto insurance companies, where
the services include road security services, car maintenance services, car inspection services and other services. Yinhua develops and
operates a comprehensive auto related service platform for auto insurance companies combining intelligent human-vehicle interaction functions
with car owner programs.</span></p><div>

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

</div><p style="font: 10pt 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
March 18, 2022, the parties completed the transaction. Upon the closing of the transaction, we acquired 100% shares outstanding of the
Yinhua, and we issued 3,826,000 ordinary shares and paid $1,000,000 to the sellers.</span></p><div>

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

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

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

</div><p style="font: 10pt 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
December 21, 2022, we entered into a Share Purchase Agreement with Feipeng BVI which provides regional trucking services, and each of
the shareholders of the Feipeng BVI, pursuant to which, among other things and subject to the terms and conditions contained therein,
we acquired 100% of Feipeng BVI for approximately $14,540,436, of which US $9,550,000 will be paid in cash upon closing in form of cash.
Feipeng BVI shall receive a certain number of shares valued at $4,990,436 if it achieves a targeted net income of US$2.4 million during
the calendar year 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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">The
Company has 22,960,277 ordinary shares outstanding as of the date of this annual report.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#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">Throughout
this report we refer to MingZhu Logistics Holdings Limited as &#8220;we,&#8221; &#8220;us,&#8221; &#8220;our,&#8221; or &#8220;the Company&#8221;.
The 11 subsidiaries of the Company are identified in &#8220;4.A. History and Development of the Company&#8221; in this report. We refer
to Cheyi Network Technology Co., Ltd., Hainan Zhisheng Car Services Co., Ltd and Xinjiang Feipeng Logistics Co., Ltd. as our &#8220;VIEs&#8221;
in this report. The investors have purchased securities in the Company. Our subsidiaries and/or the VIEs conduct operations in China.
The VIEs are consolidated for accounting purposes but are not the entities in which the investors own equity, and the Company does not
conduct operations.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif"><b>Risks
Related to VIE structure and Doing Business in China </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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
are not a Chinese operating company but a Cayman Islands holding company with operations conducted in China through (i) our PRC subsidiaries
and (ii) the VIEs and their subsidiaries with which we have maintained contractual arrangements.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Current
PRC laws and regulations impose certain restrictions or prohibitions on foreign ownership of companies that engage in value-added telecommunication
services, or VATS, and certain other businesses. Pursuant to the FITE Regulations promulgated by the State Council, foreign investors
are not allowed to hold more than 50% of the equity interests of any company providing VATS. In addition, foreign-invested telecommunication
enterprises should meet the requirements as prescribed in the relevant regulations. We have to conduct our VATS business through the
VIEs.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">The
VIE structure is used to provide investors with exposure to foreign investment in China-based companies where Chinese law prohibits or
limits direct foreign investment in the operating companies. Investors of our ordinary shares or the ADSs thus are not purchasing equity
interest in the VIEs and their subsidiaries in China but instead are purchasing equity interest in a Cayman Islands holding company.
Such VIE arrangement is not identical to owning such entities directly, and investors will own shares in a holding company with contracts
with the VIEs and will not have any equity ownership of such VIEs themselves. The VIE arrangement may not be as effective as direct ownership
in providing us with control over the VIEs. Direct ownership would allow us, for example, to directly or indirectly exercise our rights
as a shareholder to effect changes in the boards of directors of the VIEs, which, in turn, could affect changes, subject to any applicable
fiduciary obligations at the management level. However, under the VIE arrangement, as a legal matter, if the VIEs or its shareholders
fail to perform their respective obligations under the VIE arrangement, we may have to incur substantial costs and expend significant
resources to enforce those arrangements and resort to litigation or arbitration and rely on legal remedies under PRC laws. These remedies
may include seeking specific performance or injunctive relief and claiming damages, any of which may not be effective. In the event we
are unable to enforce these VIE Agreements or we experience significant delays or other obstacles in the process of enforcing the VIE
arrangement, we may not be able to exert effective control over the VIEs and may lose control over the assets owned by the VIEs.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">All
the agreements under our contractual arrangements with&#160;the VIEs&#160;and their equity owners are governed by PRC law and provide
for the resolution of disputes through arbitration in China. As of the date hereof, the agreements governed by PRC law that serve as
the basis for a VIE arrangement have not been tested in a PRC court of law. As a result, uncertainties in the PRC legal system could
limit our ability to enforce these contractual arrangements. Further, we face uncertainty about potential future actions by the PRC government
that could affect the validity and enforceability of the contractual arrangements with the VIEs. If the PRC government deems that our
contractual arrangements with the VIEs do not comply with PRC regulatory restrictions on foreign investment in the relevant industries,
or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or
be forced to relinquish our interests in those operations. If the PRC regulatory authorities disallow VIE structure, it would likely
result in a material change in your operations and/or a material change in the value of the registered securities, including that it
could cause the value of such securities to significantly decline or become worthless.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">In
addition, there is uncertainty as to whether the courts of the Cayman Islands or the PRC would recognize or enforce judgments of U.S.
courts against us or such persons predicated upon the civil liability provisions of the securities laws of the United States or any state.
Accordingly, it is uncertain whether we would be able to enforce the VIE arrangement in a court of law in China, either in an action
directly in China or in seeking to enforce a foreign judgment in China. The costs of seeking to enforce such VIE arrangement could be
substantial, and the outcome of such litigation might not result in us enforcing such VIE arrangement. If such VIE arrangement were not
enforced, investors could see the value of their Shares decrease in value or become worthless.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">For
more information regarding the risks associated with the VIE structure, see &#8220;Risk Factors-Risks Related to Our Corporate Structure&#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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">In
addition, there are legal and operational risks associated with being based in or having the majority of the Company&#8217;s operations
in China, including by not limited to:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 21pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">(1)</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The PRC government has significant authority
    to regulate or intervene in the China operations of an offshore holding company, such as us, at any time. Therefore, investors in
    our ordinary shares and our business face potential uncertainty from the PRC government&#8217;s policy.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 39pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">(2)</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Substantial uncertainties and restrictions
    with respect to the political and economic policies of the PRC government and PRC laws and regulations could have a significant impact
    upon the business the Company may be able to conduct in the PRC and accordingly on the results of its operations and financial condition.</span></td></tr>
  </table><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

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  <tr style="vertical-align: top">
    <td style="width: 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">(3)</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The failure to comply with PRC regulations
    relating to mergers and acquisitions of domestic enterprises by offshore special purpose vehicles may subject the Company to severe
    fines or penalties and create other regulatory uncertainties regarding the Company&#8217;s corporate structure. Further, the Anti-Monopoly
    Law which became effective in August 2008 and was amended on June 24, 2022, established additional procedures and requirements that
    could make merger and acquisition activities by foreign investors more time-consuming and complex. Under the Anti-Monopoly Law, companies
    undertaking acquisitions relating to businesses in China must notify the State Council&#8217;s anti-monopoly law enforcement authority,
    in advance of any transaction where the parties&#8217; revenue in the China market exceed certain thresholds and the buyer would
    obtain control of, or decisive influence over, the target. Our ability to expand our business or maintain or expand our market share
    through future acquisitions would as such be materially and adversely affected.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">(4)</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The HFCAA, recent regulatory actions taken
    by the SEC and PCAOB, and proposed rule changes submitted by U.S. stock exchanges calling for additional and more stringent criteria
    to be applied to China-based public companies could add uncertainties to our capital raising activities and compliance costs. The
    HFCAA requires a foreign company to certify it is not owned or controlled by a foreign government if the PCAOB is unable to audit
    specified reports because the company uses a foreign auditor not subject to PCAOB inspection. If the PCAOB is unable to inspect the
    company&#8217;s auditors for three consecutive years, the issuer&#8217;s securities are prohibited to trade on a national exchange.
    Furthermore, on June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, &#160;which was
    enacted on December 29, 2022 under the&#160;Consolidated&#160;Appropriations&#160;Act,&#160;2023, and amended the HFCAA to decrease
    the number of non-inspection years under the HFCAA from three years to two, thus reducing the time period before an issuer&#8217;s
    securities may be prohibited from trading on any U.S. securities exchange or any U.S. over-the-counter market or delisted. On December
    20, 2021, the PCAOB issued a report on its determinations that the PCAOB is unable to inspect or investigate completely PCAOB-registered
    public accounting firms headquartered in mainland China or Hong Kong because of positions taken by PRC authorities in those jurisdictions.
    Our independent registered public accounting firm that issued the audit report for our financial statements for 2022, as an auditor
    of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United
    States pursuant to which the PCAOB conducts regular inspections to assess our auditor&#8217;s compliance with the applicable professional
    standards, and thus our auditor is not subject to the determinations announced by the PCAOB on December 16, 2021. Although we believe
    that the HFCA Act and the related regulations do not currently affect us, we cannot assure you that there will not be any further
    implementations and interpretations of the Holding Foreign Companies Accountable Act or the related regulations, which might pose
    regulatory risks to and impose restrictions on us because of our operations in mainland China. On December 15, 2022, the PCAOB announced
    that PCAOB has secured complete access to inspect and investigate public accounting firms headquartered in mainland China and Hong
    Kong and vacated previous determinations to the contrary. If it is later determined that the PCAOB is unable to inspect or investigate
    our auditor completely, investors may be deprived of the benefits of such inspection. Any audit reports not issued by auditors that
    are completely inspected by the PCAOB, or a lack of PCAOB inspections of audit work undertaken in China that prevents the PCAOB from
    regularly evaluating our auditors&#8217; audits and their quality control procedures, could result in a lack of assurance that our
    financial statements and disclosures are adequate and accurate, then such lack of inspection could cause our securities to be delisted
    from the stock exchange.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 39pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">(5)</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Uncertainties exist with respect to the
    interpretation and implementation of the newly enacted Foreign Investment Law and how it may impact the viability of our current
    structure, our business, financial condition and results of operations. If our control over the VIE through contractual arrangements
    are deemed as foreign investment in the future, and any business of the VIE is restricted or prohibited from foreign investment under
    the &#8220;negative list&#8221; effective at the time, we may be deemed to be in violation of the Foreign Investment Law, the contractual
    arrangements that allow us to have control over the VIE may be deemed as invalid and illegal, and we may be required to unwind such
    contractual arrangements and/or restructure our business operations, any of which may have a material adverse effect on our business
    operation and consequently affecting our ability to prepare for and seek approval and commercialization of our product candidates
    both in China and elsewhere.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">(6)</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">Cybersecurity and data privacy and security
    issues are subject to increasing legislative and regulatory focus in China. The Data Security Law of the PRC, which took effect on
    September 1, 2021, requires that data collection must be conducted in a legitimate and proper manner, and in order to safeguard data,
    data processing activities must be conducted to comply with respective graded protection systems for cybersecurity. On January 4,
    2022, the Cyber Administration of China promulgated the New CAC Measures, which came into effect on February 15, 2022. According
    to the New CAC Measures, critical information infrastructure operators purchasing network products and services and online platform
    operators carrying out data processing activities that affect or may affect national security shall conduct a cybersecurity review.
    Network platform operators holding personal information of more than 1 million users seeking to be listed abroad must apply for a
    cybersecurity review as well. The New CAC Measures do not apply to the Company or any of its subsidiaries or VIEs as of the date
    of this annual report. Continued expansion of business operations by the Company, however, could bring the Company within the scope
    of authority of the CAC rules, and future enacted or amended CAC rules may increase compliance standards on our business operation,
    and thus have a substantial impact on our business. As there remains significant uncertainty in the interpretation and enforcement
    of relevant PRC cybersecurity laws and regulations, we could be subject to cybersecurity review, and if so, there is no assurance
    that we would be able to pass such review in a timely manner or at all. In addition, we could become subject to enhanced cybersecurity
    review or investigations launched by PRC regulators in the future. Any failure or delay in the completion of the cybersecurity review
    procedures or any other non-compliance with the related laws and regulations may result in fines or other penalties, including suspension
    of business, website closure, and revocation of prerequisite licenses, as well as reputational damage or legal proceedings or actions
    against us, which may result in a material change in our operations, the value of the securities registered or could significantly
    limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities
    to significantly decline or be worthless.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 39pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">(7)</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">On December 24, 2021, the CSRC issued the
    Administrative Provisions of the State Council Regarding the Overseas Issuance and Listing of Securities by Domestic Enterprises
    (Draft for Comments) (the &#8220;Draft Administrative Provisions&#8221;) and the Measures for the Overseas Issuance of Securities
    and Listing Record-Filings by Domestic Enterprises (Draft for Comments) (the &#8220;Draft Filing Measures,&#8221; collectively with
    the Draft Administrative Provisions, the &#8220;Overseas Issuance and Listing Regulations Drafts&#8221;), which are currently published
    for public comments only. According to the Overseas Issuance and Listing Regulations Drafts, among other things, after making initial
    applications with overseas stock markets for initial public offerings or any offerings after the initial public offering, all domestic
    companies shall file with the CSRC within three working days. The Overseas Issuance and Listing Regulations Drafts further stipulate
    that a fine between RMB 1 million and RMB 10 million may be imposed if an applicant fails to fulfill the filing requirements with
    the CSRC or conducts an overseas offering or listing in violation of the Overseas Issuance and Listing Regulations Drafts, and in
    cases of severe violations, a parallel order to suspend relevant businesses or halt operations for rectification may be issued, and
    relevant business permits or operational licenses revoked. The Overseas Issuance and Listing Regulations Drafts, if enacted, may
    subject us to additional compliance requirements in the future, and though we believe that none of the situations that would significantly
    limit our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline
    or be worthless.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 39pt; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">(8)</span></td>
    <td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">The MOFCOM and the NDRC promulgated the
    Special Administrative Measures for Access of Foreign Investment (2021 Edition), or the Negative List (2021), stipulates that if
    a domestic enterprise engaged in business in the prohibited investment field issues shares abroad and is listed for trading, it shall
    be examined and approved by the relevant competent authorities of the state. According to a press release issued by the NDRC in relation
    to the Negative List (2021), the above provisions are only applicable to the direct overseas listing of domestic enterprises engaged
    in the prohibited investment field. We believe our listing on Nasdaq does not constitute a direct overseas listing of domestic enterprises
    mentioned in the above press release and therefore we are not subject to the examination and approval by the relevant competent authorities
    of the state in accordance with the Negative List (2021). However, the above regulations and drafts for comments also indicate the
    intention of the Chinese government to increase its regulation of offshore investment in company&#8217;s utilizing the VIE structure
    to participate in the prohibited investment fields. If relevant governmental authority determines or new future rules provides that
    we are required to obtain the approval, we would have to apply for such approval. There is no assurance that we will be able to obtain
    such approval in time or at all. If we fail to obtain the approve as required or in a timely manner, the VIE arrangement may be deemed
    illegal and ordered to be cancelled by relevant government authorities, and other administrative measures or penalties may be imposed
    on us, which could materially and adversely affect our business, financial condition, results of operations and the value of our
    shares. Any failure of us to fully comply with new regulatory requirements may significantly limit or completely hinder our ability
    to offer or continue to offer our shares, cause significant disruption to our business operations, severely damage our reputation,
    materially and adversely affect our financial condition and results of operations and cause our shares to significantly decline in
    value or become worthless.</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">These
risks associated with being based in or having the majority of the Company&#8217;s operations in China could result in a material change
in our operations and/or the value of the securities registered or could significantly limit or completely hinder our ability to offer
or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 21pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">For
more information, see &#8220;Risk Factors- Risks Related to Doing Business in China&#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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif"><b>4.B. Business
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">&#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"><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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">The
Company is not an operating company a Cayman Islands holding company with its operations conducted through its subsidiaries in the PRC
(the &#8220;Subsidiaries&#8221;) and through contractual arrangements with its variable interest entity (the &#8220;VIEs&#8221;). We
engaged in a number of diverse business activities, including trucking services, car-hailing and driver management services, and car
owner services.</span></p><div>

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

</div><p style="font: 10pt 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
December 29, 2021, we entered into a Share Purchase Agreement with Cheyi BVI which operates its business through the VIE, Cheyi Network,
an integrated online car-hailing and driver management services company, and each of shareholders of Cheyi BVI. On December 31, 2021,
the parties completed the transaction. Cheyi Network was established in December 2015 as a comprehensive automobile service platform,
providing a full range of services to the automotive industry. Cheyi Network has built an integrated business platform with more than
6,000 vehicles and drivers for ride hailing services under management. Its vehicles and drivers provide services to major mobility technology
platforms, such as SAIC Mobility and T3 Mobility.&#160;</span></p><div>

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

</div><p style="font: 10pt 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
March 14, 2022, we entered into a Share Purchase Agreement with Yinhua which develops and operates a comprehensive auto related service
platform to serve auto insurance companies, and each of the shareholders of the Yinhua. On March 18, 2022, the parties completed the
transaction. Founded in 2018, Yinhua provides diversified, differentiated and customized value-added auto related services to auto insurance
companies, where the services include road security services, car maintenance services, car inspection services and other services. Yinhua
develops and operates a comprehensive auto related service platform for auto insurance companies combining intelligent human-vehicle
interaction functions with car owner programs.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">On
December 21, 2022, we entered into a Share Purchase Agreement with Feipeng BVI which provides regional trucking services, and each of
the shareholders of the Feipeng BVI. On December 21, 2022, the parties completed the transaction. Feipeng BVI provides regional trucking
services in Xinjiang, PRC through its VIE, Feipeng. Feipeng mainly focuses on the short-distance coal transportation.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">The
following chart sets forth a summary of the licenses and permissions obtained by the principal PRC subsidiaries as of the date of this
annual report:</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></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: 28%; border-bottom: black 1.5pt solid; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Approval</b></span></td>
    <td style="width: 1%; text-align: center">&#160;</td>
    <td style="width: 18%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Recipient</b></span></td>
    <td style="width: 1%; text-align: center">&#160;</td>
    <td style="width: 18%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Issuing body</b></span></td>
    <td style="width: 1%; text-align: center">&#160;</td>
    <td style="width: 16%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Date of grant</b></span></td>
    <td style="width: 1%; text-align: center">&#160;</td>
    <td style="width: 16%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Date of expiry</b></span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Road Freight Forwarding Operation Permit</span></td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">MingZhu</span></td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shenzhen Transportation Committee</span></td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">October 8, 2022</span></td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">October 7, 2026</span></td></tr>
  <tr>
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Road Freight Forwarding Operation Permit</span></td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">MingZhu Pengcheng</span></td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shenzhen Transportation Committee</span></td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">September 17, 2022</span></td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">September 16, 2026</span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Value-added Telecommunications Business License</span></td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cheyi Network</span></td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Zhejiang Communications Administration</span></td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">September 17, 2022</span></td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">September 16, 2026</span></td></tr>
  <tr>
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Value-added Telecommunications Business License</span></td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Zhisheng</span></td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Ministry of Industry and Information Technology</span></td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">October 8, 2022</span></td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">October 7, 2026</span></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Road Transport Operation Permit</span></td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Feipeng</span></td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Xinjiang Road Transport Administration</span></td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">September 17, 2022</span></td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">September 16, 2026</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: left; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
have obtained all requisite licenses and permissions to conduct our business in China in material aspects. Furthermore, we believe that
(i) we will not be required to submit an application to the CSRC for its approval of the VIE arrangement under the &#8220;M&amp;A Rules&#8221;;
(ii)we would not constitute an &#8220;operator of critical information infrastructure&#8221; nor our or VIE&#8217;s business and activities
would affect or may affect national security, so we believe we are not subject to the cybersecurity review under the Cybersecurity Review
Measures; and (iii) there are substantial uncertainties regarding the interpretation and application of PRC laws and regulations and
prospects for future PRC laws and regulations, and there can be no assurance that the relevant government agencies will take a view that
is not contrary to or otherwise different from the conclusions stated above. If we, our subsidiaries, or the VIEs (i) do not receive
or maintain such permissions or approvals, should the approval be required in the future by the PRC government, (ii) inadvertently conclude
that such permissions or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and we are required
to obtain such permissions or approvals in the future, our operations and financial conditions could be materially adversely affected,
our ability to offer securities to investors could be significantly limited or completely hindered and our securities may substantially
decline in value or be worthless. If it is determined in the future that the approval of the CSRC, the Cyberspace Administration of China
or any other regulatory authority is required, we may face sanctions by the CSRC, the Cyberspace Administration of China or other PRC
regulatory agencies. These regulatory agencies may impose fines and penalties on our operations in China, limit our ability to pay dividends
outside of China, limit our operations in China, delay or restrict the repatriation of the proceeds into China or take other actions
that could have a material adverse effect on our business, financial condition, results of operations, as well as the trading price of
our securities. The CSRC, the Cyberspace Administration of China or other PRC regulatory agencies also may take actions requiring us,
or making it advisable for us, to halt any securities offering we may undertake in the future. Consequently, if you engage in market
trading or other activities in anticipation of and prior to settlement and delivery, you do so at the risk that settlement and delivery
may not occur. In addition, if the CSRC, the Cyberspace Administration of China or other regulatory PRC agencies later promulgate new
rules requiring that we obtain their approvals in the future, we may be unable to obtain such approvals or a waiver of such approval
requirements, if and when procedures are established to obtain such a waiver. Any uncertainties and/or negative publicity regarding such
an approval requirement could have a material adverse effect on the trading price of our 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">&#160;</span></p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
engaged in a number of diverse business activities, including trucking services, car-hailing and driver management services, and car
owner services.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><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">The
Company&#8217;s trucking services are provided through Mingzhu and its subsidiaries and newly acquired VIE Feipeng and its 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"><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">Mingzhu
is a trucking service provider in China with over 21 years of experience in the transportation industry. It was our first operating subsidiary
formed 2002. It has been accredited by the China Federation of Logistics and Purchasing as a 4A-grade trucking service provider. Its
transportation services operate out of two terminals, one in the Guangdong region, and the other in the Xinjiang region. It primarily
provides dedicated trucking services within the PRC. It has created a successful business model that has allowed us to expand our customer
base and market coverage whilst maintaining good relationships with our existing customers. To further expand our market shares in Xinjiang
region, we acquired Feipeng, which focuses on the short-distance coal transportation in Xinjiang 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">&#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"><i>Competition</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
believe that the following strengths differentiate us from our competitors and provide us with advantages for realizing the potential
of market opportunity:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in">&#160;</td>
<td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">To
                                            establish a solid reputation in the transportation industry in the PRC, we focus on the quality
                                            of our trucking services to ensure that we are able to meet the quality standards expected
                                            from our customers. Our focus on quality covers various areas such as vehicle reliability,
                                            service reliability, flexible and customizable service offerings for our customers, as well
                                            as responsiveness to customer feedback, and continuous process improvement.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22pt; text-align: justify; text-indent: 0in"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
<td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">We
                                            have been able to maintain stable business relationships with our major customers, including
                                            reputable logistics companies in the PRC. Working with sizeable customers has strengthened
                                            our company&#8217;s reputation and credibility in the transportation industry.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in">&#160;</td>
<td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">We
                                            believe that the extensive industry expertise and experience of our management team is essential
                                            to our success. Our senior management team has an average of approximately 15 years of experience
                                            with our company and 19 years of experience in the transportation industry in the PRC. We
                                            believe that the experience and knowledge of our management team would enable us to keep
                                            abreast of our competitiveness and market landscape from time to time, recognize the needs
                                            of our customers more readily and manage our operations, specifically, labor and vehicle
                                            deployment, more efficiently.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in">&#160;</td>
<td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">With
                                            two regional terminals, one in Guangdong and the other in Xinjiang, we have set up an established
                                            network of transport nodes throughout the years. Such a network has opened many routes for
                                            us to offer our customers more comprehensive services. We have become capable of covering
                                            a larger geographic region and provide more types of transportation services. We believe
                                            that our wide range of services offered has provided us with a significant competitive advantage
                                            over other local service providers in the PRC that only offer limited types of road trucking
                                            services with fixed routes, itinerary, and schedules.</span></td></tr></table><div>

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



</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><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"><b><i>Car-hailing
and driver management services</i></b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif"><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">The
Company&#8217;s car-hailing and driver management services are provided through Cheyi Network and its 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"><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">Cheyi
Network was established in December 2015 as a comprehensive automobile service platform, providing a full range of services to the automotive
industry. Cheyi Network has built an integrated business platform with more than 6,000 vehicles and drivers for ride hailing services
under management. Its vehicles and drivers provide services to major mobility technology platforms, such as SAIC Mobility and T3 Mobility.</span></p><div>

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

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

</div><!-- Field: Page; Sequence: 56; 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 -->53<!-- 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">&#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"><i>Competition</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
believe that the following strengths differentiate us from our competitors and provide us with advantages for realizing the potential
of market opportunity:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in">&#160;</td>
<td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">To
                                            establish a solid reputation in the transportation industry in the PRC, we focus on the quality
                                            of our trucking services to ensure that we are able to meet the quality standards expected
                                            from our customers. Our focus on quality covers various areas such as vehicle reliability,
                                            service reliability, flexible and customizable service offerings for our customers, as well
                                            as responsiveness to customer feedback, and continuous process improvement.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22pt; text-align: justify; text-indent: 0in"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
<td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">We
                                            have been able to maintain stable business relationships with our major customers, including
                                            reputable logistics companies in the PRC. Working with sizeable customers has strengthened
                                            our company&#8217;s reputation and credibility in the transportation industry.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in">&#160;</td>
<td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">We
                                            believe that the extensive industry expertise and experience of our management team is essential
                                            to our success. Our senior management team has an average of approximately 15 years of experience
                                            with our company and 19 years of experience in the transportation industry in the PRC. We
                                            believe that the experience and knowledge of our management team would enable us to keep
                                            abreast of our competitiveness and market landscape from time to time, recognize the needs
                                            of our customers more readily and manage our operations, specifically, labor and vehicle
                                            deployment, more efficiently.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in">&#160;</td>
<td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">With
                                            two regional terminals, one in Guangdong and the other in Xinjiang, we have set up an established
                                            network of transport nodes throughout the years. Such a network has opened many routes for
                                            us to offer our customers more comprehensive services. We have become capable of covering
                                            a larger geographic region and provide more types of transportation services. We believe
                                            that our wide range of services offered has provided us with a significant competitive advantage
                                            over other local service providers in the PRC that only offer limited types of road trucking
                                            services with fixed routes, itinerary, and schedules.</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"><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"><b><i>Car
owner services</i></b></span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">The
Company&#8217;s car owner services are provided through Zhisheng.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Zhisheng
was founded in 2018, Zhisheng provides diversified, differentiated and customized value-added auto related services to auto insurance
companies, where the services include road security services, car maintenance services, car inspection services and other services. Zhisheng
develops and operates a comprehensive auto related service platform for auto insurance companies combining intelligent human-vehicle
interaction functions with car owner programs.</span></p><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
believe that the following strengths differentiate us from our competitors and provide us with advantages for realizing the potential
of market opportunity:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in">&#160;</td>
<td style="width: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#9679;</span></td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">To
                                            establish a solid reputation in the transportation industry in the PRC, we focus on the quality
                                            of our trucking services to ensure that we are able to meet the quality standards expected
                                            from our customers. Our focus on quality covers various areas such as vehicle reliability,
                                            service reliability, flexible and customizable service offerings for our customers, as well
                                            as responsiveness to customer feedback, and continuous process improvement.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 22pt; text-align: justify; text-indent: 0in"><span style="font-family: Times New Roman, Times, Serif"><b><i>&#160;</i></b></span></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"><tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
<td style="width: 0.25in">&#9679;</td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">We
                                            have been able to maintain stable business relationships with our major customers, including
                                            reputable logistics companies in the PRC. Working with sizeable customers has strengthened
                                            our company&#8217;s reputation and credibility in the transportation industry.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 20pt"></p><div>

</div><!-- Field: Page; Sequence: 57; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->54<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in">&#160;</td>
<td style="width: 0.25in">&#9679;</td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">We
                                            believe that the extensive industry expertise and experience of our management team is essential
                                            to our success. Our senior management team has an average of approximately 15 years of experience
                                            with our company and 19 years of experience in the transportation industry in the PRC. We
                                            believe that the experience and knowledge of our management team would enable us to keep
                                            abreast of our competitiveness and market landscape from time to time, recognize the needs
                                            of our customers more readily and manage our operations, specifically, labor and vehicle
                                            deployment, more efficiently.</span></td></tr></table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 20pt"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: 0.5in">&#160;</td>
<td style="width: 0.25in">&#9679;</td><td style="text-align: justify"><span style="font-family: Times New Roman, Times, Serif">With
                                            two regional terminals, one in Guangdong and the other in Xinjiang, we have set up an established
                                            network of transport nodes throughout the years. Such a network has opened many routes for
                                            us to offer our customers more comprehensive services. We have become capable of covering
                                            a larger geographic region and provide more types of transportation services. We believe
                                            that our wide range of services offered has provided us with a significant competitive advantage
                                            over other local service providers in the PRC that only offer limited types of road trucking
                                            services with fixed routes, itinerary, and schedules.</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">&#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"><b><span style="text-decoration:underline">Customers</span></b></span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Our
customers are mainly sizeable third-party logistics companies, freight forwarders, warehouse operators, and other supply chain service
providers in the PRC.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">During
the years ended December 31, 2022, 2021 and 2020, sales to our top five customers accounted for approximately 31.4%, 49.4% and 78.2%,
respectively. We have been able to maintain stable business relationships with our major customers, including reputable logistics companies
in the PRC. Working with sizeable customers has strengthened our company&#8217;s reputation and credibility in the transportation 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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Despite
our concentration on a limited number of major customers, we believe that a number of factors will help mitigate any material adverse
impact of such concentration on our business operations and financial condition. Our services model and facilities are not specifically
designed to cater solely for one particular customer. In contrast, they are flexible and adaptable in serving different customers&#8217;
needs. In the event that our current business relationship with our five largest customers or any one of them deteriorates, our services
can be readily transferred to serve other potential new customers and satisfy their needs. The preparation works required for serving
new customers usually include fine-tuning quality procedures to suit individual customer requirements, coordinating with new customers,
re-designing the delivery route, allocating warehousing space and updating computer systems to facilitate the process, which in our view
will not incur any significant cost or require long transition periods. In fact, our major customers continued to evolve in the past
three 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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
believe that our continuous effort in providing high quality trucking services to our customers is the key to enlarge our market share
in the transportation industry, strengthen our customer base as well as enhance our marketing effectiveness. Our operation team generally
handles inquiries, complaints and feedbacks from our customers and will maintain a regular contact with our external transportation subcontractors
with the goal of resolving issues such as late deliveries or complaints from customers in a timely fashion.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
recognize that having a high level of customer services is crucial in maintaining our reputation in the market and cultivating customer
loyalty. Thus, we follow up with the orders and keep track of the level of satisfaction of our customers. We also gather customers&#8217;
feedbacks and review the flow of our trucking services in order to increase our customers&#8217; satisfaction and improve our service
quality. For further information regarding our quality control, please refer to &#8220;&#8212; Quality Assurance.&#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">&#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"><b><i>Customer
Acquisition </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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Our
new customers are mainly referrals from our existing customers which in our view, is a reflection of our existing customers&#8217; satisfaction
with our services. Our primary strategy for new customer acquisition is to further develop our existing terminals in Guangdong and Xinjiang
by expanding the range of transportation solutions offered from these terminals. We also plan to expand into new geographic regions through
the opening of new terminals in new 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">&#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: 58; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->55<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">In
addition, we seek out new customers through marketing activities such as participating in trade fairs and functions. We focus on attracting
financially stable customers who ideally share traffic flows that complement our existing routes. By maintaining an even flow of freight
traffic, we improve our utilization rate by minimizing movement of empty idle equipment. Additionally, we continuously form strategic
alliances with local government agencies to attain stronger regional market knowledge and influence.</span></p><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">For
our customers that are logistic companies, the routes and schedules that have been contracted with us are generally scheduled and regular
and remain unchanged throughout the contract period. If our customers experience sudden spikes in demand for trucking services, they
may seek other service providers instead of changing the terms of our trucking 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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">In
general, demand for our trucking services has been observed to be higher in June, November and December each year due to the sales campaigns
organized by various online shopping platforms. To meet the demand in peak seasons, we extend our hours of operation each day during
these months. Despite peak demand seasons being observed in the consumer goods industry, the business&#8217;s dedicated trucking services
ensure a level of stability in our operations and therefore our directors feel that seasonality do not have major impact to the business&#8217;
overall revenue and business operations.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">For
car-hailing and driver management services and car-owner services, there is no significant impact found as due to seasonality.</span></p><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">The
supplies we need for our trucking service business mainly include insurance, tires, vehicles, fuel oil and gas. The supplies we need
for our car-hailing and driver management services are pool of vehicles and drivers. The supplies we need for our car-owner services
are car services subcontractors.</span></p><div>

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




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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
have not spent a significant amount of capital on advertising in the past, and our advertising budget continues to be 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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
mainly rely on our established relationships with our existing customers, customer referrals and our reputation to expand our business.
Aside from obtaining new customers through referrals, we also seek out new customers by attending and participating in trade fairs. Our
management team will regularly attend functions to build a stronger network with existing customers and so that potential customers may
be referred to us. Our sales and marketing team regularly contact customers to maintain good business relationship and expand our network
by soliciting new customers through referrals from existing 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">&#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"><b>Intellectual
Property</b></span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#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"><b>Regulations
Relating to Intellectual Property in the PRC</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">&#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"><b><i>Copyright</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Pursuant
to the Copyright Law of the PRC, as amended in 2010, copyright protection extends to cover Internet activities and products disseminated
over the Internet. Pursuant to the Regulations on the Protection of Computer Software promulgated by the State Council In December 2001
and most recently amended in January 2013, and the Rules for the Registration of Computer Software Copyright, which was promulgated by
the China Copyright Office and came into effect in February 2002, anyone publishes, revises or translates computer software without obtaining
the prior approval of the computer software copyright holders shall bear civil liability to the copyright owner because of harming the
copyright. The corporate computer software copyright is valid for a term of 50 years until 31 December of the 50th year, starting from
the date as of first publication. The computer software copyright owners shall register at the registration institution authorized by
the PRC Copyright Office to obtain the computer software copyright registration certificates as preliminary evidence of the computer
software copyright being registered.</span></p><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
own 17 PRC copyright registrations, including 1 art-work copyright and 16 software copyrights.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: bottom">
    <td style="border-bottom: black 1.5pt solid; white-space: nowrap; width: 33%; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif"><b>Name</b></span></td>
    <td style="white-space: nowrap; width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; white-space: nowrap; width: 18%; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>Copyright
    No./Trademark No.</b></span></td>
    <td style="white-space: nowrap; width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; white-space: nowrap; width: 15%; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>Applicant/Copyright<br/>
    Holder</b></span></td>
    <td style="white-space: nowrap; width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; white-space: nowrap; width: 15%; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>Status</b></span></td>
    <td style="white-space: nowrap; width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; white-space: nowrap; width: 15%; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>Expiration<br/>
    Date</b></span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">Yangang
    Mingzhu Trunk Road Transportation Personnel Management System V1.0</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2017SR625777</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Mingzhu</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Registered</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">January 6, 2067</span></td></tr>
  <tr>
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">Yangang
    Mingzhu Trunk Road Transportation Vehicle Registration System V1.0</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2017SR625609</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Mingzhu</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Registered</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">February 28, 2067</span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">Yangang
    Mingzhu Harbor Collection and Transportation Goods Inspection System V1.0</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2017SR625618</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Mingzhu</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Registered</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">March 6, 2067</span></td></tr>
  <tr>
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">Yangang
    Mingzhu Port Collection Weighing System V1.0</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2017SR626715</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Mingzhu</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Registered</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">April 10, 2067</span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">Yangang
    Mingzhu Cold Chain Transportation Temperature Real-time Monitoring System V1.0</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2017SR626709</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Mingzhu</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Registered</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">May 15, 2067</span></td></tr>
  <tr>
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">Yangang
    Mingzhu Cold Chain Transportation Temperature Control System V1.0</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2017SR626701</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Mingzhu</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Registered</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">June 9, 2067</span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">Yangang
    Mingzhu Supplies Centralized Supply and Sales System V1.0</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2017SR626921</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Mingzhu</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Registered</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">June 19, 2067</span></td></tr>
  <tr>
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">Yangang
    Mingzhu Supplies Integrated Sales Management System V1.0</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2017SR625793</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Mingzhu</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Registered</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">July 6, 2067</span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">Yangang
    Mingzhu property integrated parking management system V1.0</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2017SR626312</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Mingzhu</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Registered</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">July 21, 2067</span></td></tr>
  <tr>
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">Yangang
    Mingzhu property grid-based information system V1.0</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2017SR625829</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Mingzhu</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Registered</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">August 18, 2067</span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">Yangang
    Mingzhu Real-time Inquiry and Monitoring Management Software for Distribution Information V1.0</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2019SR0561346</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Mingzhu</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Registered</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">December 4, 2068</span></td></tr>
  <tr>
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">Yangang
    Mingzhu Intelligent Remote Control Sorting System V1.0</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2019SR0561184</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Mingzhu</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Registered</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">December 25, 2068</span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">Yangang
    Mingzhu Freight Vehicle Track Monitoring Big Data Platform V1.0</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2019SR0561342</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Mingzhu</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Registered</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">October 17, 2068</span></td></tr>
  <tr>
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">Yangang
    Mingzhu Abnormal Freight Information Warning Platform V1.0</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2019SR0561338</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Mingzhu</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Registered</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">January 9, 2069</span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">Yangang
    Mingzhu Intelligent Alert System for Capacity Cost Control V1.0</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2019SR0559893</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Mingzhu</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Registered</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">November 7, 2068</span></td></tr>
  <tr>
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">Dynamic
    logistics distribution method and its system based on network communication V1.0</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">2019SR0561251</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Mingzhu</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Registered</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">November 28, 2068</span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">Yangang
    Mingzhu Logo</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Guo Zu Deng Zi-2021-F-00006375</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Mingzhu</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Registered</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">N/A</span></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-family: Times New Roman, Times, Serif">&#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"><b><i>Trademark</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Pursuant
to the Trademark Law of the PRC, as last amended in April 2019 and became effective from November 1, 2019, and the Implementation Regulations
on the Trademark Law of the PRC amended in April 2014, the period of validity of a registered trademark shall be ten years, counted from
the day the registration is approved. The trademark registrant may, by concluding a trademark licensing contract, authorize other persons
to use the registered trademark. The licensor shall supervise the quality of the goods on which the licensee uses the licensor&#8217;s
registered trademark, and the licensee shall guarantee the quality of the goods on which the registered trademark is used. Without putting
the licensing of the trademark on records, the trademark shall not be used to defend the bona fide third party.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
have been granted one trademark which is registered trademarks in the PRC:</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: bottom">
    <td style="border-bottom: Black 1.5pt solid; white-space: nowrap; width: 33%"><span style="font-family: Times New Roman, Times, Serif"><b>Name</b></span></td>
    <td style="white-space: nowrap; width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; white-space: nowrap; width: 18%; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>Application
    No./Trademark No.</b></span></td>
    <td style="white-space: nowrap; width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; white-space: nowrap; width: 15%; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>Applicant/Trademark<br/>
    Holder</b></span></td>
    <td style="white-space: nowrap; width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; white-space: nowrap; width: 15%; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>Status</b></span></td>
    <td style="white-space: nowrap; width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; white-space: nowrap; width: 15%; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>Expiration<br/>
    Date</b></span></td></tr>
  <tr style="vertical-align: top; background-color: #CCEEFF">
    <td><img alt="" src="image_001.jpg"/></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">22675420</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">Mingzhu</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">Registered</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">February 20, 2028</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">&#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: 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 -->57<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Pursuant
to the Patent Law of the PRC, as amended in 2008, after the grant of the patent right for an invention or utility model, except where
otherwise provided for in the Patent Law, no entity or individual may, without the authorization of the patent owner, exploit the patent,
that is, make, use, offer to sell, sell or import the patented product, or use the patented process, or use, offer to sell, sell or import
any product which is a direct result of the use of the patented process, for production or business purposes. After a patent right is
granted for a design, no entity or individual shall, without the permission of the patent owner, exploit the patent, that is, for production
or business purposes, manufacture, offer to sell, sell, or import any product containing the patented design. Once the infringement of
a patent is confirmed, the infringer shall, in accordance with the regulations, undertake to cease the infringement, take remedial action,
and pay damages, etc.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
currently own 6 PRC patents related to technologies used in connection with trucking services, including 1 invention patent and 5 utility
patents.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: bottom">
    <td style="border-bottom: black 1.5pt solid; white-space: nowrap; width: 33%; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif"><b>Name</b></span></td>
    <td style="white-space: nowrap; width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; white-space: nowrap; width: 18%; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>Application
    No./Patent No.</b></span></td>
    <td style="white-space: nowrap; width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; white-space: nowrap; width: 15%; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>Applicant/Patent<br/>
    Holder</b></span></td>
    <td style="white-space: nowrap; width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; white-space: nowrap; width: 15%; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>Status</b></span></td>
    <td style="white-space: nowrap; width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; white-space: nowrap; width: 15%; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>Expiration<br/>
    Date</b></span></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">A container anti-theft
    lock</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">ZL201721417207.4</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">Mingzhu</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">Registered</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">October 27, 2027</span></td></tr>
  <tr style="vertical-align: top; ">
    <td style="padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">Freight vehicle engine
    status monitoring system</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">ZL201721398988.7</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="white-space: nowrap; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Mingzhu</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">Registered</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">October 27, 2027</span></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">Freight vehicle vision
    blind area monitoring system</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">ZL201721400239.3</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">Mingzhu</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">Registered</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">October 27, 2027</span></td></tr>
  <tr style="vertical-align: top; ">
    <td style="padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">Freight vehicle fuel tank
    status monitoring system</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">ZL201721398999.5</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">Mingzhu</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">Registered</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">October 27, 2027</span></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">Freight vehicle tire status
    monitoring system</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">ZL201721398990.4</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">Mingzhu</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">Registered</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">October 27, 2027</span></td></tr>
  <tr style="vertical-align: top; ">
    <td style="padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">A cantilever hoist for
    logistics transportation</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">ZL201710933794.0</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">Mingzhu</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">Registered</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif">May 21, 2039</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">&#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"><b><i>Domain
Name</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">The
domain name is protected and regulated under the Measures for the Administration of Domain Names for the Internet promulgated in August
2017 and effective in November 2017. According to these measures, the principle &#8220;first come, first serve&#8221; is followed for
the domain name registration service. After completing the domain name registration, the applicant becomes the holder of the domain name
registered by him/it. Any organization or individual may file an application for settlement with the domain names dispute resolution
institution or file a lawsuit in the people&#8217;s court in accordance with the law if such organization or individual consider its/his
legal rights and interests to be infringed by domain names registered or used by others.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">We
own one international domain name.</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</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: bottom">
    <td style="border-bottom: black 1.5pt solid; width: 33%; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif"><b>Name</b></span></td>
    <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; width: 18%; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>Domain
    Name</b></span></td>
    <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; width: 15%; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>Domain
    Name<br/>
 Holder</b></span></td>
    <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; width: 15%; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>Status</b></span></td>
    <td style="width: 1%"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="border-bottom: black 1.5pt solid; width: 15%; text-align: center"><span style="font-family: Times New Roman, Times, Serif"><b>Expiration<br/>
    Date</b></span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="vertical-align: bottom; padding-left: 9pt; text-indent: -9pt"><span style="font-family: Times New Roman, Times, Serif">International
    Domain Name Registration Certificate</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">szygmz.com</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Mingzhu</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">Registered</span></td>
    <td style="vertical-align: bottom; text-align: justify"><span style="font-family: Times New Roman, Times, Serif">&#160;</span></td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif">March 4, 2024</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">&#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"><b>Environmental
Matters</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">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Pursuant
to the PRC Prevention of Environmental Noise Pollution Law, noise arising from the industrial and manufacturing activities should not
exceed the prescribed emission level. We believe that we are in compliance with such requirement.</span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-family: Times New Roman, Times, Serif">Due
to the nature of our business, our operational activities do not directly generate industrial pollutants. As such, we have not directly
incurred any cost of compliance with applicable PRC environmental protection rules and regulations as of the date of this annual report
and do not expect that we will directly incur significant costs for such compliance in the future.</span></p><div>

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

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the Limits and
Measurement Methods of Fuel Consumption of Operating Vehicles and Limits and Measurement Methods of Fuel Consumption of Operating Truck,
fuel consumption of our vehicles is subject to certain limitations prescribed thereunder. We have an internal policy in place to ensure
all vehicles that we purchase are in compliance with these measures. We also engaged in fuel consumption testing project with truck manufacturer
to test the fuel consumption of certain vehicles. In addition, we have invested largely in LNG vehicles to become more environmentally
friendly and to adhere to international 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: justify; text-indent: 0.5in">MingZhu, has obtained ISO14001:2015
Certification, which is an internationally recognized standard for identifying, managing, monitoring and controlling their environmental
issues. As of the date of this annual report, we had not come across any material non-compliance issues in respect of any applicable laws
and regulations on environmental protection. We have not been subject to any administrative sanctions or penalties that have a material
and adverse effect on our financial condition or business operation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>Facilities</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 believe our facilities
are sufficient for our current needs and that, should it be needed, suitable additional space will be available on commercially reasonable
terms to accommodate any such expansion of our operations.</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="border-bottom: black 1.5pt solid; width: 48%; padding-left: 9pt; text-indent: -9pt"><b>Location of property</b></td>
    <td style="width: 1%; text-align: center">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; width: 10%; text-align: center"><b>Approximate<br/>
gross floor<br/>
area</b></td>
    <td style="width: 1%; text-align: center">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; width: 21%; text-align: center"><b>Term of Lease</b></td>
    <td style="width: 1%; text-align: center">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; width: 18%; text-align: center"><b>Facility Usage</b></td></tr>
  <tr>
    <td style="vertical-align: bottom; padding-left: 9pt; text-indent: -9pt">&#160;</td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: bottom; text-align: center"><b><i>(sq. meters)</i></b></td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center">&#160;</td>
    <td style="vertical-align: top; text-align: center">&#160;</td>
    <td style="vertical-align: top; text-align: center">&#160;</td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: bottom; padding-left: 9pt; text-indent: -9pt">27th floor, Yantian Modern Industry Service Center, No.3018, Shayan Road, Yantian District, Shenzhen City, Guangdong Province, PRC</td>
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    <td style="vertical-align: top; text-align: center">2,095.61</td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center">Five years (November 21, 2018 to November 20, 2023)</td>
    <td style="vertical-align: top; text-align: center">&#160;</td>
    <td style="vertical-align: top; text-align: center">Office</td></tr>
  <tr>
    <td style="vertical-align: bottom; padding-left: 9pt; text-indent: -9pt">Room 2307 and Room 2308, Unit A, Building 1, Haitongju, Zhongqing 1st road, Yantian District, Shenzhen City, Guangdong Province, PRC</td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center">99.04</td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center">Three years (September 1, 2021 to August 31, 2024)</td>
    <td style="vertical-align: top; text-align: center">&#160;</td>
    <td style="vertical-align: top; text-align: center">Staff Accommodation</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"><b>Licenses and Permits</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 obtained all necessary
licenses, approvals and permits that are material to our road transportation business, all of which are validly issued and current as
of the date of this annual report. The details of the permits we have obtained by are as follows:</p><div>

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

</div><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-indent: -0.125in; padding-left: 0.125in; width: 33%; border-bottom: black 1.5pt solid"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Approval</b></span></td>
    <td style="width: 1%; text-align: center">&#160;</td>
    <td style="width: 18%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Recipient</b></span></td>
    <td style="width: 1%; text-align: center">&#160;</td>
    <td style="width: 15%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Issuing body</b></span></td>
    <td style="width: 1%; text-align: center">&#160;</td>
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    <td style="vertical-align: bottom; width: 1%; text-align: center">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; vertical-align: bottom; width: 15%; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Date of expiry</b></span></td></tr>
  <tr style="background-color: #CCEEFF">
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    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">MingZhu</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shenzhen Transportation Committee</span></td>
    <td style="vertical-align: bottom">&#160;</td>
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    <td>&#160;</td>
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  <tr>
    <td style="text-indent: -0.125in; padding-left: 0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Road Freight Forwarding Operation Permit</span></td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">MingZhu Pengcheng</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Shenzhen Transportation Committee</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">September 17, 2022</span></td>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">September 16, 2026</span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="text-align: left; text-indent: -0.125in; padding-left: 0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Value-added
Telecommunications Business License</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cheyi Network</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Zhejiang Communications Administration</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">October 8, 2022</span></td>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">October 7, 2026</span></td></tr>
  <tr>
    <td style="text-indent: -0.125in; padding-left: 0.125in; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Value-added Telecommunications Business License</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Zhisheng</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Ministry of Industry and Information Technology</span></td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">September 17, 2022</span></td>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">September 16, 2026</span></td></tr>
  <tr style="background-color: #CCEEFF">
    <td style="text-align: left; vertical-align: top"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Road Transport Operation Permit</span></td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Feipeng</span></td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Xinjiang Road Transport Administration</span></td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">November 9, 2022</span></td>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">November 8, 2026</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">&#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">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Employees</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 had 180 full-time employees
as of December 31, 2022. The following table sets forth the number of our full-time employees categorized by function as of December 31,
2022:</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold">Function</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Number of <br/> Employees</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 88%">Management</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">6</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Administrative and Accounting</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">Safety and Technique</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td>Operations</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">31</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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  </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">We invest significant resources
in the recruitment of employees in support of our rapidly growing business operations. We have established comprehensive training programs,
including orientation programs and on-the-job-training, to enhance performance and service quality. We also regularly conduct employee
trainings in the areas of risk management, managerial skills, company culture and communications.</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 required by regulations
in China, we participate in various government statutory social security plans, including a pension contribution plan, a medical insurance
plan, an unemployment insurance plan, a work-related injury insurance plan, a maternity insurance plan and a housing provident fund. We
are required under PRC law to contribute to social security plans at specified percentages of the salaries, bonuses and certain allowances
of our employees up to a maximum amount specified by the local government from time to time. For risk in relation to our contribution
for employee social security plans, see &#8220;3.D. Risk Factors - Risks Related to Doing Business in China&#8212;Any failure to comply
with relevant regulations relating to social insurance and housing provident fund may subject us to penalty and materially and adversely
affect our business, financial condition, and results of operations.&#8221;</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Recognitions and Awards</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 been accredited by
the China Federation of Logistics &amp; Purchasing as a 4A-grade trucking services company for the period of September 2020 to September
2023. A 4A-grade trucking services provider must meet the criteria of being able to cover routes across provinces and have (1) RMB300
million to RMB1.65 billion freight revenue per year, (2) have been operating for at least three years to five years, (3) have RMB200 million
to RMB1.1 billion total assets (no higher than 70% of debt ratio), (4) own 400 to 1500 transport vehicles (or total weight of 2000 to
7500 tones), (5) have 30 to 50 operating outlets, and (6) operate an effective institution with operating systems for management, finance,
statistics, and have technical departments in place.</p><div>

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




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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition to our 4A-grade
accreditation, we have also been recognized as a Green Card Enterprise according to the qualitative assessments of Four Rates system set
by the Shenzhen Bureau of Transportation in 2007 and 2008. Furthermore, we have received the following awards and recognitions that are
notable within the industry:</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="border-bottom: black 1.5pt solid; width: 10%"><b>Year of<br/>
Award</b></td>
    <td style="width: 1%; text-align: center">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; width: 10%; text-align: center"><b>Recipient</b></td>
    <td style="width: 1%; text-align: center">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; width: 42%; text-align: center"><b>Award</b></td>
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    <td style="border-bottom: black 1.5pt solid; width: 35%; text-align: center"><b>Awarding organization or authority</b></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: justify">2019</td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center">MingZhu</td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: justify">2018 Shenzhen National Road Traffic Safety Advanced Unit</td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: justify">Shenzhen Public Security Bureau Traffic Police Station</td></tr>
  <tr>
    <td style="vertical-align: top; text-align: justify">2017</td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center">MingZhu</td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: justify">Guangdong Province Road General Freight Transport Enterprise Integrity Evaluation AAA (Excellent)</td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: justify">Guangdong Provincial Department of Transportation</td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: justify">2017</td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center">MingZhu</td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: justify">Yantian District Advanced Enterprises with Harmonious Labor Relations</td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: justify">Shenzhen Yantian District Labor Relations Coordination Committee</td></tr>
  <tr>
    <td style="vertical-align: top; text-align: justify">2016</td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center">MingZhu</td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: justify">Advanced Unit of Transportation Safety Production</td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: justify">Shenzhen Port and Freight Transport Administration</td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: justify">2014</td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center">MingZhu</td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: justify">Outstanding Contribution Award</td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: justify">Yantian Chamber of Logistics</td></tr>
  <tr>
    <td style="vertical-align: top; text-align: justify">2010</td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center">MingZhu</td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: justify">Excellent Enterprise</td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: justify">Shenzhen Municipal Transportation Bureau and Shenzhen Container Trailer Transport Association</td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: justify">2009</td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: center">MingZhu</td>
    <td style="vertical-align: bottom; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: justify">Shenzhen Advanced Unit for Transportation Safety Production</td>
    <td style="vertical-align: top; text-align: justify">&#160;</td>
    <td style="vertical-align: top; text-align: justify">Shenzhen Municipal Transportation Bureau]</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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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>Legal Proceedings</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 January 20, 2022, Shenzhen
Xincang Freight Co., Ltd. submitted the Civil Complaint to The People&#8217;s Court of Yantian District, requesting the defendant Jian
Yang to compensate for the economic loss of RMB 233,055, judgment of the defendant Yangang Pearl for Jian Yang&#8217;s compensation liability
to assume joint liability. According to the civil order issued by The People&#8217;s Court of Yantian District on January 27, 2022, the
applicant Shenzhen Xincang Freight Co., Ltd. applies for property preservation in the case of the liability dispute between the applicant
Shenzhen Xincang Freight Co., Ltd. of seizing and freezing the property worth RMB 234,990.12 under the name of the respondent Mingzhu.
According to the notice of response issued by The People&#8217;s Court of Yantian District, on February 10, 2022, the case of the liability
dispute between the plaintiff and the defendant Mingzhu and Jian Yang was filed by the Court on January 21, 2022. A trial is scheduled
for March 18, 2022. As of the date of this annual report, the case had been concluded and the Company had paid out the claimed amount
of compensation.</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">Other than the proceeding
disclosed above, we are currently not a party to any legal or administrative proceedings that will likely have material impact on our
business operations, financial condition or results of operations. We may from time to time be subject to various legal or administrative
claims and proceedings arising in the ordinary course of business. Litigation or any other legal or administrative proceeding, regardless
of the outcome, may result in additional costs and diversion of our resources, including our management&#8217;s time and attention.</p><div>

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




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

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Business license</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">Any company that conducts
business in the PRC must have a business license that covers a particular type of work. Our business license covers our present business
of road transportation. Prior to expanding our business beyond that of our business license, we are required to apply and receive approval
from the PRC government.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>Employment laws</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">Enterprises in China are mainly
subject to the following PRC labor laws and regulations: Labor Law of the PRC, PRC Labor Contracts Law, the Social Insurance Law of the
PRC, the Regulation of Insurance for Work-Related Injury, the Regulations on Unemployment Insurance, the Provisional Measures on Insurance
for Maternity of Employees, the Interim Regulation on the Collection and Payment of Social Insurance Premiums, the Administrative Regulation
on Housing Fund and other related regulations, rules and provisions issued by the relevant governmental authorities from time to time.</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 Labor Law of the
PRC, which was promulgated in July 1994, effective January 1995, and most recently amended in December 2018, companies must enter into
employment contracts with their employees, based on the principles of equality, consent and agreement through consultation. Companies
must establish and effectively implement a system of ensuring occupational safety and health, educate employees on occupational safety
and health, preventing work-related accident and reducing occupational hazards. Companies must also pay for their employees&#8217; social
insurance premium.</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 employment contract is the PRC Labor Contracts Law, which was promulgated in June 2007 and amended in December 2012. Pursuant
to the PRC Labor Contracts Law, employers shall establish employment relationship with employees on the date that they start employing
the employees. To establish an employment, a written employment contract shall be concluded, or employers will be liable for the illegal
actions. Furthermore, the probation period and liquidated damages shall be restricted by the law to safeguard employees&#8217; rights
and interests.</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 required under the Social
Insurance Law of the PRC, the Regulation of Insurance for Work-Related Injury, the Regulations on Unemployment Insurance, the Provisional
Measures on Insurance for Maternity of Employees and the Administrative Regulation on Housing Fund, enterprises in China are obliged to
provide employees with welfare schemes covering pension insurance, unemployment insurance, maternity insurance, injury insurance, medical
insurance and housing accumulation fund.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><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">&#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 PRC foreign currency
exchange regulations applicable to us, the Renminbi is convertible for current account items, including the distribution of dividends,
interest payments, and trade and service-related foreign exchange transactions. Conversion of Renminbi for capital account items, such
as direct investment, loan, security investment and repatriation of investment, however, is still subject to the approval of the PRC State
Administration of Foreign Exchange, or SAFE. Foreign-invested enterprises may buy, sell and/or remit foreign currencies only at those
banks authorized to conduct foreign exchange business, after providing valid commercial documents and, in the case of capital account
item transactions, obtaining approval from SAFE. Capital investments by foreign-invested enterprises outside of China are also subject
to limitations, which include approvals by the Ministry of Commerce, SAFE and the State Reform and Development Commission.</p><div>

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




</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>Mandatory statutory reserve and dividend distributions</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">Under applicable PRC regulations,
foreign-invested enterprises in China may pay dividends out of their accumulated profits only, if any, as 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 for its general reserve until the cumulative amount of such reserve reaches
50% of its registered capital. These reserves are not distributable as cash dividends. The board of directors of a foreign-invested enterprise
has the discretion to allocate a portion of its after-tax profits to staff welfare and bonus funds, which may not be distributed to equity
owners except in the event of liquidation.&#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>Overseas Listings </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">Under the M&amp;A Rules, were
jointly adopted by six PRC regulatory authorities, including CSRC, in August 2006, and most recently amended in June 2009, a foreign investor
is required to obtain necessary approvals when (i) a foreign investor acquires equity in a domestic non-foreign invested enterprise thereby
converting it into an FIE, or subscribes for new equity in a domestic enterprise via an increase of registered capital thereby converting
it into an FIE; or (ii) a foreign investor establishes an FIE which purchases and operates the assets of a domestic enterprise, or which
purchases the assets of a domestic enterprise and injects those assets to establish an FIE. According to the M&amp;A Rules, where a domestic
company or enterprise, or a domestic natural person, through an overseas company established or controlled by it/him, acquires a domestic
company which is related to or connected with it/him, approval from MOFCOM is required.</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 February 17, 2023, the
CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the &#8220;Trial Administrative
Measures&#8221;) and relevant supporting guidelines (together with the Trial Administrative Measures, the &#8220;New Administrative Rules
Regarding Overseas Listings&#8221;), which came into effective on March 31, 2023. According to the New Administrative Rules Regarding
Overseas Listings, a company based in the mainland of China that seeks to offer and list securities in overseas markets should fulfill
the filing procedure with the CSRC as per requirement of the Trial Administrative Measures. In particular, where a domestic company seeks
to indirectly offer and list securities in overseas markets, the issuer should designate a major domestic operating entity as the domestic
responsible entity to file with the CSRC. Initial public offerings or listings in overseas markets should be filed with the CSRC within
3 working days after the relevant application is submitted overseas. Subsequent securities offerings of an issuer in the same overseas
market where it has previously offered and listed securities should be filed with the CSRC within 3 working days after the offering is
completed. The required filing materials with the CSRC include (without limitation) record-filing reports and related undertakings and
PRC legal opinions issued by domestic law firms (with related undertakings), in which the VIE structure (if applicable) and reasons and
risk factor thereof is required to be clarified in details.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>Regulations Relating to Taxation in the PRC</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>Enterprise Income Tax</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">In accordance with the PRC
Enterprise Income Tax Law (the &#8220;EIT Law&#8221;, promulgated in March 2007 and last amended in December 2018) and the Regulations
on the Implementation of Enterprise Income Tax Law of the PRC (the &#8220;EIT Regulations&#8221;, promulgated in December 2007 and last
amended in April 2019), enterprises are classified as either &#8220;resident enterprises&#8221; or &#8220;non-resident enterprises.&#8221;
Enterprises that are set up in the PRC under the PRC laws, or that are set up in accordance with the law of the foreign country (region)
whose actual administration institution is in PRC, shall be considered as &#8220;resident enterprises.&#8221; Enterprises established
under the law of the foreign country (region) with &#8220;de facto management bodies&#8221; outside the PRC, but have set up institutions
or establishments in PRC or, without institutions or establishments set up in the PRC, have income originating from PRC, shall be considered
as &#8220;non-resident enterprises.&#8221; The Circular Related to Relevant Issues on the Identification of a Chinese holding Company
Incorporated Overseas as a Residential Enterprise under the Criterion of De Facto Management Bodies Recognizing issued by the State Administration
of Taxation (the Circular 82) promulgated by the State Administration of Taxation on April 22, 2009 and last revised in December 2017
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;de facto management bodies&#8221; located within China if the following requirements are satisfied: (i) the senior management
and core management departments in charge of its daily operations function mainly in China; (ii) its financial and human resources decisions
are subject to determination or approval by persons or bodies in China; (iii) its major assets, accounting books, company seals and minutes
and files of its board and shareholders&#8217; meetings are located or kept in China; and (iv) half or more than half of the enterprise&#8217;s
directors or senior management with voting rights reside in China. Although the circular only applies to offshore enterprises controlled
by PRC enterprises and not those controlled by PRC individuals or foreigners, the determining criteria set forth in the circular may reflect
the State Administration of Taxation&#8217;s general position on how the &#8220;de facto management body&#8221; test should be applied
in determining the tax resident status of offshore enterprises, regardless of whether they are controlled by PRC enterprises, individuals
or foreigners.</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">A resident enterprise shall
pay EIT on its income originating from both inside and outside PRC at an EIT rate of 25%. A non-resident enterprise that has establishments
or places of business in the PRC shall pay EIT on its income originating from PRC obtained by such establishments or places of business,
and on its income which deriving outside PRC but has an actual connection with such establishments or places of business, at the EIT rate
of 25%. A non-resident enterprise that does not have an establishment or place of business in the PRC, or it has an establishment or place
of business in the PRC but the income has no actual connection with such establishment or place of business, shall pay EIT on its passive
income derived from the PRC at a reduced EIT rate of 10%.</p><div>

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




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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">According to the Public Notice
Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-Tax Resident Enterprises which was promulgated
by SAT on February 3, 2015 and came into effect on the same day, revised in October 2017 and December 2017, where a non-resident enterprise
indirectly transfers equities and other assets of a PRC resident enterprise to avoid the EIT payment obligation by making an arrangement
with no reasonable business purpose, such indirect transfer shall be redefined and recognized as a direct transfer in accordance with
the provisions of the EIT Law. Where the EIT on the income from the indirect transfer of real estate or equities shall be paid in accordance
with the provisions of this Announcement, the entity or individual that directly assumes the obligation to make relevant payments to the
transferor according to the provisions of the relevant laws or as agreed upon in the contract shall be the withholding agent. On October
17, 2017, the SAT issued the Announcement of the State Administration of Taxation on Issues Concerning the Withholding of Non-resident
Enterprise Income Tax at Source (the &#8220;SAT Bulletin 37), which came into effect on December 1, 2017 and revised in June 2018. The
SAT Bulletin 37 further clarifies the practice and procedure of the withholding of non-resident enterprise income tax.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Value-Added Tax</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 Provisional
Regulations on Business Tax which was promulgated by the State Council in December 1993 and revised in November 2008, organizations and
individuals engaging in provision of labor services stipulated in these regulations, transfer of intangible assets or sale of immovables
in China shall be taxpayers of business tax and shall pay business tax and the applicable business rate for transportation industry is
3%. The Provisional Regulations on Business Tax was abolished in November 2017. In accordance with Circular on Comprehensively Promoting
the Pilot Program of the Collection of Value-added Tax in Lieu of Business Tax (Caishui [2016] No. 36), which was promulgated on March
23, 2016 and came into effect on May 1, 2016 and has been partially abolished, upon approval of the State Council, the pilot program of
the collection of value-added tax (the &#8220;VAT&#8221;) in lieu of business tax shall be promoted nationwide in a comprehensive manner
starting from May 1, 2016, and all business tax payers engaged in the building industry, the real estate industry, the financial industry
and the life service industry shall be included in the scope of the pilot program with regard to payment of value-added tax instead of
business tax. For transportation service income, the application VAT tax rate is 11%. For international transportation service income,
the application VAT tax rate is 0%.</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 of the PRC (the &#8220;VAT Regulations&#8221;) last amended in November 2017 and effective on the same
day and its implementation rules, all entities or individuals in the PRC engaging in the sale of goods, providing labor services of processing,
repairs or maintenance, or selling services, intangible assets or real property in China, or importing goods to China are required to
pay the VAT. The amount of VAT payable is calculated as &#8220;output VAT&#8221; minus &#8220;input VAT.&#8221; The rate of VAT is 17%
for those engaging in the sale of goods or labor services or tangible personal property leasing services or importation of goods except
as otherwise provided by the VAT Regulations. Furthermore, pursuant to the VAT Regulations, the tax rate of VAT is 11% for the sales of
the service of transportation, posting, basic telecommunications, construction and leasing real estate, the sale of real estate and the
transfer of land use right, or sell or import the goods listed in the VAT Regulations.</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 2018, the Ministry
of Finance (&#8220;MOF&#8221;) and SAT jointly promulgated the Circular of the Ministry of Finance and the State Administration of Taxation
on Adjustment of Value-Added Tax Rates, or Circular 32, according to which for VAT taxable sales acts or importation of goods originally
subject to value-added tax rates of 17% and 11% respectively, such tax rates shall be adjusted to 16% and 10%, respectively. Circular
32 became effective on May 1, 2018 and shall supersede existing provisions which are inconsistent with Circular 32.</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 March 2019, MOF, SAT and
General Administration of Customs (&#8220;GAC&#8221;) jointly promulgated the Announcement on Policies for Deepening the VAT Reform, or
Circular 39, according to which for general VAT payers&#8217; sales activities or imports that are subject to VAT at an existing applicable
rate of 16% or 10%, the applicable VAT rate is adjusted to 13% or 9% respectively. This Announcement came into force on April 1, 2019.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Urban Maintenance and Construction Tax</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 Provisional
Regulation on Urban Maintenance and Construction Tax of the PRC as amended in January 2011, any taxpayer, whether an entity or individual,
of consumption tax, value-added tax or business tax shall be required to pay urban maintenance and construction tax based on the total
amount of consumption tax, value-added tax or business tax paid by such taxpayer. The tax rate shall be 7% for a taxpayer whose domicile
is in an urban area, 5% for a taxpayer whose domicile is in a county or a town, and 1% for a taxpayer whose domicile is not in any urban
area or county or town.</p><div>

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




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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Education Surcharge</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 Provisional
Provisions on Imposition of Education Surcharge as amended in January 2011, a taxpayer, whether an entity or individual, of consumption
tax, value-added tax or business tax shall pay an education surcharge at a rate of 3% on the total amount of consumption tax, value-added
tax or business tax paid by such entity, unless such obliged taxpayer is instead required to pay a rural area education surcharge as stipulated
under the Notice of the State Council on Raising Funds for Schools in Rural Areas that promulgated by State Council in December 1984.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Dividend Withholding Tax</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 EIT Law prescribes a standard
withholding tax rate of 20% on dividends and other China-sourced income of non-resident enterprises that have not set up institutions
or establishments in China, or have set up institutions or establishments but the income obtained by the said enterprises has no actual
connection with the set up institutions or establishments. However, the EIT Regulations reduced the rate from 20% to 10% with the implementation
date starting from 1 January 2008. Pursuant to the EIT Law and the EIT Regulations, an income tax rate of 10% will normally be applicable
to dividends payable to investors that are &#8220;non-resident enterprises&#8221;, and gains derived by such investors, which (a) do not
have an establishment or place of business in mainland China or (b) have an establishment or place of business in mainland China, but
the relevant income is not effectively connected with the establishment or place of business to the extent such dividends and gains are
derived from sources within mainland China. Such income tax on the dividends may be reduced pursuant to a tax treaty between China and
the jurisdictions in which our foreign shareholders reside.</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 Arrangement
Between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention
of Fiscal Evasion with Respect to Tax on Income (the &#8220;Double Tax Avoidance Arrangement&#8221;), and other applicable mainland Chinese
laws, if a Hong Kong resident enterprise is determined by the competent tax authority in mainland China to have satisfied the relevant
conditions and requirements under such Double Tax Avoidance Arrangement and other applicable laws, the 10% withholding tax on the dividends
the Hong Kong resident enterprise receives from a mainland China resident enterprise may be reduced to 5% upon receiving approval from
in-charge tax authority. However, based on the Notice on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax
Treaties (the &#8220;Notice No. 81&#8221;) issued in February 2009 by the SAT, if the relevant Chinese tax authorities determine, in their
discretion, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven,
such Chinese tax authorities may adjust the preferential tax treatment. Based on Notice of the State Administration of Taxation on How
to Understand and Determine the &#8220;Beneficial Owners&#8221; in Tax Agreements (the &#8220;Notice No. 601&#8221;), issued in October
2009 by the SAT, conduit companies, which are established for the purpose of evading or reducing tax, or transferring or accumulating
profits, shall not be recognized as beneficial owners and thus are not entitled to the above-mentioned reduced income tax rate of 5% under
the Double Tax Avoidance Arrangement. In February 2018, SAT issued the Announcement of the State Administration of Taxation on Issues
Relating to &#8220;Beneficial Owner&#8221; in Tax Treaties, which became effective on April 1 and &#8220;the Notice 601&#8221; was repealed
simultaneously. The Announcement of the State Administration of Taxation on Issues Relating to &#8220;Beneficial Owner&#8221; in Tax Treaties
stipulates issues relating to determination of &#8220;beneficial owner&#8221; status in clauses of tax treaties on dividends, interest
and royalties.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>Tax Collection and Payment</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 Law of the PRC on the
Administration of Tax Collection (the &#8220;Tax Collection Law&#8221;), which was promulgated by the Standing Committee of National People&#8217;s
Congress in September 1992 and last amended in April 2015, prescribes a regulatory framework of tax collection and payment in the PRC
and the Implementation Regulations for the Law of the PRC on Administration of Tax Collection as amended in February 2016 has made further
provisions on the basis of the Tax Collection Law. Pursuant to the Tax Collection Law, a taxpayer or withholding agent shall pay or deliver
tax payments in compliance within the time limit specified by laws or administrative regulations, or as determined by taxation authorities
in accordance with laws or administrative regulations. Where a taxpayer or a withholding agent fails to pay or underpays the amount of
tax that should be paid or remitted within the specified time, the tax authorities shall order the taxpayer or withholding agent to pay
or remit the tax within the specified time limit, and impose a penalty for late payment on a daily basis at the rate of 0.05% of the amount
of tax in arrears from the date the tax payment is defaulted. If the taxpayer or withholding agent still fails to do so on the expiration
of the time limit, the tax authorities may recover such unpaid taxes by adopting compulsory enforcement measures, and impose a fine of
not less than 50% but not more than five times the amount of tax the taxpayer or withholding agent fails to pay or underpays or fails
to remit. As prescribed by the Tax Collection Law, such compulsory enforcement measures adopted by the tax authorities may include (i)
to notify in writing the bank or any other financial institution with which the taxpayer, withholding agent or tax payment guarantor has
opened an account to withhold and remit the taxes from its deposits; (ii) to attach, seal up or, in accordance with law, auction or dispose
of the commodities, goods or other property of the taxpayer, withholding agent or tax payment guarantor, valued equivalent to the taxes
payable, and to use the proceeds therefrom to offset the taxes payable. Furthermore, the taxation authorities shall also announce the
tax payments defaulted by taxpayers regularly.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Regulations Relating to Transportation Industry</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 Regulations
of the PRC on Road Transport promulgated by the State Council in April 2004 and last amended in March 2019, the permit on the operation
of the road transportation business, issued by the local transportation authority, except otherwise provided by these regulations, is
required for any individual or entity to conduct its road transportation business. The transportation vehicles shall take operation licenses
which are prohibited from being assigned or leased. Under the Regulations of the PRC on Road Transport, a company engaged in the operation
of road transportation without road transportation operation licenses shall be ordered to stop its operation by the administrations of
road transportation at the county level or above; any illegal gains shall be confiscated and the company shall be fined not less than
2 times but not more than 10 times of the amount of the illegal gains; where no illegal gains or the illegal gains is less than RMB 20,000,
the company shall be fined RMB 30,000 to RMB 100,000. The Regulations of the PRC on Road Transport also clarifies that foreign investors
may, in accordance with relevant PRC laws, administrative regulations and relevant state regulations, invest in road transport operations
and road transport related businesses in the territory of the People&#8217;s Republic of China through Chinese-foreign joint ventures,
Sino-foreign cooperation, and sole proprietorship.</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 2001, the Provisions on
the Administrative of the Foreign-Invested Road Freight Forwarding Industry was promulgated and amended several times, which required
that FIEs, engaging in road goods transport, road goods portage and loading and unloading, road goods storage and other supplementary
services and vehicle maintenance relating to road transport and foreign invested enterprises for the provision of road freight forwarding
services, including the transportation of goods by road, handling, warehousing and other related services, must obtain the Road Freight
Forwarding Operation Permit from the provincial competent departments of communications and these enterprises must satisfy specific qualifications
and conditions. However, the Provisions on the Administrative of the Foreign-Invested Road Freight Forwarding Industry has been revoked
from November 2018 and therefore the business engaged by the Group is no longer regulated by the above provisions.</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 Notice of
Guangdong Provincial Department of Transportation on Delegating the Examination and Approval Authority of the Business Road Transportation
of Hong Kong and Macao Enterprises (Yue Jiao Yun [2012] No.1118), the examination and approval authority of the Hong Kong and Macao commercial
road transportation enterprises was delegated to the municipal department of transportation above local level, and the Hong Kong and Macao
enterprises shall obtain the Road Freight Forwarding Operation Permit from the municipal department of transportation above local level.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>Regulations Relating to International Freight
Forwarding Agencies</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 might be considered as
an international freight forwarding agency for engaging in the air freight business before, even though we have suspended this type of
business for now. According to the Administrative Provisions of the People&#8217;s Republic of China on International Freight Forwarders
(promulgated in 1995 and revised in 2004), its detailed rules for implementing (promulgated in 2004) and the Tentative Measures on Putting
on Record of International Freight Forwarding Agencies (promulgated in 2005 and revised in 2016), all international freight forwarding
agencies and their branches registered with state industrial and commercial administration in accordance with laws should be filed with
the MOFCOM or the governmental authorities authorized by the MOFCOM. An international freight forwarding agency may accept a commission
to operate part or all of the following businesses, including (i) to book ship&#8217;s holds and warehouses, (ii) to supervise the loading
and unloading of freight and the assembling and dismantling of containers, (iii) multi-forms of international transportation, (iv) international
express deliveries excluding private letters, (v) to submit customs declarations and undergo customs quarantine and insurance inspections,
(vi) to prepare the related bills and certificates, pay transport charges, settle accounts and miscellaneous fees, and (vii) any other
businesses of an international forwarder. An international freight forwarding agency should conduct its business within its ratified scope.
To engage in the above-mentioned businesses, an international freight forwarding agency must register with relevant competent authorities
as required by the related laws and administrative rules and regulations. International freight forwarding agencies can also be mutually
entrusted to conduct business as stipulated in these regulations. On January 16, 2013, the MOFCOM issued the Guiding Opinions on Accelerating
the Healthy Development of International Freight Forwarding and Logistics Industry, which further provides that the MOFCOM entrusts the
China International Freight Forwarders Association (&#8220;CIFA&#8221;) to oversee the filing of international freight forwarding enterprises.
Accordingly, an international freight forwarding enterprise should complete filings with the CIFA or its branch.</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">Air freight business is also
regulated by the Customs Law of the People&#8217;s Republic of China (Revised in 2017), the Administrative Provisions of the Customs of
the People&#8217;s Republic of China on the Registration of Customs Declaration Entities (Revised in 2018), the Law of the People&#8217;s
Republic of China on Imported and Exported Commodities Inspection (Revised in December 2018) and its Implementing Regulations revised
in 2019. Pursuant to the Customs Law of the People&#8217;s Republic of China (Revised in 2017) revised by the NPC on April 11, 2017, the
consignor or consignee of the goods exported or imported as well as a customs declaration enterprise must register themselves for declaration
activities at customs in accordance with the law. Anyone who is not registered at the customs shall not conduct declaration activities.
Customs brokers or customs declaration persons shall not make customs declaration illegally on behalf of others or conduct customs declaration
activities beyond their business scope. On April 16, 2018, the General Administration of Customs circulated the Announcement on Matters
relating to the Consolidation of Enterprises&#8217; Qualifications for Customs Declaration and Declaration for Inspection and Quarantine
(&#8220;Announcement 28&#8221;), the record-filing for declaration agencies for inspection and quarantine and the registration for customs
declaration enterprises will be consolidated into the registration for customs declaration enterprises. From April 20, 2018, an enterprise
will simultaneously become qualified for the customs declaration and the declaration for inspection and quarantine, once it has registered
itself or filed a record with the customs and the customs will approve and issue the Certificate of the Customs of the People&#8217;s
Republic of China on Registration of the Customs Declaration Entity and the Registration Form for Declaration Enterprises for Entry-Exit
Inspection and Quarantine affixed with its special seal for registration and record-filing to the registered or recorded enterprise simultaneously.
On October 26, 2018, the General Administration of Customs circulated the Announcement on Matters Related to Promoting the Integration
of Customs Inspection and Optimizing the Registration of Customs Declaration (&#8220;Announcement 143&#8221;), according to which, from
October 29, 2018, the Certificate of the Customs of the People&#8217;s Republic of China on Registration of the Customs Declaration Entity
issued by the customs to the customs declaration enterprise that has completed the registration automatically reflects the two qualifications
for customs declaration and the declaration for inspection and quarantine. The original &#8220;Registration Form for Declaration Enterprises
for Entry-Exit Inspection and Quarantine&#8221; and &#8220;Registration Form for Entry-Exit Inspection and Quarantine Reporters&#8221;
will no longer be issued. Any enterprises engaged in the business of making customs declarations and making the declaration for inspection
and quarantine as an agent should obtain relevant certificate and make filings for customs declaration persons as prescribed by the foresaid
regulations.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Regulations Relating to Work Safety</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 Work Safety
Law of the PRC promulgated by the Standing Committee of National People&#8217;s Congress in June 2002 and was recently amended in August
2014; road transportation entities shall establish a work safety management office or be staffed with full-time work safety management
personnel. In March 2015, the Ministry of Transportation issued the Notice on Implementing the Work Safe Law, pursuant to which, the relevant
enterprise shall establish and improve the safety production responsibility system covering all aspects of production and operation, clear
standards and responsibility to the post, solidly promote the standardization of production safety and strengthen safety production management.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>Regulations Relating to Dividend Distributions</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 the FIL, foreign
investors may, according to the present Law, freely remit into or out of China, in RMB or any other foreign currency, their capital contributions,
profits, capital gains, income from asset disposal, intellectual property royalties, lawfully acquired compensation, indemnity or liquidation
income and so on within the territory of China. In addition, pursuant to the Company Law, a wholly foreign-owned 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 its
cumulative total reserve funds reach 50% of its registered capital. These reserve funds, however, may not be distributed as cash dividends.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Regulations Relating to Foreign Exchange</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">Circular on Relevant Issues
Concerning Foreign Exchange Control on Domestic Residents&#8217; Offshore Investment and Financing and Round-trip Investment Through Special
Purpose Vehicles, or Circular 37, issued by SAFE in and effective July 2014, regulates foreign exchange matters in relation to the use
of special purpose vehicles, or SPVs, by PRC residents or entities to seek offshore investment and financing and conduct round trip investment
in China. Under Circular 37, a SPV refers to an offshore entity established or controlled, directly or indirectly, by PRC residents or
entities for the purpose of seeking offshore financing or making offshore investment, using legitimate domestic or offshore assets or
interests, while &#8220;round trip investment&#8221; refers to the direct investment in China by PRC residents or entities through SPVs,
namely, establishing FIEs to obtain the ownership, control rights and management rights. Circular 37 requires that, before making contribution
into an SPV, PRC residents or entities are required to complete foreign exchange registration with SAFE or its local branch. Circular
37 further provides that option or share-based incentive tool holders of a non-listed SPV can exercise the options or share incentive
tools to become a shareholder of such non-listed SPV, subject to registration with SAFE or its local branch.</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">PRC residents or entities
which have contributed legitimate domestic or offshore interests or assets to SPVs but have yet to obtain SAFE registration before the
implementation of the Circular 37 shall register their ownership interests or control in such SPVs with SAFE or its local branch. An amendment
to the registration is required if there is a material change in the registered SPV, such as any change of basic information (including
change of such PRC resident&#8217;s name and operation term), increases or decreases in investment amounts, transfers or exchanges of
shares, or mergers or divisions. Failure to comply with the registration procedures set forth in Circular 37, or making misrepresentation
or failure to disclose controllers of FIE that is established through round-trip investment, may result in restrictions on the foreign
exchange activities of the relevant FIEs, including payment of dividends and other distributions, such as proceeds from any reduction
in capital, share transfer or liquidation, to its offshore parent or affiliate, and the capital inflow from the offshore parent, and may
also subject relevant PRC residents or entities to penalties under PRC foreign exchange administration regulations. In February 2015,
SAFE further promulgated the Circular on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct
Investment, or SAFE Circular 13, effective from June 2015 and partially repealed on December 30, 2019. 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. Circular 37
is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make in the future.
All of our shareholders who, to our knowledge, are subject to the above SAFE regulations have completed the necessary registrations with
the local SAFE branch or qualified banks as required by SAFE 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">In March 2015, SAFE promulgated
the Circular on Reforming the Administration Approach of Foreign Exchange Settlement of Capital of Foreign-invested Enterprises, or Circular
19, effective from June 2015 and partially repealed on December 30, 2019. According to Circular 19, the foreign exchange capital of FIEs
shall be subject to the Discretionary Foreign Exchange Settlement. The Discretionary Foreign Exchange Settlement refers to the foreign
exchange capital in the capital account of an FIE for which the rights and interests of monetary contribution has been confirmed by the
local foreign exchange bureau (or the book-entry registration of monetary contribution by the banks) can be settled at the banks based
on the actual operational needs of the FIE. The proportion of Discretionary Foreign Exchange Settlement of the foreign exchange capital
of an FIE is temporarily determined to be 100%. The Renminbi converted from the foreign exchange capital will be kept in a designated
account and if an FIE needs to make further payment from such account, it still needs to provide supporting documents and go through the
review process with the banks.</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">SAFE issued the Circular on
Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or Circular 16, in June 2016, which
became effective simultaneously. Pursuant to Circular 16, enterprises registered in the PRC may also convert their foreign debts from
foreign currency to Renminbi on a discretionary basis. Circular 16 provides an integrated standard for conversion of foreign exchange
under capital account items (including but not limited to foreign currency capital and foreign debts) on a discretionary basis which applies
to all enterprises registered in the PRC. Circular 16 reiterates the principle that Renminbi converted from foreign currency-denominated
capital of a company may not be directly or indirectly used for purposes beyond its business scope or prohibited by PRC laws or regulations,
while such converted Renminbi shall not be provided as loans to its non-affiliated entities. As Circular 16 is newly issued, and SAFE
has not provided detailed guidelines with respect to its interpretation or implementations, it is uncertain how these rules will be interpreted
and implemented.</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 January 26, 2017, SAFE
promulgated the Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Authenticity and Compliance Verification,
or Circular 3, which took effect on the same day. Circular 3 sets out various measures to tighten authenticity and compliance verification
of cross-border transactions and cross-border capital flow, which include without limitation requiring banks to verify board resolutions,
tax filing form, and audited financial statements before wiring foreign invested enterprises&#8217; foreign exchange distribution above
US$50,000, and strengthening genuineness and compliance verification of foreign direct investments.</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 November 2012, SAFE issued
the Circular of Further Improving and Adjusting Foreign Exchange Administration Policies on Foreign Direct Investment, as amended in May
2015 and October 2018 and partially repealed on December 30, 2019, respectively, foreign exchange control methods for direct investments
has been improved through cancelling and adjusting certain administrative licensing items for foreign exchange control for direct investments.
Approval formalities for account opening and deposit for foreign currency accounts under direct investments and approval formalities for
reinvestment of domestic legitimate income of foreign investors have been cancelled. Administration for conversion of foreign currency
capital into Renminbi by foreign investment enterprises has also been improved.</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 PRC subsidiaries&#8217;
distributions to their offshore parents are required to comply with the requirements as described above.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Regulations Relating to Funds Transfer to PRC
Subsidiaries </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 are permitted under PRC
laws and regulations as an offshore holding company to provide funding to our PRC subsidiaries through loans or capital contributions,
subject to satisfaction of applicable government registration, approval and filing requirements.</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 event of subsequent
changes in the capital of the FIE such as increase in capital, such FIE shall complete change filing formalities with competent administrations
for market regulation in accordance with relevant regulations, and registration change formalities shall also be completed with the competent
administration of foreign exchange according to the Provisions on Foreign Exchange Control on Direct Investments in China by Foreign Investors.
In addition, pursuant to Circular 16, foreign invested enterprise shall use its capital pursuant to the principle of authenticity and
self-use within its business scope. The capital of a foreign invested enterprise 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; 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
Measures on Administration of Foreign Debt (the &#8220;Foreign Debt Measures&#8221;) issued by the State Development Planning Commission
(revised), Ministry of Finance and SAFE in January 2003 and became effective on March 1, 2003, any loans provided by us to our PRC subsidiaries
in foreign currencies shall be classified as foreign debt under the Foreign Debt Measures. According to the Foreign Debt Measures, the
sum of cumulative accrued amounts of medium-term to long-term foreign loans and balance amounts of short-term foreign loans taken by a
foreign investment enterprise shall be limited to the difference between the total project investment amount approved by the government
and the amount of registered capital. Foreign investment enterprises may take foreign loans freely within the scope of difference.</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 January 12, 2017, the PBOC
issued the Notice of People&#8217;s Bank of China on Matters Concerning Macro-Prudential Management on All-round Cross-border Financing
(the &#8220;No.9 Notice&#8221;), which improved the policy framework of the cross-border financing. The No.9 Notice clarifies the new
calculation methods of the upper limit of the risk-weighted balance for all types of cross-border financing, in particular, the upper
limit for risk-weighted balance for cross-border financing equals to the capital or the net assets multiplied by the leverage rate of
cross-border financing and the macro-prudential adjustment parameters. In the case of our PRC subsidiaries, the capital or the net assets
is calculated at the net assets of each subsidiary, the leverage rate for cross-border financing for an enterprise is 2, and the macro-prudential
adjustment parameter is 1 (the &#8220;All-Round Mode&#8221;). On March 11, 2020, the PBOC and SAFE promulgated the Circular of the People&#8217;s
Bank of China and the State Administration of Foreign Exchange on Adjusting the Macro-prudential Regulation Parameter for Full-covered
Cross-border Financing, which provides that based on the current macro economy and international balance of payments, the macro-prudential
regulation parameter as set forth in the Notice 9 is updated from 1 to 1.25. Currently, the implementation of the foregoing methodologies
in cross-border financing have not been formally determined by the PBOC and the SAFE. In the practice, according to the SAFE Shenzhen
Branch, which is the competent local SAFE authority for our PRC subsidiaries, FIEs may choose between the Investment Difference Mode and
the All-round Mode, but the enterprise cannot change the methodology once it makes the choice and the enterprise may be required to submit
different materials for these two methodologies. Based on the current registered capital and total project investment amount, if we would
provide funding to our PRC subsidiaries through loans and use the Investment Difference Mode, our PRC subsidiaries will be required to
increase its registered capital and total project investment amount. Alternatively, if we choose to use the All-Round Mode, the amount
of loans we can make to our PRC subsidiaries as calculated according to the No.9 Notice will not be more than 2.5 times of the net assets
of such entities.</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, as the debtors of
cross-border financing, our PRC subsidiaries are also required to comply with certain registration formalities for execution of foreign
debt contracts with the foreign exchange bureau at the locality within fifteen working days after signing the contracts according to the
Notice of State Administration of Foreign Exchange on Promulgation of the Administrative Measures on Registration of Foreign Debt which
was promulgated by the SAFE in April 2013 and revised in May 2015.</p><div>

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


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#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 Circular of
the National Development and Reform Commission on Promoting the Administrative Reform of the Record-filing and Registration System for
the Issuance of Foreign Debts by Enterprises promulgated on September 14, 2015 (&#8220;Circular 2044&#8221;), before the issuance of foreign
loans, enterprises shall first apply to the NDRC for record-filing and registration procedures and shall report the information on the
issuance to NDRC within 10 business days after completion of each issuance. The term &#8220;foreign loan&#8221; shall mean RMB-denominated
or foreign currency-denominated debt instruments with a maturity of one year or more which are issued overseas by domestic enterprises
and their controlled overseas enterprises or branches and for which the principal and interest are repaid as agreed, including bonds issued
overseas and long- and medium-term international commercial loans, and so forth. In February 2020, the NDRC circulated the Guide to the
Registration of Foreign Debt Issued by Enterprises on its official website, according to which, domestic companies (and their controlled
overseas companies or branches) who borrowed from foreign companies (including overseas shareholders) a loan for more than one year need
to apply to the NDRC. However, the NDRC has not issued any other further explanation for the implementation of the Circular 2044. In the
practice, the NDRC&#8217;s attitude on whether foreign-invested enterprises with foreign loans with a term of more than one year need
to register is still not completely unified, and it is generally determined on a case-by-case basis.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>Insurance and Social Security Matters </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 maintain automobile insurance
policies against loss or damage to our vehicles, drivers and third parties arising in the course of the delivery and policies against
damages and losses of cargo during the provision of trucking services. We currently do not have any business liability or disruption insurance.
We also participate in various government statutory social security plans, including a pension contribution plan, a medical insurance
plan, an unemployment insurance plan, a work-related injury insurance plan, a maternity insurance plan and a housing provident fund.</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 insurance coverage complies
with the requirements of our existing customers. We believe that such coverage is in line with industry norms in the PRC and is adequate
and sufficient for our current 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>4.C. Organizational 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>Our Subsidiaries and VIEs</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 Company was incorporated
on January 2, 2018 as an exempted company structured as a holding company incorporated under the laws of Cayman Islands. Immediately prior
to our initial public offering completed on October 20, 2020, we were owned by three entities and one individual: (i) Alpha Global (BVI)
Limited, a company formed under the laws of the British Virgin Islands and wholly-owned by Jinlong Yang, our Chairman and Chief Executive
Officer; (ii) Excelsior Investment Limited (Hong Kong), a company formed under the laws of Hong Kong and wholly-owned by Gui Ling Guo,
a director and the Vice Chair of the board of directors of MingZhu and (iii) Exquisite Elite Limited (BVI), a company formed under the
laws of the British Virgin Islands, with 86% of its equity interest owned by Zhuo Wang, our director. We began our operations in China
in 2002 and currently conduct our business through our subsidiaries and VIEs.</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 currently have 11 wholly-owned
subsidiaries, including MingZhu BVI, MingZhu HK, a limited liability company formed under the laws of Hong Kong, Cheyi BVI, Yinhua, Cheyi
(Hong Kong) Limited, Yinhua (HK) Limited, and five operating subsidiaries, including MingZhu. Our five operating subsidiaries are companies
formed under the laws of the PRC. Cheyi Network and Zhisheng are VIEs of us in the PRC. In 2002, we formed MingZhu to primarily engage
in the business of transportation services. We also established MingZhu Pengcheng in 2010 under the laws of the PRC to engage in the business
of trucking services. Through MingZhu BVI and MingZhu HK, we own 100% of the equity interest of MingZhu Management, which is engaged in
the business of transportation and supply chain management services.</p><div>

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




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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A reorganization of our legal
structure was completed in April 2018. On April 13, 2018, the former shareholders transferred their 100% ownership interest in MingZhu
to MingZhu HK, which is 100% owned by the Company through MingZhu BVI. In consideration of such transfer, the Company issued 1,000 ordinary
shares to the former shareholders of MingZhu. After the reorganization, the Company owns 100% equity interests of MingZhu BVI, MingZhu
HK and MingZhu. The controlling shareholder of the Company is same as that of MingZhu prior to the reorganization. On December 31, 2021
the Company acquired 100% shares outstanding of Cheyi BVI. On March 18, 2022, the Company acquired 100% shares outstanding of Yinhua.</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 operate our VATs business
mainly through the VIEs in the PRC, based on a series of contractual arrangements (collectively the &#8220;VIE Agreements&#8221;). As
a result of these contractual arrangements, we are considered the primary beneficiary of the VIEs for accounting purposes and consolidate
their operating results in our financial statements under U.S. GAAP. Such a contractual relationship is not identical to owning such entities
directly, and investors will own shares in a holding company with contracts with the VIEs and will not have any equity ownership of the
VIEs themselves. The investors have purchased securities in the Company and the Company&#8217;s operations are conducted by its subsidies
and VIEs. Neither the investors in the holding company nor the holding company itself have an equity ownership in, direct foreign investment
in, or control of, through such ownership or investment, the VIEs.</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">The VIE Agreements may not
be as effective as direct ownership in providing us with control over the VIEs. Direct ownership would allow us, for example, to directly
or indirectly exercise our rights as a shareholder to effect changes in the boards of directors of the VIEs, which, in turn, could affect
changes, subject to any applicable fiduciary obligations at the management level. However, under the VIE Agreements, as a legal matter,
if the VIEs or its shareholders fail to perform their respective obligations under the VIE Agreements, we may have to incur substantial
costs and expend significant resources to enforce those arrangements and resort to litigation or arbitration and rely on legal remedies
under PRC laws. These remedies may include seeking specific performance or injunctive relief and claiming damages, any of which may not
be effective. In the event we are unable to enforce these VIE Agreements or we experience significant delays or other obstacles in the
process of enforcing these VIE Agreements, we may not be able to exert effective control over the VIEs and may lose control over the assets
owned by the VIEs. As a result, we may be unable to consolidate the VIEs in our consolidated financial statements, which could materially
and adversely affect our financial condition and results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; 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">Furthermore, all of these
VIE Agreements are governed by PRC law and provide for the resolution of disputes through arbitration in the PRC, and such VIE Agreements
have not been tested in a court of law. The legal environment in the PRC is not as developed as in some other jurisdictions. As a result,
uncertainties in the PRC legal system could limit our ability to enforce these VIE Agreements. In the event we are unable to enforce these
VIE Agreements, we may not be able to exert effective control over the VIEs and we may be precluded from operating our business, which
would have a material adverse effect on our financial condition and results of operations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; 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 addition, there is uncertainty
as to whether the courts of the Cayman Islands or the PRC would recognize or enforce judgments of U.S. courts against us or such persons
predicated upon the civil liability provisions of the securities laws of the United States or any state. Accordingly, it is uncertain
whether we would be able to enforce the VIE Agreements in a court of law in China, either in in an action directly in China or in seeking
to enforce a foreign judgment in China. The costs of seeking to enforce such VIE Agreements could be substantial, and the outcome of such
litigation might not result in us enforcing such VIE Agreements. If such VIE Agreements were not enforced, investors could see the value
of their shares decrease in value or become worthless. Because we do not directly hold equity interests in the VIEs, we are subject to
risks due to uncertainty of the interpretation and the application of the PRC laws and regulations, including, but not limited to, regulatory
review of overseas listing of PRC companies through a special purpose vehicle, and the validity and enforcement of the VIE Agreements.</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 are also subject to the
risks of uncertainty about any future actions of the PRC government in this regard that could disallow the VIE structure, which would
likely result in a material change in our operations and a complete hindrance of our ability to offer or continue to offer our securities
to investors and the value of our shares may depreciate significantly or become worthless.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Cheyi BVI</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">The Cheyi BVI, which is acquired
by the Company on December 29, 2021, operates business mainly through its variable interest entities (&#8220;VIE&#8221;) in the PRC, based
on a series of contractual arrangements (collectively the &#8220;VIE Agreements&#8221;). As a result of the VIE Agreements that our Ningbo
Cheyi Corporate Information Consulting Co., Ltd. (&#8220;Cheyi WFOE&#8221;) entered with Zhejiang Cheyi Network Technology Co., Ltd. (&#8220;Cheyi
Network&#8221;), and its shareholders, the control and benefits of Cheyi Network were accrued to us subject to the conditions that we
have satisfied for consolidation of Cheyi Network and its subsidiaries under U.S. GAAP. Such conditions include that (i) we control Cheyi
Network through power to govern the activities which most significantly impact Cheyi Network&#8217;s economic performance, (ii) we are
contractually obligated to absorb losses of Cheyi Network that could potentially be significant to Cheyi Network, and (iii) we are entitled
to receive benefits from Cheyi Network that could potentially be significant to Cheyi Network. We are regarded as the primary beneficiary
of Cheyi Network and its subsidiaries, and Cheyi Network and its subsidiaries are treated as our consolidated affiliated entity under
U.S. GAAP. We have consolidated the financial results of Cheyi Network and its subsidiaries in our consolidated financial statements for
accounting purposes in accordance with U.S. GAAP.</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 is a summary
of VIE Agreements by and among Cheyi Network, a subsidiary of Cheyi BVI, Cheyi WFOE and the shareholders of Cheyi BVI. Each of the VIE
Agreements is described in detail below:</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>Master Exclusive Service
Agreement</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the Master Exclusive
Service Agreement dated November 24, 2021, Cheyi WFOE has agreed to provide the following services (among others) to Cheyi Network:</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">information consulting services regarding the business operation of Service Receiving Parties;</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: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">public relation services;</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><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">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">market investigation, research and consulting services;</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: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">Leasing, assignment or disposal of properties;</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: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">recruiting, managing and training of necessary personnel to sustain the business operation;</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: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">marketing channel to cooperate with business-relating third-party platforms;</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: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">customer order management and customer services;</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: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">mid or short-term market development and market planning services;</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: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">human resource management and internal information management;</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%; border-collapse: collapse">
  <tr style="vertical-align: top">
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    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">Design, installation, daily management, maintenance and updating of network system, hardware and database design, and/or other services determined from time to time by Cheyi Network according to the need of business and capacity of the Cheyi WFOE.</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This agreement was effective
from November 24, 2021 and will continue to be effective unless it is terminated by written notice of Cheyi Network.</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>Business Cooperation Agreement</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 the Exclusive Option
Agreement entered into by Cheyi WFOE, Cheyi Network and the shareholders of Cheyi Network, dated November 24, 2021, all parties agreed
that without obtaining Cheyi WFOE &#8217;s prior written consent, Cheyi Network shall not, and each of the Cheyi Network and shareholders
of Cheyi Network shall cause each of Cheyi Network and its subsidiaries not to, engage in any transaction which may materially affect
its asset obligation right or operation. Furthermore, Cheyi Network shall and shareholders of Cheyi Network shall cause Cheyi Network
and its subsidiaries to accept suggestions raised by Cheyi WFOE over the employee engagement and replacement, daily operation, dividend
distribution and financial management systems of Cheyi Network and its subsidiaries and Cheyi Network and its subsidiaries shall strictly
abide by and perform accordingly.</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"><i>Equity Interest Pledge
Agreement</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">The shareholders of Cheyi
Network entered into an Equity Pledge Interest Agreement with Cheyi WFOE, dated November 24, 2021. Under such equity pledge agreement,
each of the shareholders of Cheyi Network pledged its respective equity interest in Cheyi Network to Cheyi WFOE to secure such shareholder&#8217;s
obligations under the Exclusive Option Agreement, Proxy Agreement, Master Exclusive Service Agreement, and Letter of Confirmation and
Undertaking.</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">Each of such shareholders
further agreed not to transfer or pledge his or her respective equity interest in Cheyi Network without the prior written consent of Cheyi
WFOE. The equity pledge agreement will remain effective until the shareholders fulfill their obligations and Cheyi WFOE discharges all
the shareholders&#8217; obligations under these VIE Agreements in writing.</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>Exclusive Option Agreement</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 the Exclusive Option
Agreement entered into by Cheyi WFOE, Cheyi Network and the shareholders of Cheyi Network, dated November 24, 2021, the shareholders of
Cheyi Network granted Cheyi WFOE or its designee an option to purchase all or a portion of their respective equity interest in Cheyi Network
or the RMB 1.</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">Each of shareholders of Cheyi
Network agreed that, as of the effective date of this agreement, but before the transfer of all or part of the Cheyi Network&#8217;s equity
interest to Cheyi WFOE, if the shareholders obtain dividends, bonuses or residual property from Cheyi Network, the shareholders shall
transfer all the income (after tax) to Cheyi WFOE.</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 exclusive option agreement
shall remain in effect until all of the equity interests in or assets of Cheyi Network have been acquired by Cheyi WFOE or its designee,
and upon the condition that Cheyi WFOE and its subsidiaries, branches can engage in the business of Cheyi Network legally.</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">Cheyi WFOE has the right to
unilaterally terminate this agreement immediately by sending written notices to Cheyi Network and the shareholders of Cheyi Network at
any time without liability for the breach. Unless otherwise mandatory by Chinese law, Cheyi Network and its shareholders has no right
to unilaterally terminate this agreement.</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><!-- Field: Page; Sequence: 74; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>Proxy Agreement</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 the Proxy Agreement
among Cheyi WFOE, Cheyi Network and the shareholders of Cheyi Network, dated November 24, 2021, each of the shareholders of Cheyi Network
has agreed to irrevocably entrust Cheyi WFOE or its designee to represent it to exercise all the shareholders&#8217; rights to which it
is entitled as a shareholder of Cheyi Network.</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 Proxy Agreement is irrevocable
and shall remain effective until upon the instruction of Cheyi WFOE.</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>Letter of Confirmation
and Undertaking</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">Each shareholder of Cheyi
Network had signed a Letter of Confirmation and Undertaking. Under the Letter of Confirmation and Undertaking, each shareholder of Cheyi
Network confirmed undertake and warrant that his or her successor, guardian, creditor, spouse or any other person that may be entitled
to assume rights and interests in the equity interest of Cheyi Network held by him or her upon his or her death incapacity, divorce or
any circumstances that may affect his or her ability to exercise rights of shareholder in Cheyi Network will not, in any manner and under
any circumstances, take any action that may affect or hinder the fulfillment of his or her obligations under each of the Master Exclusive
Service Agreement, the Business Cooperation Agreement, the Proxy Agreement, the Exclusive Option Agreement, and the Equity Interest Pledge
Agreement executed by him or her on November 24, 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"><span style="text-decoration:underline">Yinhua</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">The Yinhua, which is acquired
by the Company on March 14, 2022, operates business mainly through its variable interest entities (&#8220;VIE&#8221;) in the PRC, based
on a series of contractual arrangements (collectively the &#8220;VIE Agreements&#8221;). As a result of the VIE Agreements that our Zhejiang
Caiyunlian Technology Co., Ltd. (&#8220;Yinhua WFOE&#8221;) entered with Hainan Zhisheng Car Services Co., Ltd. (&#8220;Zhisheng&#8221;),
and its shareholders, the control and benefits of Zhisheng were accrued to us subject to the conditions that we have satisfied for consolidation
of Zhisheng under U.S. GAAP. Such conditions include that (i) we control Zhisheng through power to govern the activities which most significantly
impact Zhisheng&#8217;s economic performance, (ii) we are contractually obligated to absorb losses of Zhisheng that could potentially
be significant to Zhisheng, and (iii) we are entitled to receive benefits from Cheyi Network that could potentially be significant to
Zhisheng. We are regarded as the primary beneficiary of Zhisheng, and Zhisheng is treated as our consolidated affiliated entity under
U.S. GAAP. We have consolidated the financial results of Zhisheng in our consolidated financial statements for accounting purposes in
accordance with U.S. GAAP.</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 is a summary
of VIE Agreements by and among Zhisheng, a subsidiary of Yinhua, Yinhua WFOE and the shareholders of Yinhua. Each of the VIE Agreements
is described in detail below:</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"><i>Master Exclusive Service
Agreement</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the Master Exclusive
Service Agreement dated January 22, 2022, Yinhua WFOE has agreed to provide the following services (among others) to Zhisheng:</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">information consulting services regarding the business operation of Service Receiving Parties;</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: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">public relation services;</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: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">market investigation, research and consulting services;</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: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">Leasing, assignment or disposal of properties;</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: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">recruiting, managing and training of necessary personnel to sustain the business operation;</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: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">marketing channel to cooperate with business-relating third-party platforms;</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: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">customer order management and customer services;</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: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">mid or short-term market development and market planning services;</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: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">human resource management and internal information management;</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: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">Design, installation, daily management, maintenance and updating of network system, hardware and database design, and/or other services determined from time to time by Zhisheng according to the need of business and capacity of the Yinhua WFOE.</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">This agreement was effective
from January 22, 2022 and will continue to be effective unless it is terminated by written notice of Zhisheng.</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: 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 -->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>
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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"><i>Business Cooperation Agreement</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 the Exclusive Option
Agreement entered into by Yinhua WFOE, Zhisheng and the shareholders of Zhisheng, dated January 22, 2022, all parties agreed that without
obtaining Yinhua WFOE &#8217;s prior written consent, Zhisheng shall not, and each of the Zhisheng and shareholders of Zhisheng shall
cause each of Zhisheng and its subsidiaries not to, engage in any transaction which may materially affect its asset obligation right or
operation. Furthermore, Zhisheng shall and shareholders of Zhisheng shall cause Zhisheng and its subsidiaries to accept suggestions raised
by Yinhua WFOE over the employee engagement and replacement, daily operation, dividend distribution and financial management systems of
Zhisheng and its subsidiaries and Zhisheng and its subsidiaries shall strictly abide by and perform accordingly.</p><div>

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




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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>Equity Interest Pledge
Agreement</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">The shareholders of Zhisheng
entered into an Equity Pledge Interest Agreement with Yinhua WFOE, dated January 22, 2022. Under such equity pledge agreement, each of
the shareholders of Zhisheng pledged its respective equity interest in Zhisheng to Yinhua WFOE to secure such shareholder&#8217;s obligations
under the Exclusive Option Agreement, Proxy Agreement, Master Exclusive Service Agreement, and Letter of Confirmation and Undertaking.</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">Each of such shareholders
further agreed not to transfer or pledge his or her respective equity interest in Zhisheng without the prior written consent of Yinhua
WFOE. The equity pledge agreement will remain effective until the shareholders fulfill their obligations and Yinhua WFOE discharges all
the shareholders&#8217; obligations under these VIE Agreements in writing.</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>Exclusive Option Agreement</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 the Exclusive Option
Agreement entered into by Yinhua WFOE, Zhisheng and the shareholders of Zhisheng, dated January 22, 2022, the shareholders of Zhisheng
granted Yinhua WFOE or its designee an option to purchase all or a portion of their respective equity interest in Zhisheng for the RMB
1.</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">Each of shareholders of Zhisheng
agreed that, as of the effective date of this agreement, but before the transfer of all or part of the Zhisheng&#8217;s equity interest
to Yinhua WFOE, if the shareholders obtain dividends, bonuses or residual property from Zhisheng, the shareholders shall transfer all
the income (after tax) to Yinhua WFOE.</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 exclusive option agreement
shall remain in effect until all of the equity interests in or assets of Zhisheng have been acquired by Yinhua WFOE or its designee, and
upon the condition that Yinhua WFOE and its subsidiaries, branches can engage in the business of Zhisheng legally.</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">Yinhua WFOE has the right
to unilaterally terminate this agreement immediately by sending written notices to Zhisheng and the shareholders of Zhisheng at any time
without liability for the breach. Unless otherwise mandatory by Chinese law, Zhisheng and its shareholders has no right to unilaterally
terminate this agreement.</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>Proxy Agreement</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 the Proxy Agreement
among Yinhua WFOE, Zhisheng and the shareholders of Zhisheng, dated January 22, 2022, each of the shareholders of Zhisheng has agreed
to irrevocably entrust Yinhua WFOE or its designee to represent it to exercise all the shareholders&#8217; rights to which it is entitled
as a shareholder of Zhisheng.</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 Proxy Agreement is irrevocable
and shall remain effective until upon the instruction of Yinhua WFOE.</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>Letter of Confirmation
and Undertaking</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">Each shareholder of Zhisheng
had signed a Letter of Confirmation and Undertaking. Under the Letter of Confirmation and Undertaking, each shareholder of Zhisheng confirmed
undertake and warrant that his or her successor, guardian, creditor, spouse or any other person that may be entitled to assume rights
and interests in the equity interest of Zhisheng held by him or her upon his or her death incapacity, divorce or any circumstances that
may affect his or her ability to exercise rights of shareholder in Zhisheng will not, in any manner and under any circumstances, take
any action that may affect or hinder the fulfillment of his or her obligations under each of the Master Exclusive Service Agreement, the
Business Cooperation Agreement, the Proxy Agreement, the Exclusive Option Agreement, and the Equity Interest Pledge Agreement executed
by him or her on January 22, 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"><i>Consent Letter</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">Each spouse of shareholder
of Zhisheng had signed a Consent letter. Under Consent Letter, each spouse of shareholder of Zhisheng confirm and agree that the equity
interest in the Zhisheng held by each shareholder of Zhisheng is her or his individual property not the joint property, which each shareholder
of Zhisheng is entitled to dispose of on her or his own.</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: 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 -->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"><span style="text-decoration:underline">Feipeng BVI</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">The Feipeng BVI, which is
acquired by the Company on December 21, 2022, operates business mainly through its variable interest entities (&#8220;VIE&#8221;) in the
PRC, based on a series of contractual arrangements (collectively the &#8220;VIE Agreements&#8221;). As a result of the VIE Agreements
that our Shenzhen Feipeng Zongheng Supply Chain Management Co., Ltd. (&#8220;Feipeng WFOE&#8221;) entered with Xinjiang Feipeng Logistics
Co., Ltd. (&#8220;Feipeng&#8221;), and its shareholders, the control and benefits of Feipeng were accrued to us subject to the conditions
that we have satisfied for consolidation of Feipeng under U.S. GAAP. Such conditions include that (i) we control Feipeng through power
to govern the activities which most significantly impact Feipeng&#8217;s economic performance, (ii) we are contractually obligated to
absorb losses of Feipeng that could potentially be significant to Feipeng, and (iii) we are entitled to receive benefits from Feipeng
that could potentially be significant to Feipeng. We are regarded as the primary beneficiary of Feipeng, and Feipeng is treated as our
consolidated affiliated entity under U.S. GAAP. We have consolidated the financial results of Feipeng in our consolidated financial statements
for accounting purposes in accordance with U.S. GAAP.</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 is a summary
of VIE Agreements by and among Feipeng, a subsidiary of Feipeng BVI, Feipeng WFOE and the shareholders of Feipeng BVI. Each of the VIE
Agreements is described in detail below:</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"><i>Master Exclusive Service
Agreement</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the Master Exclusive
Service Agreement dated December 20, 2022, Feipeng WFOE has agreed to provide the following services (among others) to Feipeng:</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">information consulting services regarding the business operation of Service Receiving Parties;</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: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">public relation services;</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: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">market investigation, research and consulting services;</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: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">Leasing, assignment or disposal of properties;</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: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">recruiting, managing and training of necessary personnel to sustain the business operation;</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: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">marketing channel to cooperate with business-relating third-party platforms;</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: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">customer order management and customer services;</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: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">mid or short-term market development and market planning services;</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: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">human resource management and internal information management;</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: 48px">&#160;</td>
    <td style="width: 24px">&#9679;</td>
    <td style="text-align: justify">Design, installation, daily management, maintenance and updating of network system, hardware and database design, and/or other services determined from time to time by Feipeng according to the need of business and capacity of the Feipeng WFOE.</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">This agreement was effective
from December 20, 2022 and will continue to be effective unless it is terminated by written notice of Feipeng.</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>Business Cooperation Agreement</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 the Exclusive Option
Agreement entered into by Feipeng WFOE, Feipeng and the shareholders of Feipeng, dated December 20, 2022, all parties agreed that without
obtaining Feipeng WFOE &#8217;s prior written consent, Feipeng shall not, and each of the Feipeng and shareholders of Feipeng shall cause
each of Feipeng and its subsidiaries not to, engage in any transaction which may materially affect its asset obligation right or operation.
Furthermore, Feipeng shall and shareholders of Feipeng shall cause Feipeng and its subsidiaries to accept suggestions raised by Feipeng
WFOE over the employee engagement and replacement, daily operation, dividend distribution and financial management systems of Feipeng
and its subsidiaries and Feipeng and its subsidiaries shall strictly abide by and perform accordingly.</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><!-- 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 -->74<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>Equity Interest Pledge
Agreement</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">The shareholders of Feipeng
entered into an Equity Pledge Interest Agreement with Feipeng WFOE, dated December 20, 2022. Under such equity pledge agreement, each
of the shareholders of Feipeng pledged its respective equity interest in Feipeng to Feipeng WFOE to secure such shareholder&#8217;s obligations
under the Exclusive Option Agreement, Proxy Agreement, Master Exclusive Service Agreement, and Letter of Confirmation and Undertaking.</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">Each of such shareholders
further agreed not to transfer or pledge his or her respective equity interest in Feipeng without the prior written consent of Feipeng
WFOE. The equity pledge agreement will remain effective until the shareholders fulfill their obligations and Feipeng WFOE discharges all
the shareholders&#8217; obligations under these VIE Agreements in writing.</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>Exclusive Option Agreement</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 the Exclusive Option
Agreement entered into by Feipeng WFOE, Feipeng and the shareholders of Feipeng, dated December 20, 2022, the shareholders of Feipeng
granted Feipeng WFOE or its designee an option to purchase all or a portion of their respective equity interest in Feipeng for the RMB
1.</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">Each of shareholders of Feipeng
agreed that, as of the effective date of this agreement, but before the transfer of all or part of the Feipeng&#8217;s equity interest
to Feipeng WFOE, if the shareholders obtain dividends, bonuses or residual property from Feipeng, the shareholders shall transfer all
the income (after tax) to Feipeng WFOE.</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 exclusive option agreement
shall remain in effect until all of the equity interests in or assets of Feipeng have been acquired by Feipeng WFOE or its designee, and
upon the condition that Feipeng WFOE and its subsidiaries, branches can engage in the business of Feipeng legally.</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">Feipeng WFOE has the right
to unilaterally terminate this agreement immediately by sending written notices to Feipeng and the shareholders of Feipeng at any time
without liability for the breach. Unless otherwise mandatory by Chinese law, Feipeng and its shareholders has no right to unilaterally
terminate this agreement.</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>Proxy Agreement</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 the Proxy Agreement
among Feipeng WFOE, Feipeng and the shareholders of Feipeng, dated December 20, 2022, each of the shareholders of Feipeng has agreed to
irrevocably entrust Feipeng WFOE or its designee to represent it to exercise all the shareholders&#8217; rights to which it is entitled
as a shareholder of Feipeng.</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 Proxy Agreement is irrevocable
and shall remain effective until upon the instruction of Feipeng WFOE.</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>Letter of Confirmation
and Undertaking</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">Each shareholder of Feipeng
had signed a Letter of Confirmation and Undertaking. Under the Letter of Confirmation and Undertaking, each shareholder of Feipeng confirmed
undertake and warrant that his or her successor, guardian, creditor, spouse or any other person that may be entitled to assume rights
and interests in the equity interest of Feipeng held by him or her upon his or her death incapacity, divorce or any circumstances that
may affect his or her ability to exercise rights of shareholder in Feipeng will not, in any manner and under any circumstances, take any
action that may affect or hinder the fulfillment of his or her obligations under each of the Master Exclusive Service Agreement, the Business
Cooperation Agreement, the Proxy Agreement, the Exclusive Option Agreement, and the Equity Interest Pledge Agreement executed by him or
her on December 20, 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"><i>Consent Letter</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">Each spouse of shareholder
of Feipeng had signed a Consent letter. Under Consent Letter, each spouse of shareholder of Feipeng confirm and agree that the equity
interest in the Feipeng held by each shareholder of Feipeng is her or his individual property not the joint property, which each shareholder
of Feipeng is entitled to dispose of on her or his own.</p><div>

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


</div><!-- Field: Page; Sequence: 78; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->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">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Organizational Structure Chart</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 following diagram illustrates
our corporate structure as of the date of this annual report, including our subsidiaries and VIEs.</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"><img alt="" src="image_002.jpg" style="width: 950px; height: 530px"/>&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0in; text-indent: 0.5in; text-align: justify">The investors have purchased securities in the
Company and the Company&#8217;s operations are conducted by its subsidies and VIEs. Cheyi WFOE, Yinhua WFOE and Feipeng WFOE are wholly
foreign-owned entities who receive the economic benefits of the VIEs&#8217; business operation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>4D. Property, Plants and Equipment</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 principal executive office
is located at 27F, Yantian Modern Industry Service Center No. 3018 Shayan Road, Yantian District Shenzhen, Guangdong People&#8217;s Republic
of China, which has approximately 2,000 square meters of office space. We believe that our current offices are suitable and adequate to
operate our business at this time. We do not own any real property.</p><div>

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




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

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

</div><div><a id="a_006"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 4A. UNRESOLVED STAFF COMMENTS</b></p><div>

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

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

</div><div><a id="a_007"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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"><i>The following discussion
and analysis should be read in conjunction with our consolidated financial statements, the notes to those financial statements and other
financial data that appear elsewhere in this annual report. In addition to historical information, the following discussion contains forward-looking
statements based on current expectations that involve risks and uncertainties. Actual results and the timing of certain events may differ
significantly from those projected in such forward-looking statements due to a number of factors, including those set forth in &#8220;Risk
Factors&#8221; and elsewhere in this report. Our consolidated financial statements are prepared in conformity with U.S. generally accepted
accounting principles (&#8220;U.S. GAAP&#8221;).</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>5.A. Operating Results</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>Overview</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"><i>General</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company is not an operating
company a Cayman Islands holding company with its operations conducted through its subsidiaries in the PRC (the &#8220;Subsidiaries&#8221;)
and through contractual arrangements with its variable interest entity (the &#8220;VIEs&#8221;). We engaged in a number of diverse business
activities, including trucking services, car-hailing and driver management services, and car owner services.</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">The following tables present
selected condensed consolidated financial data of the Company and its subsidiaries and VIEs, separately, for the years ended December
31, 2022, 2021 and 2020, and balance sheet data as of December 31, 2022 and 2021, which have been derived from our audited consolidated
financial statements for those periods. MingZhu records its investments in its subsidiaries under the equity method of accounting. Such
investments are presented in the selected condensed consolidated balance sheets of the Company as &#8220;Investment in subsidiaries and
VIEs&#8221; and the profit of the subsidiaries is presented as &#8220;(Loss) Income of Subsidiaries&#8221; in the selected condensed consolidated
statements of income and comprehensive income.</p><div>

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




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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr>
    <td style="border-bottom: black 1.5pt solid; vertical-align: top; width: 28%"><b>Names shown in the following tables</b></td>
    <td style="vertical-align: bottom; width: 1%">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; vertical-align: bottom; width: 45%"><b>Entities</b></td>
    <td style="vertical-align: bottom; width: 1%">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; vertical-align: bottom; width: 25%"><b>Business activities</b></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top">The Company</td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: bottom">Mingzhu Logistics Holdings Limited</td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: top">Investment holdings</td></tr>
  <tr>
    <td style="vertical-align: top">WFOE</td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: bottom">Ningbo Cheyi Corporate Information Consulting Co., Ltd, Zhqiang Caiyunlian Technology Co. Ltd. and Shenzhen Feipeng Zongheng Supply Chain Management Co., Ltd.</td>
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  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top">Directly owned PRC subsidiaries</td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: bottom">Combined and consolidated financial results of Shenzhen Yangang Mingzhu Freight Industry Co., Ltd, its subsidiaries and Shenzhen Yangang Mingzhu Supply Chain Management Co., Ltd.*</td>
    <td style="vertical-align: bottom">&#160;</td>
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  <tr>
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    <td style="vertical-align: bottom">&#160;</td>
    <td style="vertical-align: bottom">Combined and consolidated financial results of MingZhu Investment Limited, YGMZ (Hong Kong) Limited, Cheyi (BVI) Limited, Cheyi (Hong Kong) Limited, Yinhua (BVI), Yinhua (HK) Limited, Feipeng Global Limited and Feipeng (HK) Limited**</td>
    <td style="vertical-align: bottom">&#160;</td>
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  <tr style="background-color: rgb(204,238,255)">
    <td style="vertical-align: top">VIEs</td>
    <td style="vertical-align: bottom">&#160;</td>
    <td style="text-align: left; vertical-align: top">Consolidated financial results of Zhejiang Cheyi Network Technology Co., Ltd and its subsidiaries, Hainan Zhisheng Automobile Services Co., Ltd., and Xinjiang Feipeng Logistics Co., Ltd. </td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0px">&#160;</td>
    <td style="width: 24px">*</td>
    <td style="text-align: justify">We consolidate financial results of the Shenzhen Yangang Mingzhu Freight Industry Co., Ltd and its subsidiaries, and then combine it with financial results of the Shenzhen Yangang Mingzhu Supply Chain Management Co., Ltd..</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: 0px">&#160;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">SELECTED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE
INCOME (LOSS)</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; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#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">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; width: 16%">REVENUES</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">-</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">&#160;&#160;&#160;&#160;&#160;-</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left">NET INCOME</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">(429,246</td><td style="text-align: left">)</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right">2,487,522</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-indent: -0.125in; padding-left: 0.125in; text-align: left">COMPREHENSIVE (LOSS) INCOME</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; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-indent: -0.125in; padding-left: 0.125in">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">$</td><td style="text-align: right">(447,929</td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">$</td><td style="text-align: right">(32,520</td><td style="text-align: left">)</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right">(1,579,387</td><td style="text-align: left">)</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; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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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; ">
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    <td style="text-align: left">$</td><td style="text-align: right">(49,156</td><td style="text-align: left">)</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right">(166,872</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">782,296</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">$</td><td style="text-align: right">1,767,529</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">(64,656</td><td style="text-align: left">)</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right">(166,872</td><td style="text-align: left">)</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; text-indent: 0.5in">&#160;</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 -->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="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">SELECTED CONDENSED CONSOLIDATED BALANCE SHEETS</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">&#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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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    <td>&#160;</td></tr>
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 Company</b></td>
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    <td>&#160;</td>
    <td>&#160;</td>
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    <td>&#160;</td>
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    <td>&#160;</td>
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    <td>&#160;</td>
    <td>&#160;</td>
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    <td>&#160;</td>
    <td>&#160;</td>
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    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="padding-left: 0.125in; text-indent: -0.125in">&#160;</td>
    <td>&#160;</td>
    <td colspan="2">&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td colspan="2">&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td colspan="2">&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td colspan="2">&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td colspan="2">&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
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    <td colspan="2">&#160;</td>
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    <td style="width: 1%">$</td>
    <td style="width: 9%; text-align: right">1,139,015</td>
    <td style="width: 1%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="width: 9%; text-align: right">&#160;&#160;&#160;&#160;&#160;-</td>
    <td style="width: 1%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="width: 1%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="width: 9%; text-align: right">283,606</td>
    <td style="width: 1%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="width: 1%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="width: 9%; text-align: right">328,260</td>
    <td style="width: 1%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="width: 1%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="width: 9%; text-align: right">3,936,430</td>
    <td style="width: 1%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="width: 1%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="width: 9%; text-align: right">&#160;&#160;&#160;&#160;&#160;&#160;-</td>
    <td style="width: 1%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="width: 1%; text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="width: 9%; text-align: right">5,687,311</td>
    <td style="width: 1%">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td>&#160;</td>
    <td>$</td>
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    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="text-align: right">-</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right">$</td>
    <td style="text-align: right">-</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right">$</td>
    <td style="text-align: right">639,321</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right">$</td>
    <td style="text-align: right">-</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right">$</td>
    <td style="text-align: right">(639,321)</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right">$</td>
    <td style="text-align: right">-</td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
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    <td>&#160;</td>
    <td>$</td>
    <td style="text-align: right">15,441,671</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right">$</td>
    <td style="text-align: right">-</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right">$</td>
    <td style="text-align: right">32,283,567</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right">$</td>
    <td style="text-align: right">9,178,325</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right">$</td>
    <td style="text-align: right">32,625,609</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right">$</td>
    <td style="text-align: right">(23,278,787)</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right">$</td>
    <td style="text-align: right">66,250,385</td>
    <td>&#160;</td></tr>
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    <td>&#160;</td>
    <td>$</td>
    <td style="text-align: right">48,087,748</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="text-align: right">&#160;&#160;&#160;&#160;&#160;-</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="text-align: right">&#160;&#160;&#160;&#160;&#160;-</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="text-align: right">&#160;&#160;&#160;&#160;&#160;-</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="text-align: right">(48,087,748)</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td>&#160;</td></tr>
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    <td>&#160;</td>
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    <td style="text-align: right">48,087,748</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="text-align: right">1,336,314</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="text-align: right">5,516,783</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="text-align: right">10,097,644</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right">$</td>
    <td style="text-align: right">(19,832,019)</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="text-align: right">45,206,470</td>
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  <tr style="vertical-align: bottom; ">
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    <td>&#160;</td>
    <td>$</td>
    <td style="text-align: right">63,529,419</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="text-align: right">-</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="text-align: right">34,154,986</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right">$</td>
    <td style="text-align: right">14,695,107</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right">$</td>
    <td style="text-align: right">42,723,253</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right">$</td>
    <td style="text-align: right">(43,645,911)</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="text-align: right">111,456,855</td>
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  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="padding-left: 0.125in; text-indent: -0.125in">Total liabilities</td>
    <td>&#160;</td>
    <td>$</td>
    <td style="text-align: right">21,497,786</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="text-align: right">23,284,935</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="text-align: right">14,688,710</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="text-align: right">26,525,649</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="text-align: right">(22,642,217)</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="text-align: right">63,354,863</td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-indent: -0.125in">Total shareholders&#8217; equity</td>
    <td>&#160;</td>
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    <td style="text-align: right">42,031,633</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="text-align: right">-</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right">$</td>
    <td style="text-align: right">10,870,051</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right">$</td>
    <td style="text-align: right">6,398</td>
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    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right">$</td>
    <td style="text-align: right">16,197,604</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right">$</td>
    <td style="text-align: right">(21,003,694)</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="text-align: right">48,101,992</td>
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  <tr style="vertical-align: bottom; background-color: #CCEEFF">
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    <td>&#160;</td>
    <td>$</td>
    <td style="text-align: right">63,529,419</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="text-align: right">34,154,986</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right">$</td>
    <td style="text-align: right">14,695,107</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right">$</td>
    <td style="text-align: right">42,723,253</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right">$</td>
    <td style="text-align: right">(43,645,911)</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif">&#12288;</span></td>
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    <td style="text-align: right">111,456,855</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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <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">
    <td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <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">$</td><td style="text-align: right">32,970,712</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right">2,511,855</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">5,516,783</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right">31,246,118</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">$</td><td style="text-align: right">34,681,052</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;&#160;</p><div>


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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">SELECTED CONDENSED CONSOLIDATED STATEMENTS OF 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><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="26" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the year ended December 31, 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">The<br/> Company</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">WFOE</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Directly<br/> owned PRC subsidiaries</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Other subsidiaries</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">VIEs</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Eliminations</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Total</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 16%; text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Net cash (used in) provided by operating activities</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">(2,154,421</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">)</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">&#160;&#160;&#160;&#160;&#160;-</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">70,917</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">(435,065</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">)</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">(1,435,387</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">)</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;-</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">(3,953,955</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Net cash used in investing activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</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">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">12,663</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">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(435,065</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">778,705</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">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(917,288</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Cash flows from the Company to the Company&#8217;s subsidiaries</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Cash flows from the Company to VIEs</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Cash flows from the Mingzhu HK to PRC subsidiaries</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Cash flows from the Company&#8217;s subsidiaries to the Company</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Cash flows from VIEs to the Company</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Cash flows from PRC subsidiaries to the Mingzhu HK</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">$</span></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Other net cash provided by (used in) financing activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">214,389</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">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(200,943</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">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">779,811</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">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">2,726,903</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Net cash provided by (used in) financing activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">214,389</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</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">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(200,943</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</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">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">779,811</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</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">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">793,257</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">(29,893</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">(1,809</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">400,692</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">368,989</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Cash and cash equivalents at beginning of the period</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">3,079,046</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">430,878</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">765,128</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">1,477,064</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">5,752,117</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 and cash equivalents at beginning of the period</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">1,139,014</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">283,622</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">328,255</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  </table><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 -->79<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: center">&#160;</td>
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    <td style="text-align: center">&#160;</td>
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 owned PRC subsidiaries</b></span></td>
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    <td style="text-align: center">&#160;</td>
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    <td style="text-align: center">&#160;</td></tr>
  <tr style="vertical-align: bottom">
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    <td>&#160;</td>
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    <td>&#160;</td>
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    <td>&#160;</td>
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    <td style="border-bottom: black 1.5pt solid; width: 9%; text-align: right"><span style="font-size: 10pt">(4,848,590</span></td>
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    <td style="width: 1%">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; width: 1%"><span style="font-size: 10pt">$</span></td>
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    <td style="border-bottom: black 1.5pt solid; width: 9%; text-align: right"><span style="font-size: 10pt">(1,415,069</span></td>
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    <td style="width: 1%">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; width: 1%"><span style="font-size: 10pt">$</span></td>
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    <td style="width: 1%">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; width: 1%"><span style="font-size: 10pt">$</span></td>
    <td style="border-bottom: black 1.5pt solid; width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">4,667,462</span></td>
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    <td style="width: 1%">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; width: 1%"><span style="font-size: 10pt">$</span></td>
    <td style="border-bottom: black 1.5pt solid; width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">(4,667,462</span></td>
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    <td style="width: 1%">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; width: 1%"><span style="font-size: 10pt">$</span></td>
    <td style="border-bottom: black 1.5pt solid; width: 9%; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">(23,784,162</span></td>
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    <td>&#160;</td>
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    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="border-bottom: black 1.5pt solid"><span style="font-size: 10pt">$</span></td>
    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="border-bottom: black 1.5pt solid"><span style="font-size: 10pt">$</span></td>
    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="font-size: 10pt">(199,481</span></td>
    <td><span style="font-size: 10pt">)</span></td>
    <td>&#160;</td>
    <td style="border-bottom: black 1.5pt solid"><span style="font-size: 10pt">$</span></td>
    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="border-bottom: black 1.5pt solid"><span style="font-size: 10pt">$</span></td>
    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="border-bottom: black 1.5pt solid"><span style="font-size: 10pt">$</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">&#12288;</span><span style="font-size: 10pt">1,477,065</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="border-bottom: black 1.5pt solid"><span style="font-size: 10pt">$</span></td>
    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">1,277,584</span></td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
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    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-size: 10pt">(9,500,000</span></td>
    <td><span style="font-size: 10pt">)</span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">9,500,000</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right">&#160;&#160;&#160;&#160;&#160;&#160;<span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right">&#160;&#160;&#160;&#160;<span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right">&#160;&#160;&#160;&#160;&#160;&#160;<span style="font-size: 10pt">-</span></td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="text-indent: -0.125in; padding-left: 0.125in"><span style="font-size: 10pt">Cash flows from the Mingzhu HK to PRC subsidiaries <span style="font-family: Times New Roman, Times, Serif">&#12288;</span></span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-size: 10pt">8,224,143</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">(8,224,143</span></td>
    <td><span style="font-size: 10pt">)</span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -0.125in; padding-left: 0.125in"><span style="font-size: 10pt">Cash flows from the Company&#8217;s subsidiaries to the Company <span style="font-family: Times New Roman, Times, Serif">&#12288;</span></span></td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-size: 10pt">2,000</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
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    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
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    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td></tr>
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    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">-</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
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    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="font-size: 10pt">(8,440,765</span></td>
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    <td style="border-bottom: black 1.5pt solid"><span style="font-size: 10pt">$</span></td>
    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">3,588,863</span></td>
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    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">16,664,547</span></td>
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    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="font-size: 10pt">7,908,316</span></td>
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    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="font-size: 10pt">(216,622</span></td>
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    <td>&#160;</td>
    <td style="border-bottom: black 1.5pt solid"><span style="font-size: 10pt">$</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">&#12288;</span><span style="font-size: 10pt">8,972,853</span></td>
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    <td style="border-bottom: black 1.5pt solid"><span style="font-size: 10pt">$</span></td>
    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">(3,588,863</span></td>
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    <td>&#160;</td>
    <td style="border-bottom: black 1.5pt solid"><span style="font-size: 10pt">$</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">&#12288;</span><span style="font-size: 10pt">3,588,863</span></td>
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    <td style="border-bottom: black 1.5pt solid; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">16,664,547</span></td>
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  <tr style="vertical-align: bottom; background-color: #CCEEFF">
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    <td>&#160;</td>
    <td><span style="font-size: 10pt">$</span></td>
    <td style="text-align: right"><span style="font-size: 10pt">2,444</span></td>
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    <td style="text-align: right"><span style="font-size: 10pt">228,099</span></td>
    <td>&#160;</td>
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    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">67,423</span></td>
    <td>&#160;</td>
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    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">(67,423</span></td>
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    <td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td>&#160;</td>
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    <td style="text-align: right"><span style="font-size: 10pt">16,876</span></td>
    <td>&#160;</td>
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    <td style="text-align: right"><span style="font-size: 10pt">2,033,951</span></td>
    <td>&#160;</td>
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    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">9,554,798</span></td>
    <td>&#160;</td>
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    <td>&#160;</td>
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    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">(331,043</span></td>
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    <td>&#160;</td>
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    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">11,605,625</span></td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
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    <td style="text-align: right"><span style="font-size: 10pt">3,079,046</span></td>
    <td>&#160;</td>
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    <td style="text-align: right"><span style="font-size: 10pt">430,878</span></td>
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    <td style="text-align: right"><span style="font-size: 10pt">765,128</span></td>
    <td>&#160;</td>
    <td>&#160;</td>
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    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</span><span style="font-size: 10pt">1,477,065</span></td>
    <td>&#160;</td>
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    <td>&#160;</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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

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    </div><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 -->80<!-- 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"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
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    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">The<br/>
 Company</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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 owned PRC subsidiaries</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
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    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Cash flows from the Company to the Company&#8217;s subsidiaries</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><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">&#160;</p><div>


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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On October 21, 2020, we completed
our firm commitment initial public offering of 3,000,000 ordinary shares at a public offering price of US$4.00 per share, for total gross
proceeds of US$12 million, before deducting underwriting discounts, commissions and other related expenses. Our ordinary shares began
trading on The Nasdaq Capital Market on October 21, 2020 under the symbol &#8220;YGMZ&#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">On October 30, 2020, the underwriter
and sole book-runner of our underwritten initial public offering, exercised the partial over-allotment option and purchased an additional
350,000 ordinary shares of the Company at the initial public offering price of US$4.00 per share.</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 December 4, 2020, the underwriter
and sole book-runner of our underwritten initial public offering, further exercised the partial over-allotment option and purchased an
additional 4,040 ordinary shares of the Company at the initial public offering price of US$4.00 per share.</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 March 12, 2021, the Company
closed a registered direct public offering of 3,333,335 Units, with each Unit consisting of (i) one ordinary share of the Company, par
value $0.001 per share, and (ii) one warrant to purchase 0.75 ordinary share. The Company sold the Units at a price of $6.00 per Unit.
The Company received gross proceeds from the Offering, before deducting estimated offering expenses payable by the Company, of approximately
$18,000,000.</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">On April 21, 2021, the underwriter
and sole book-runner of our underwritten IPO, exercised its partial warrant and purchased a total of 214,286 ordinary shares of the Company
with no cash in consideration.</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 June 14, 2021, the underwriter
and sole book-runner of our underwritten IPO, exercised its partial warrant and purchased a total of 43,616 ordinary shares of the Company
with no cash in consideration.</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 December 29, 2021, we entered
into a Share Purchase Agreement with Cheyi BVI which operates its business through Cheyi Network, an integrated online car-hailing and
driver management services company, and each of shareholders of Cheyi 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">Pursuant to the agreement,
the total consideration for the acquisition of 100% equity ownership of Cheyi BVI is an aggregate of $23,470,712, consisting of the issuance
by the Company to the shareholders of Cheyi BVI an aggregate of 3,189,000 Company&#8217;s ordinary shares (representing $6,760,680 with
$2.12 per ordinary share) and payment of $2,000,000 at closing, and Year-2021 earnout payment of $8,826,019 and Year-2022 earnout payment
of $5,884,013 if Cheyi BVI&#8217;s audited net income for its fiscal year 2021 and 2022 is no less than U.S. $3,000,000 respectively.
The two earnout payments are due 13 months upon the delivery of Cheyi BVI&#8217;s audited financial statements.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Cheyi Network was established
in December 2015 as a comprehensive automobile service platform, providing a full range of services to the automotive industry. Cheyi
Network has built an integrated business platform with more than 6,000 vehicles and drivers for ride hailing services under management.
Its vehicles and drivers provide services to major mobility technology platforms, such as SAIC Mobility and T3 Mobility.&#160;The acquisition
is expected to offer our customers additional platform enhancements, and directly fits with our acquisition strategy, which includes adding
financially accretive, best-of-breed companies and products.</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 December 31, 2021, the
parties completed the transaction. Upon the closing of the transaction, we acquired 100% shares outstanding of the Cheyi BVI, and we issued
3,189,000 ordinary shares and paid $2,000,000 to the sellers.</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 March 14, 2022, we entered
into a Share Purchase Agreement with Yinhua which develops and operates a comprehensive auto related service platform to serve auto insurance
companies, and each of the shareholders of the Yinhua.</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">Under terms of the share purchase
agreement, we agreed to pay $10,076,600 in exchange for 100% of the equity of Yinhua. Of the total consideration to be paid, $7,078,100
was paid in the form of 3,826,000 newly issued ordinary shares of the Company, representing $1.85 per ordinary share, and $1,000,000 in
cash upon closing. In addition, a cash earnout of $1,998,500 shall be paid if Yinhua achieves a net income target threshold of $1.3 million
during the calendar year of 2022.</p><div>

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

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

</div><!-- Field: Page; Sequence: 85; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->82<!-- Field: /Sequence --></p></div><div>
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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">Founded in 2018, Yinhua provides
diversified, differentiated and customized value-added auto related services to auto insurance companies, where the services include road
security services, car maintenance services, car inspection services and other services. Yinhua develops and operates a comprehensive
auto related service platform for auto insurance companies combining intelligent human-vehicle interaction functions with car owner programs.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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 March 18, 2022, the parties
completed the transaction. Upon the closing of the transaction, we acquired 100% of the outstanding shares outstanding of the Yinhua,
and we issued 3,826,000 ordinary shares and paid $1,000,000 to the sellers.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Recent Developments </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">On December 21, 2022, we entered
into a Share Purchase Agreement with Feipeng BVI which provides regional trucking services, and each of the shareholders of the Feipeng
BVI, pursuant to which, among other things and subject to the terms and conditions contained therein, we acquired 100% of Feipeng BVI
for approximately $14,540,436, of which US $9,550,000 will be paid in cash upon closing in form of cash. Feipeng BVI shall receive a certain
number of shares valued at $4,990,436 if it achieves a targeted net income of US$2.4 million during the calendar year 2023.</p><div>

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




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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company has 22,960,277
ordinary shares outstanding as of the date 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: justify"><b><i>Important Factors Affecting our Results
of Operations and Existing Trends </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 performance of operations
and financial conditions have been, and are expected to continue to be, affected by a number of factors, including macroeconomic conditions,
major customers demand, collectability of accounts receivable and timing of collection, regulations and seasonality, many of which may
be beyond our control.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the years ended December
31, 2022, 2021 and 2020, sales to our top five customers accounted for approximately 31.4%, 49.4% and 78.2%, respectively. Our service
agreements with our customers have an expected length of one year or less. While certain service agreements contain options of renewal,
there is no assurance that our major customers will continue their business relationship with us, or the revenue generated from dealings
with them will be maintained or increased in the future. If we are unable to renew the service agreements with our existing customers,
or there is a reduction or cessation of demands from these customers for whatever reasons and we are unable to enter into new service
agreements of comparable size or on similar terms in substitution, our business, financial conditions and results of operation 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;&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Collectability and Timing of Collection of
Accounts Receivable</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Our cash flows depend on the
timely receipt of payments from our customers. There is no assurance that our customers will pay us on time and in full. Should we experience
any unexpected delay or difficulty in collecting accounts receivable from our customers, our operating results and financial condition
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>


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

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In recent years, the government
has issued many supportive policies to encourage the development of the transportation industry in Guangdong and Xinjiang which are our
two main markets. Encouraged by those policies, the transportation industry is expected to become more standardized and modernized. The
trucking service market which is a subset of the transportation industry is likely to evolve along with the development of transportation
industry.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For our customers that are
logistic companies, the routes and schedules that have been contracted with us are generally scheduled and regular and remain unchanged
throughout the contract period. If our customers experience sudden spikes in demand for trucking services, they may seek other service
providers instead of changing the terms of our trucking services.</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 general, demand for our
trucking services has been observed to be higher in June, November and December each year due to the sales campaigns organized by various
online shopping platforms. To meet the demand in peak seasons, we extend our hours of operation each day during these months. Despite
peak demand seasons being observed in the consumer goods industry, the business&#8217;s dedicated trucking services ensure a level of
stability in our operations and therefore our directors feel that seasonality do not have major impact to the business&#8217; overall
revenue and business 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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For car-hailing and driver
management services and car-owner services, there is no significant impact found as due to seasonality.</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"><i>COVID-19 Pandemic</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The outbreak of COVID-19 since
the beginning of 2020 has adversely impacted the global economy. With daily life in China gradually returning to normal since April, our
business related to logistics industry has gone back to normal as well. However some new cases found in Xinjiang region caused heavy lockdown
starting from June. Our revenue generated from Xinjiang was substantially reduced during June. To the date of this filing, our revenue
is still negatively affected by temporarily regional lockdown across the nation.</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">&#9679;</td>
    <td style="text-align: justify">The impacts of COVID-19 on our business, financial condition, and results of operations include, but are not limited to, the following:</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
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    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">Extended Collection Time and Increase in Bad Debt. Our customers may require additional time to pay us which may require us to record additional bad debt. A total of $945,761 of provision for doubtful accounts had been recorded during the year 2022. We are currently working with our customers for payments and will monitor our collection closely.</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
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    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">Shortage of Drivers. Due to the travel restrictions imposed by the local governments, some of our drivers in Xinjiang region have not been able to get back on road for work. However, such shortage of drivers did not have significant impact on our services, because our subcontractors were more than capable to provide services to our customers.</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">Impacts to our results of
operations depend on future developments and new information that may emerge regarding the duration and severity of the COVID-19 pandemic
and the actions taken by government authorities and other entities to contain COVID-19 and mitigate its impact, almost all of which are
beyond our control. Nonetheless, we are closely monitoring the development of the COVID-19 pandemic and will continually assess its potential
impact to our business. Because of the uncertainty surrounding the COVID-19 pandemic, the further business disruption, especially in Xinjiang
and the related financial impact related to the outbreak of and response to COVID-19 cannot be reasonably estimated at this time.</p><div>

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


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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Level of Income Tax and Preferential Tax
Treatment</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"><i>Cayman Islands</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company was incorporated
in the Cayman Islands and is not subject to tax on income or capital gains under the laws of Cayman Islands. Additionally, the Cayman
Islands does not impose a withholding tax on payments of dividends to shareholders.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>British Virgin Islands</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">MingZhu BVI, Cheyi BVI, Yinhua
and Feipeng BVI are incorporated in the British Virgin Islands and are not subject to tax on income or capital gains under current British
Virgin Islands law. In addition, upon payments of dividends by these entities to their shareholders, no British Virgin Islands withholding
tax will be imposed.&#160;</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">MingZhu HK, Cheyi (Hong Kong)
Limited, Yinhua (HK) Limited and Feipeng Enterprises (HK) Limited are incorporated in Hong Kong and are subject to Hong Kong Profits Tax
on the taxable income as reported in their statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The
applicable tax rate is 16.5% in Hong Kong. The Company did not make any provisions for Hong Kong profit tax as there were no assessable
profits derived from or earned in Hong Kong since inception. Under Hong Kong tax law, MingZhu HK, Cheyi (Hong Kong) Limited, Yinhua (HK)
Limited and Feipeng Enterprises (HK) Limited are exempted from income tax on its foreign-derived income and there are no withholding taxes
in Hong Kong on remittance of dividends.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company PRC subsidiaries
are governed by the income tax laws of the PRC and the income tax provision in respect to operations in the PRC is calculated at the applicable
tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under
the Enterprise Income Tax Laws of the PRC (the &#8220;EIT Laws&#8221;), Chinese enterprises are subject to income tax at a rate of 25%
after appropriate tax adjustments.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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 Ministry of Finance (&#8220;MOF&#8221;) and State Administration
of Taxation (&#8220;SAT&#8221;) on March 14, 2022 jointly issued Cai Shui 2022 No. 13. This clarified that from January 1, 2022 to December
31, 2024, eligible small enterprises whose first RMB 1,000,000 of annual taxable income is eligible for 75% reduction on a rate of 20%
(i.e., effective rate is 5%) and the income between RMB 1,000,000 and RMB 3,000,000 is eligible for 50% reduction on a rate of 20% (i.e.
effective rate is 10%). For the year ended December 31, 2020, MingZhu Pengcheng was eligible to employ this policy.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>Foreign Currency Translation</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 financial statements are
expressed in U.S. dollars but the functional currency of our operating subsidiaries is RMB. Our results of operations are translated at
average exchange rates during the relevant financial reporting periods, assets and liabilities are translated at the unified exchange
rate at the end of these periods and equity is translated at historical exchange rates. Adjustments resulting from the process of translating
the local currency financial statements into U.S. dollars are included in determining comprehensive 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"><b><i>Description of Selected Income Statement
Items</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"><i>Revenues</i>. We generate
revenue from our trucking service business, car-hailing and driver management services and car owner services.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>Cost and expenses</i>.
Cost and expenses includes all operational costs and expenses.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>Other (Expenses) Income</i>.
Our other income and expenses primarily consisted of net rental income from renting out spare office space and property, interest expenses
and others.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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"><i>Provision for income tax</i>.
Tax at a rate of 25% after appropriate tax adjustments.</p><div>

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


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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;<i>For the Years Ended December 31, 2022 and 2021</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"><b>Results of Operations</b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table summarizes
the results of our operations for the year ended December 31, 2022 and 2021, respectively, and provides information regarding the dollar
and percentage increase or (decrease) during such periods.</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 52%; font-weight: bold">REVENUES</td><td style="width: 1%">&#160;</td>
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    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">96,714,889</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">557.1</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#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">&#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; ">
    <td style="padding-left: 0.125in; text-align: left">Costs of trucking services</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">15,428,131</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">19,361,858</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="padding-left: 0.125in; text-align: left">Costs of rental services</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">43,966,881</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">N/A</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: left">Costs of car owner services</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">26,009,485</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">26,009,485</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(567,536</td><td style="text-align: left">)</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#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; ">
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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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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>Revenues </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; text-indent: 0.5in">Our operations are primarily
based in the PRC, where we derive all of revenues. We engaged in a number of diverse business activities, including trucking services,
car-hailing and driver management services, and car owner services. Total revenues increased by $96,714,889, or 557.1%, to $114,073,803
for the year ended December 31, 2022 as compared to $17,358,914 for the year ended December 31, 2021. This increase was attributable to
the acquisition of certain subsidiaries and VIEs in 2022. Revenues generated from our trucking services are increased by 110% as we introduced
more customers during 2022.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Disaggregated information
of revenues by types of services provided are as follows:</p><div>

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

</div><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)">
    <td style="width: 76%; text-align: left">Trucking services</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">36,461,921</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">17,358,914</td><td style="width: 1%; 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; padding-bottom: 1.5pt">Car owner services</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">27,053,149</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 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">114,073,803</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">17,358,914</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Cost and Expenses </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">Total costs and expenses increased
by $93,350,733, or 523.1%, to $111,197,451 for the year ended December 31, 2022 as compared to $17,382,139 for the year ended December
31, 2021. This increase was attributable to the acquisition of certain subsidiaries and VIEs in 2022.</p><div>

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


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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Gross Profit and Gross Margin</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: 36pt">Our gross profit is equal to
the difference between our revenues and our costs of different services provided. Our gross profit decreased 382.1% to $9,307,448 during
the year ended December 31, 2022, from $1,930,783 for the same period in 2021. For the years ended December 31, 2022 and 2021, our gross
margin was 11.1% and 8.2%, respectively. The decrease of gross margin was primarily due to the acquisition of VIEs which has relatively
lower gross margin.</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>Net Income (Loss)</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 result of the foregoing,
our net income totaled approximately $1,896,188 for the year ended December 31, 2022, as compared to a net loss of approximately $938,413
for the year ended December 31, 2021, representing a increase of $2,834,601.&#160;</p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>For the Years Ended December 31, 2021 and 2020</i></p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">The following table summarizes
the results of our operations for the year ended December 31, 2021 and 2020, respectively, and provides information regarding the dollar
and percentage increase or (decrease) during such periods.</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(374,048</td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#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">366,442</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>
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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">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Revenues </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; text-indent: 36pt">Our revenues are primarily
derived from transportation services. Total revenues decreased by $1,435,037, or 7.6%, to $17,358,914 for the year ended December 31,
2021 as compared to $18,793,951 for the year ended December 31, 2020. The decrease was mainly attributable to the diminished customer
demands in Xinjiang province during Covid-19 pandemic. With daily life in China gradually returning to normal since April 2020, our business
related to logistics industry has gone back to normal as well. However, new cases found in Xinjiang province has caused the implementation
of heavy lockdowns from time to time. Consequently, the management relocated trucks and trailers to other regions. The management will
follow the development of the pandemic in Xinjiang province. We have planned to return Xinjiang province in second quarter of year 2022.</p><div>

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

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

</div><!-- Field: Page; Sequence: 90; 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 -->87<!-- 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: 36pt">Our operations are primarily
based in the PRC, where we derive all of revenues. Management also reviews consolidated financial results by business locations. Disaggregated
information of revenues by geographic locations are as follows:</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
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    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">13,522,929</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">17,358,914</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">$</td><td style="border-bottom: Black 4pt double; text-align: right">18,793,951</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(1,435,037</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">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Our revenue was primarily generated
from Guangdong province and Xinjiang province in the PRC, which accounted for approximately 84.5% and 15.5% of our total revenue for the
year ended December 31, 2021, respectively, and approximately 72.0% and 28.0% of our total revenue for the year ended December 31, 2020,
respectively. Through reasonable and effective allocation of our resources, we expect that our revenue will grow in both Guangdong and
Xinjiang provinces.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>Revenue from Guangdong Province</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Revenue from Guangdong province
is primarily generated from highway transportation services and subcontracting business of air freight services. Services are mostly starting
from Guangdong province to other provinces in the PRC except Xinjiang province. Revenue is recognized over the requisite transit period
as the customer&#8217;s goods move from origin to destination which would take one to three days.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">The revenue generated from
Guangdong province increased by 8.4% or $1,139,100 to $14,662,029 for the year ended December 31, 2021 compared with the revenue of $13,522,929
generated from Guangdong province for the year ended December 31, 2020.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Revenue from Xinjiang province
is primarily comprised of transportation services within the Xinjiang province. Services are mostly completed within approximately 24
hours. Revenue is recognized over the requisite transit period as the customer&#8217;s goods move from origin to destination, and the
delivery note is signed by both parties.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">The revenue generated from
Xinjiang province decreased by 48.8% or $2,574,137 to $2,696,885 for the year ended December 31, 2021 compared with the revenue of $5,271,022
generated from Xinjiang province for the year ended December 31, 2020. The decrease was mainly due to the relocation of our fleet, we
assigned some of our vehicles out of Xinjiang and served our customers in other regions.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>Cost and Expenses </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: 36pt">The costs and expenses of our
transportation services consist of transportation costs, general and administrative expenses, provision for doubtful accounts and sales
and marketing expenses.</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; text-indent: 36pt">Total costs and expenses increased
by $464,579, or 2.7%, to $17,846,718 for the year ended December 31, 2021 as compared to $17,382,139 for the year ended December 31, 2020.
This increase was primarily due to an increase of sales and marketing expenses as we intend to improve our public image and gain more
public exposures and the professional fees in relation with the private placement and acquisitions of Cheyi BVI and Yinhua.</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>Gross Profit and Gross Margin</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: 36pt">Our gross profit is equal to
the difference between our revenues and our transportation costs. Our gross profit decreased 30.6% to $1,930,783 during the year ended
December 31, 2021, from $2,783,307 for the same period in 2020. For the years ended December 31, 2021 and 2020, our gross margin was 11.1%
and 14.8%, respectively. The decrease of gross margin was primarily due to the increase of highway and bridge expenses when we relocated
our fleet to regions other than Xinjiang. The increased price of fuel is another key factor that decreased our gross profit.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>Net (Loss) Income</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: 36pt">As a result of the foregoing,
our net loss totaled approximately $938,413 for the year ended December 31, 2021, as compared to a net income of approximately $782,296
for the year ended December 31, 2020, representing a decrease of 220.0%.&#160;</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></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>Critical Accounting Policies and Estimates</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: 36pt">The preparation of financial
statements in conformity with the United States generally accepted accounting principles requires our management to make assumptions,
estimates, and judgments that affect the amounts reported in the financial statements, including the notes to that, and related disclosures
of commitments contingencies, if any.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">We consider our critical accounting
policies to require the more significant judgments and estimates in preparing financial statements, including those outlined in Note 2
to the financial statements included herein.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">The Company has evaluated the
timing and the impact of the guidance above on the financial statements.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">As of December 31, 2022, there
were no other recently issued accounting standards not yet adopted that would or could have a material effect on the Company&#8217;s consolidated
financial statements.</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>5.B. Liquidity and Capital Resources</b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Our business requires substantial
amounts of cash to cover operating expenses as well as to fund capital expenditures, working capital changes, principal and interest payments
on our obligations, lease payments, to support tax payments when we generate taxable income. Recently, we have financed our capital requirements
with borrowings under our existing term loan facility, borrowings under our existing revolving credit facility, cash flows from operating
activities, direct equipment financing, operating leases and proceeds from equipment sales.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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: 36pt">For the year ended December
31, 2022, we had a cash flow used in operating activities of $2,618,812 as compared to a cash used in operating activities of $23,784,162
for the year ended December 31, 2021. As of December 31, 2021, and 2020, we had cash of $5,687,311 and $5,752,117, respectively, and our
working capital was $4,307,516 and $5,308,150, respectively. The decrease of $1,000,634 in working capital was mainly due to the acquisition
completed and the business cooperation during year 2022.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">The following summarizes the
amounts of cash disaggregated by currency denomination as of December 31, 2022 and 2021, separately in each jurisdiction in which our
affiliated entities are domiciled.</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="14" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Cash held as of December 31, 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">USD</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">HKD</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">RMB</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: 52%">Cayman</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,123,511</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">15,504</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">-</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,139,015</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td>BVI</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">9,846</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">284</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">10,130</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">Hong Kong</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">262,959</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">3,958</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">51,212</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">318,129</td><td style="text-align: left">&#160;</td></tr>
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    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">283,606</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">283,606</td><td style="text-align: left">&#160;</td></tr>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,396,316</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
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    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">4,271,249</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">5,687,311</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">$</td><td style="text-align: right">1,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">10,149</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">11,149</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">$</td><td style="text-align: right">24,407</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">430,878</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">430,878</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">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</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">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,477,065</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">3,788,934</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">$</td><td style="border-bottom: Black 4pt double; text-align: right">30,833</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,932,350</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">5,752,117</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">We believe the Company&#8217;s
revenues and operations will continue to grow and the current working capital is sufficient to support its operations and debt obligations
as they mostly become due one year from the date of this annual report. However, we may need additional cash resources in the future if
we experience changed business conditions or other developments and may also need additional cash resources in the future if we wish to
pursue opportunities for investment, acquisition, strategic cooperation or other similar actions. If it is determined that the cash requirements
exceed our amounts of cash on hand, we may seek to issue debt or equity securities or obtain a credit facility.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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: 92; 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 -->89<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Cash Flows </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"><b><i>For the Year ended December 31, 2022 and
2021</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: 36pt">The following summarizes the
key components of our cash flows for the year ended December 31, 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><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: center">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(3,953,955</td><td style="width: 1%; text-align: left">)</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">(23,784,162</td><td style="width: 1%; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify">Net cash provided by investing activities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2,726,903</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1,277,584</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">Net cash provided by financing activities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">793,257</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">16,664,547</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(11,477</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Net (decrease) increase in cash</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(64,806</td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(5,853,508</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify; padding-bottom: 1.5pt">Cash and cash equivalents at beginning of the period</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">11,605,625</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; padding-bottom: 4pt">Cash and cash equivalents at end of the period</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">5,752,117</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: justify">Net cash used in operating activities was $3,953,955 for the year ended
December 31, 2022 and was primarily attributable to (i) net income of $1,896,188, (ii) various non-cash item of $7,245,753 including gain
on disposal of vehicles, provision for doubtful accounts, amortization of deferred financing fees, depreciation for plant and equipment
and deferred tax benefit, (iii) a $ 4,678,337 decrease in prepayments, (iv) a 4,207,620 increase in accounts payable, (v) a $7,531,718
decrease in other receivables and (vi) a $1,342,620 increase in tax payables. This net cash inflow is partially offset by (i) a $3,257,814
increase of accounts receivable, (ii) a $1,313,871 increase of deposits, (iii) a $16,621,319 increase in loans receivable and a $7,766,999
decrease of others payables and accrued liabilities.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; 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">For the year ended December
31, 2022, we had a cash flow used in operating activities of $3,953,955 as compared to a cash provided by operating activities of $23,784,162
for the year ended December 31, 2021. The change was mainly contributable to the acquisition of VIEs in 2022.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Net cash provided by investing
activities was $2,726,903 for the year ended December 31, 2022 and was mainly attributable to the acquisition of ownership of subsidiaries.
As compared to the cash used in investing of $1,277,584 for the year ended December 31, 2021, the increase was largely due to the transfer
of ownership of a subsidiary in December 2021.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: justify">Net cash provided by financing activities was $793,257 for year ended
December 31, 2022 and was primarily attributable to (i) repayments of short-term bank borrowings of $18,631,203, (ii) repayments of long-term
bank borrowings of $92,594, (iii) repayments of loans from other financial institutions of $136,492, (iv) repayments of obligations under
capital leases of $597,533, and (v) repayments to related parties of $2,663,598. This cash outflow was offset by (i) the proceeds from
short-term bank borrowings of $21,212,202, (ii) the proceeds from long-term borrowings of $444,345, (iii) the amounts advanced from related
parties of $1,258,130.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in; margin: 0pt 0; text-align: justify">In comparison with the cash provided by financing activities of $793,257
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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>For the Year ended December 31, 2021 and
2020</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: 36pt">The following summarizes the
key components of our cash flows for the year ended December 31, 2021 and 2020:</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: justify">&#160;</td>
    <td>&#160;</td>
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December 31,</b></td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td>
    <td>&#160;</td>
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    <td>&#160;</td>
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    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td>
    <td>&#160;</td>
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    <td>&#160;</td>
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    <td>&#160;</td></tr>
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    <td style="width: 1%">&#160;</td>
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    <td style="text-align: justify">Net cash provided by (used in) investing activities</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right">1,277,584</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right">(156,029</td>
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  <tr style="vertical-align: bottom; background-color: #CCEEFF">
    <td style="text-align: justify">Net cash provided by financing activities</td>
    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right">16,664,547</td>
    <td>&#160;</td>
    <td>&#160;</td>
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    <td style="text-align: right">12,313,376</td>
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    <td style="text-align: justify">Effect of exchange rate change on cash</td>
    <td>&#160;</td>
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    <td style="border-bottom: black 1.5pt solid; text-align: right">(11,477</td>
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    <td>&#160;</td>
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    <td style="border-bottom: black 1.5pt solid; text-align: right">114,980</td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
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    <td>&#160;</td>
    <td>&#160;</td>
    <td style="text-align: right">(5,853,508</td>
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    <td>&#160;</td>
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    <td style="text-align: justify">Cash, cash equivalents and restricted cash at beginning of the period</td>
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    <td style="border-bottom: black 1.5pt solid">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; text-align: right">11,605,625</td>
    <td>&#160;</td>
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    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: #CCEEFF">
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    <td>&#160;</td>
    <td style="border-bottom: black 4.5pt double">$</td>
    <td style="border-bottom: black 4.5pt double; text-align: right">5,752,117</td>
    <td>&#160;</td>
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    <td style="border-bottom: black 4.5pt double">$</td>
    <td style="border-bottom: black 4.5pt double; text-align: right">11,605,625</td>
    <td>&#160;</td></tr>
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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><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">Comparative amounts of $11,416,940 is reclassified from other
receivables to loans receivables for consistency. Since the amounts are reclassification within the operating activities, thus the reclassification
did not have any effect on the net cash used in operating activities.</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"></p><div>

</div><!-- Field: Page; Sequence: 93; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->90<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Net cash used in operating
activities was $23,784,162 for the year ended December 31, 2021 and was primarily attributable to (i) net loss of $938,413, (ii) various
non-cash item of $1,742,854 including gain on disposal of vehicles, provision for doubtful accounts, amortization of deferred financing
fees, depreciation for plant and equipment and deferred tax benefit, (iii) a $1,633,476 decrease in accounts receivable, (iv) a $3,444,875
decrease in other receivables,. This net cash inflow is partially offset by (i) a $3,838,690 increase of prepayment, (ii) a $11,070,827
increase in loans receivable, (iii) a $29,269 increase in deposits, (iv) a $874,843 decrease of Accounts and notes payable, (v) a $2,989,501
decrease of others payable and accrued liabilities and (vi) a $1,422,362 decrease in tax payables.</p><div>

</div><p style="font: 10pt Times New Roman, Times, 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; text-align: justify">For the year ended December 31, 2021, we had a cash flow used in operating
activities of $23,784,162 as compared to a cash provided by operating activities of $890,209 for the year ended December 31, 2020. The
change was mainly contributable to the increase of deposits and the decrease of others payable and accrued liabilities.</p><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Net cash used in investing
activities was $1,277,584 for the year ended December 31, 2021 and was mainly attributable to the purchase of equipment and the transfer
of ownership of a subsidiary. As compared to the cash used in investing of $156,029 for the year ended December 31, 2020, the increase
of $1,433,613 or 918.8% was largely due to the transfer of ownership of a subsidiary in December 2021.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Net cash provided by financing
activities was $16,664,547 for year ended December 31, 2021 and was primarily attributable to (i) repayments of short-term bank borrowings
of $7,433,187, (ii) repayments of long-term bank borrowings of $22,146, (iii) repayments of loans from other financial institutions of
$300,279, (iv) repayments of obligations under capital leases of $98,972, and (v) repayments to related parties of $7,864,254. This cash
outflow was offset by (i) the proceeds from short-term bank borrowings of $6,665,840, (ii) the proceeds from long-term borrowings of $465,059,
(iii) the amounts advanced from related parties of $6,787,477 and (iv) the proceeds from private placement of $18,465,009.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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: 36pt">In comparison with the cash
provided by financing activities of $12,313,376 for the year ended December 31, 2020, we had a cash inflow from financing activities of
$16,664,547 for the year ended December 31, 2021. The difference was resulting from the proceeds of private placement.</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"><b>Dividends and Distributions</b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">We may rely on dividends and
other distributions on equity to be paid by our PRC subsidiaries and VIEs to fund our cash and financing requirements, including the funds
necessary to pay dividends and other cash distributions to our shareholders, to service any debt we may incur and to pay our operating
expenses. Currently, substantially all of our operations are in PRC. Cash</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt -0.5in; text-align: left; text-indent: 36pt"><i>Direct holding</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">If funds are required by the
Company, the PRC subsidiaries will transfer the cash to MingZhu HK, Yinhua HK, Cheyi HK and Feipeng HK in accordance with the laws and
regulations of the PRC, and then MingZhu HK, Yinhua HK, Cheyi HK and Feipeng HK will transfer the cash to the Comany.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt -0.5in; text-align: justify; text-indent: 36pt"><i>Contractual agreement</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">If funds are required by the
Company, the VIEs will transfer the cash to corresponding WFOE, pursuant to the VIE agreements. WFOE will then transfer the cash to corresponding
direct shareholders that are incorporated in Hong Kong in accordance with the laws and regulations of the PRC, and then corresponding
direct shareholders will transfer the cash to the Company.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Under existing PRC foreign
exchange regulations, payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions,
can be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. Therefore, our PRC
subsidiaries are able to pay dividends in foreign currencies to us without prior approval from SAFE, subject to the condition that the
remittance of such dividends outside of the PRC complies with certain procedures under PRC foreign exchange regulation, such as the overseas
investment registrations by our shareholders or the ultimate shareholders of our corporate shareholders who are PRC residents. Approval
from or registration with appropriate government authorities is, however, required where the RMB is to be converted into foreign currency
and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government
may also at its discretion restrict access in the future to foreign currencies for current account transactions.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Current PRC regulations permit
our PRC subsidiaries to pay dividends to the Company only out of their accumulated profits, if any, determined in accordance with Chinese
accounting standards and regulations. In addition, each of our subsidiaries in China is required to set aside at least 10% of its after-tax
profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Each such entity in China
is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund, although the amount to be
set aside, if any, is determined at the discretion of its board of directors. Although the statutory reserves can be used, among other
ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve
funds are not distributable as cash dividends except in the event of liquidation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"></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: 36pt">For the years ended December
31, 2022, 2021, and 2020, the cash flows between the Company, the Company&#8217;s subsidiaries, and the Company&#8217;s VIEs, and direction
of transfer are as follows:</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">-</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">$</td><td style="text-align: right">8,224,143</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">$</td><td style="text-align: right">2,000</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)">
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    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Cash flows from PRC subsidiaries to the MingZhu HK</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The detailed listing of each cash transferred
and received for each entity during the periods presented as follows:</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>For the years ended December 31, 2021</b></p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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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">$</td><td style="width: 9%; text-align: right">4,000,000</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; vertical-align: top">March 25, 2021</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: left; padding-bottom: 1.5pt">Transfer from Mingzhu Logistics Holdings Limited to YGMZ (Hong Kong) Limited</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="font-weight: bold; text-align: left">Cash flows from the Company to the Company&#8217;s subsidiaries</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; vertical-align: top">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; vertical-align: top">March 17, 2021</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right">2,008,599</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; vertical-align: top">March 23, 2021</td><td>&#160;</td>
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    <td style="text-align: left">$</td><td style="text-align: right">631,218</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; vertical-align: top">April 14, 2021</td><td>&#160;</td>
    <td style="text-align: left">Transfer from YGMZ (Hong Kong) Limited to Shenzhen Yangang Mingzhu Freight Industry Co., Ltd.</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">5,500,000</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; vertical-align: top">June 4, 2021</td><td>&#160;</td>
    <td style="text-align: left">Transfer from YGMZ (Hong Kong) Limited to Shenzhen Yangang Mingzhu Freight Industry Co., Ltd.</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">25,844</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt; vertical-align: top">August 30, 2021</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: left; padding-bottom: 1.5pt">Transfer from YGMZ (Hong Kong) Limited to Shenzhen Yangang Mingzhu Freight Industry Co., Ltd.</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; vertical-align: top">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">Cash flows from the MingZhu HK to PRC subsidiaries</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">$</td><td style="font-weight: bold; text-align: right">8,224,143</td><td style="font-weight: bold; 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">1,000</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; padding-bottom: 1.5pt">Transfer from YGMZ (Hong Kong) Limited to Mingzhu Logistics Holdings Limited</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; vertical-align: top">&#160;</td><td style="font-weight: bold">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>For the years ended December 31, 2020</b></p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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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">399,806</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; padding-bottom: 1.5pt; padding-left: 1.4pt">Transfer from YGMZ (Hong Kong) Limited to Shenzhen Yangang Mingzhu Freight Industry Co., Ltd.</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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</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: 95; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">There was no cash transfer
between the VIEs and other entities.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Except for above cash flows,
for the years ended December 31, 2022, 2021, and 2020, (1) no transfer of other assets has occurred among the Company, its subsidiaries,
and the VIEs, (2) no dividends or distributions have been made by a subsidiary or the VIEs, and (3) the Company has not made any dividends
or distributions to U.S. investors, respectively.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">We intend to keep any future
earnings to finance the expansion of our business, and we do not anticipate that any cash dividends will be paid in the foreseeable future.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Adjusted Capital Expenditures </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: 36pt">Capital expenditures are defined
under GAAP as funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology,
or equipment. To better understand our investment in acquisition and maintaining our revenue equipment, we use adjusted capital expenditures
instead. The adjusted capital expenditures a non-GAAP financial measure that includes cash paid in relation to property and equipment
acquired through the capital leases, and other financial liabilities. The adjusted capital expenditures sums up the cash we spent on (1)
acquisition of new revenue equipment, and (2) the repayments of obligation under capital leases for revenue equipment during the reporting
period. We had adjusted capital expenditures of $826,207, $298,453 and $1,136,273 for the years ended December 31, 2022, 2021 and 2020,
respectively. We intend to fund our future adjusted capital expenditures with our existing cash balance and other financing alternatives.
We will continue to make adjusted capital expenditures to support the growth of 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: 36pt">The table below shows the reconciliation
of capital expenditures and adjusted capital expenditures 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-align: justify; text-indent: 36pt">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 64%; text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Purchases of equipment disclosed as investing cash outflows in the statements of cash flow</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: right">297,221</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: right">199,481</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="width: 1%; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; width: 1%; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; width: 9%; text-align: right">156,029</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left; text-indent: -9pt; padding-left: 9pt">Capital expenditures</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">297,221</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">199,481</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">$</td><td style="text-align: right">156,029</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">Repayments of obligations under capital leases disclosed as financing cash outflow in the statements of cash flow</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">528,986</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">98,972</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">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">980,244</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: left; text-indent: -9pt; padding-left: 9pt">Adjusted capital expenditures</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">$</td><td style="font-weight: bold; text-align: right">826,207</td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">$</td><td style="font-weight: bold; text-align: right">298,453</td><td style="font-weight: bold; text-align: left">&#160;</td><td style="font-weight: bold">&#160;</td>
    <td style="font-weight: bold; text-align: left">$</td><td style="font-weight: bold; text-align: right">1,136,273</td><td style="font-weight: bold; text-align: left">&#160;</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"></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: 96; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->93<!-- 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">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Contingencies</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: 36pt">From time to time, the Company
is party to certain legal proceedings, as well as certain asserted and unasserted claims.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">On January 20, 2022, Shenzhen
Xincang Freight Co., Ltd. submitted the Civil Complaint to The People&#8217;s Court of Yantian District, requesting the defendant Jian
Yang to compensate for the economic loss of RMB 233,055, judgment of the defendant Yangang Pearl for Jian Yang&#8217;s compensation liability
to assume joint liability. According to the civil order issued by The People&#8217;s Court of Yantian District on January 27, 2022, the
applicant Shenzhen Xincang Freight Co., Ltd. applies for property preservation in the case of the liability dispute between the applicant
Shenzhen Xincang Freight Co., Ltd. of seizing and freezing the property worth RMB 234,990.12 under the name of the respondent Mingzhu.
According to the notice of response issued by The People&#8217;s Court of Yantian District, on February 10, 2022, the case of the liability
dispute between the plaintiff and the defendant Mingzhu and Jian Yang was filed by the Court on January 21, 2022. A trial is scheduled
for March 18, 2022. As of the date of this annual report, the case had been concluded and the Company had paid out the claimed amount
of compensation.&#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>5.C. Research and Development, Patents and
Licenses, etc.</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: 36pt">See the discussion under the
headings &#8220;Intellectual Property&#8221; in Item 4 above.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>5.D. Trend Information</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: 36pt">See discussion in Parts A and
B of this item.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>5.E. Off-Balance Sheet Arrangements</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: 36pt">We have no off-balance sheet
arrangements including arrangements that would affect our liquidity, capital resources, market risk support and credit risk support or
other benefits.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>5.F. Tabular Disclosure of Contractual Obligations</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: 36pt">As of December 31, 2022, the
future minimum payments under certain of our contractual obligations were as follows:</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="18" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Payment due by period</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold">Contractual obligations</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Total</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">3-5 years</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: 40%; text-align: left; text-indent: -9pt; padding-left: 9pt">Bank Borrowings</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">10,862,622</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">10,609,270</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">253,352</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">77,464</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">&#160;&#160;&#160;&#160;&#160;-</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">Capital Lease Obligations</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1,915,730</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">757,088</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1,081,178</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</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">Operating Lease Obligations</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">298,924</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">298,924</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>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">77,464</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">Total</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">13,077,276</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">$</td><td style="border-bottom: Black 4pt double; text-align: right">11,665,281</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">1,334,530</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">$</td><td style="border-bottom: Black 4pt double; text-align: right">77,464</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">-</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
  </table><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">See &#8220;Forward-Looking
Statements&#8221; at the beginning of this annual report.</p><div>

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




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

</div><!-- Field: Page; Sequence: 97; 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 -->94<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#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; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>6.A. Directors and Senior Management</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: 36pt">The following table sets forth
information regarding our executive officers and directors as of the date of this annual report. Unless otherwise stated, the business
address for our directors and executive officers is that of our principal executive offices at 27F, Yantian Modern Industry Service Center,
No. 3018 Shayan Road, Yantian District, Shenzhen, Guangdong, China 518081.</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr>
    <td style="border-bottom: black 1.5pt solid; vertical-align: top; width: 30%"><b>Name</b></td>
    <td style="vertical-align: top; width: 1%; text-align: justify">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; vertical-align: bottom; width: 7%; text-align: center"><b>Age</b></td>
    <td style="vertical-align: top; width: 1%; text-align: justify">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; vertical-align: bottom; width: 61%; text-align: center"><b>Position with our company</b></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td>Jinlong Yang</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: center">46</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">Chairman of the Board of Directors and Chief Executive Officer</td></tr>
  <tr style="vertical-align: top; ">
    <td>Zhuo Wang</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: center">35</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">Director</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td>Jingwei Zhang</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: center">34</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">Chief Financial Officer</td></tr>
  <tr style="vertical-align: top; ">
    <td>Mikael Charette</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: center">43</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">Independent Director </td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td>Yuzhou Wang</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: center">43</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">Independent Director </td></tr>
  <tr style="vertical-align: top; ">
    <td>To Wai Suen</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: center">49</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify">Independent Director </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"><b><i>Executive Officers and Directors</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: 36pt"><b><i>Jinlong Yang</i></b>
has served as our Chief Executive Officer and Chairman of our board of directors since April 2018 and the Executive Director and General
Manager of MingZhu since August 2012. Mr. Yang has over ten years of experience in the transportation industry. He joined MingZhu as a
sales manager in May 2009 and was subsequently promoted to the General Manager, Executive Director and legal representative of MingZhu.
Prior to joining MingZhu, Mr. Yang served as an officer at the Exit and Entry Frontier Inspection Stations in Shenzhen, Guangdong, China.
Mr. Yang holds a Bachelor of Law degree from the Party School of the Central Committee of the Communist Party of China. We believe Mr.
Yang is well qualified to serve on our board of directors because of his extensive operating and management experience and knowledge in
the transportation industry.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><b><i>Zhuo Wang</i></b> has
served as our director since April 2018. Mr. Wang has more than ten years of experience in investment and management. Since March 2022,
he serves as an independent director and member of the audit committee on Metal Sky Star Acquisition Corporation, a NASDAQ-listed SPAC
company (MSSAU:US). Since June 2018, he has been the Marketing Manager of Springview Enterprises Private Limited, a Singapore construction
design and building supply company. Since May 2017, Mr. Wang has also been serving as the managing director of China International Securities
Limited, a Hong Kong based securities firm, overseeing the firm&#8217;s brokerage services business operations and performance. Since
March 2017, he has been serving as a director of China International Corporate Management Limited, a Hong Kong-based consulting firm that
provides a range of business solutions to small and medium sized companies in Asia. Since April 2016, Mr. Wang has been serving as the
Head of Finance and Operations of Shines International Limited, a management consultancy firm in Singapore specializing in education.
Since October 2012, Mr. Wang has been serving as Head of Finance and Marketing of GGL Enterprises Pte. Ltd., a Singapore based firm that
provides building external and interior designs, main contractor services and material supplies for major renovation and building works.
In addition, Mr. Wang served as directors in the board of various companies, including Belvedere Ventures Pte Ltd, a real estate development
and construction company, Sandhurst Global Pte Ltd., a security personnel staffing and systems company, and several holding companies.
Mr. Wang holds a Bachelor of Science in Business Management from Babson College in Boston, Massachusetts. We believe Mr. Wang is well
qualified to serve on our board of directors because of his experience in investment and management.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><b><i>Jingwei Zhang</i></b>
has served as our Chief Financial Officer since April 2018. He has been serving as Financial Director of MingZhu since December 2016 where
he oversees all aspects of financial control, manages yearly financial and inter-audits and provides financial, commercial and strategic
support to the company. Since October 30, 2020 Mr. Zhang has served as the Director of Nantai International Inc. (OTC: NTAI), an online
advertising platform. From May 2015 to November 2016, Mr. Zhang served as a corporate accountant of ERI Management, a management advisory
firm in Singapore, where he reviewed clients&#8217; accounts to ensure regulatory and U.S. GAAP compliance, assisted clients on cost management
and budgeting and provided tax-related consultancy to reduce clients&#8217; potential risks. From January 2014 to May 2015, Mr. Zhang
served as an accountant at St. Plum-Blossom Press Pty. Ltd., a publisher in Melbourne, Australia, where he was responsible for bookkeeping
and preparation of financial statements. Mr. Zhang holds a Bachelor of Business and Commerce in Accounting from Monash University in Melbourne,
Australia and an Associates Degree in Business Administration from City University of Hong Kong.</p><div>

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




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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><b><i>Mikael Charette </i></b>has
served as our independent director since September 2020. He served as Vice Chairman and Director of the Canadian Chamber of Commerce in
Shanghai between April 2019 and April 2021 where he represented the interest of the Canadian business community in Shanghai. Since April
2019, he has also been serving as the Vice President of Fung &amp; Yu CPA Ltd., a Hong Kong based accounting firm serving clients in Greater
China and overseas. Since May 2006, Mr. Charette has also been serving as the President of Well Asia Group, an assets holding and managing
company that provides immigration and real estate services to high net worth individuals. For the periods from February 2005 to May 2006
and from January 2009 to December 2015, he served as a partner of Harvey Law Group where he built a successful immigration practice for
high net worth individuals and also represented clients in cross-border transactions and advised on market entry issues in China and other
Asian countries. Mr. Charette holds a Master in Law degree from City University of Hong Kong and a Juris Doctor degree from University
of Victoria in Victoria, Canada. We believe Mr. Charette is well qualified to serve on our board of directors because of his extensive
experience with legal matters relating to cross-border transactions.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><b><i>Yuzhou Wang</i></b> has
served as our independent director since August 2022. Mr. Wang, has over 19 years&#8217; experience in finance and accounting. From September
2020 to current, Mr. Wang has served as the VP of the international financial department of Nanjing Xinjiekou Department Store Co., Ltd.,
d/b/a Cenbest, or Nanjing Cenbest Co. Ltd. (600682). From January 2019 to August 2020, Mr. Wang served as the CEO of Shanghai Yisheng
Financial Consulting Ltd. From July 2014 to December 2018, Mr. Wang served as the VP of financial department of Nanjing Sanpower Group.
From November 2010 to August 2014, Mr. Wang served as the VP of financial department of Zhengxing Wheel Group Co., Ltd. (NYSE: ZX). From
September 2005 to October 2010, Mr. Wang served as an audit manager of Shanghai Deloitte Huayong Certified Public Accountants Co., Ltd.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><b><i>To Wai Suen</i></b> has
served as our independent director since September 2020. Mr. Suen has over 18 years of experience in finance and accounting. Mr. Suen
has been an independent director of China Zenix Auto International Limited (Prior NYSE: ZX and OTC: ZXAIY and later delisted in January
2022), one of the largest commercial vehicle wheel manufacturer in China in both the aftermarket and OEM market by sales volume, since
April 2018. From February 2018 to April 2019, he was an independent director of CT Environmental Group Limited (1363.HK), a company engaging
in industrial wastewater treatment and hazardous waste disposal. He served as the corporate secretary of China Smarter Energy Group Holdings
Limited (1004.HK) from January 2017 to April 2019, where he was responsible for the company&#8217;s mergers, acquisitions, investment,
finance, internal control, audit, compliance and accounting. For the period from May 2015 to August 2016, Mr. Suen served as Chief Financial
Officer and company secretary of China Saite Group Company Limited (153.HK), where he was responsible for the company&#8217;s mergers,
acquisitions, investment, internal control, audit, compliance and accounting. From November 2013 to May 2015, Mr. Suen served as the Chief
Financial Officer of China King Sun Power Group Limited, a company engaging in power plant operation, where he was responsible for mergers
and acquisitions, investment and finance, internal control and accounting of the company. During the same period, he also served as Chief
Financial Officer at DaYe Trust Co. Ltd., which is a finance company engaging in lending and an affiliate of China King Sun Power Group
Limited. Prior to that, he held various audit roles with his last position as senior audit Manager at Deloitte Touche Tohmatsu CPA Ltd.
from January 2001 to January 2012 and Deloitte Touche Tohmatsu Limited from February 2012 to July 2013. Mr. Suen has served as a director
of a number of investment holding companies, including Rising Group Limited, Rising Development Limited, Rising Manufacturing Limited,
each an investment holding company formed under the laws of Hong Kong. Mr. Suen holds a Bachelor of Arts degree from The Chinese University
of Hong Kong and a Bachelor of Commerce degree in accounting from The University of Western Australia. He is a member of the Hong Kong
Institution of Certified Public Accountant. We believe Mr. Suen is well qualified to serve on our board of directors because of his extensive
experience in accounting and finance</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Each of our directors will
serve as a director until our next annual general meeting and until their successors are duly elected and qualified.</p><div>

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




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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Family Relationships</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: 36pt">There are no family relationships,
or other arrangements or understandings between or among any of the directors, executive officers or other person pursuant to which such
person was selected to serve as a director or officer, except that Mr. Zhuo Wang, our director, is the son of Gui Ling Guo, a director
and Vice Chair of the board of directors of MingZhu.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>Duties of Directors</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: 36pt">Under Cayman Islands law, directors
and officers owe the following fiduciary duties to act in good faith in what the director or officer believes to be in the best interests
of the company as a whole;</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">(ii)</td><td style="text-align: justify">duty to exercise powers for the purposes for which those powers
were conferred and not for a collateral purpose;</td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">(iii)</td><td style="text-align: justify">directors should not properly fetter the exercise of future
discretion;</td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">(iv)</td><td style="text-align: justify">duty to exercise powers fairly as between different sections
of shareholders;</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: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">(v)</td>
    <td style="text-align: justify">duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests; and</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">(vi)</td><td style="text-align: justify">duty to exercise independent judgment.</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: 36pt">In addition to the above, directors
also owe a duty of care which is not fiduciary in nature. This duty has been defined as a requirement to act as a reasonably diligent
person having both the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions
as are carried out by that director in relation to the company and the general knowledge skill and experience which that director has.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">As set out above, directors
have a duty not to put themselves in a position of conflict and this includes a duty not to engage in self-dealing, or to otherwise benefit
as a result of their position. However, in some instances what would otherwise be a breach of this duty can be forgiven and/or authorized
in advance by the shareholders provided that there is full disclosure by the directors. This can be done by way of permission granted
in the amended and restated memorandum and articles of association or alternatively by shareholder approval at general meetings.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Accordingly, as a result of
multiple business affiliations, our officers and directors may have similar legal obligations relating to presenting business opportunities
meeting the above-listed criteria to multiple entities. In addition, conflicts of interest may arise when our board evaluates a particular
business opportunity with respect to the above-listed criteria. We cannot assure you that any of the afore-mentioned conflicts will be
resolved in our favor. Furthermore, each of our officers and directors has pre-existing fiduciary obligations to other businesses of which
they are officers or directors.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Our company has the right to
seek damages if a duty owed by our directors is breached. A shareholder may in certain limited exceptional circumstances have the right
to seek damages in our name if a duty owed by our directors is breached. You should refer to &#8220;10.B. Memorandum and Articles of Association
&#8212; Material Differences between U.S. Corporate Law and British Virgin Islands Corporate Law&#8221; for additional information on
our standard of corporate governance under Cayman Islands 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: justify"><b>Employment Agreements</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: 36pt">We have entered into employment
agreements with each of our executive officers. Under these agreements, each of our executive officers is employed for an initial term
of one year and is subject to successive, automatic one-year extensions unless either party gives notice of non-extension to the other
party at least 30 days prior to the end of the applicable term.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">The executive officers are
entitled to a fixed salary and to participate in our equity incentive plans, if any and other company benefits, each as determined by
our board of directors from time to time.</p><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">We may terminate the executive
officer&#8217;s employment for cause, at any time, without notice or remuneration, for certain acts, such as conviction or plea of guilty
to a felony or grossly negligent or dishonest acts to our detriment, or misconduct or a failure to perform agreed duties. In such case,
the executive officer will not be entitled to receive payment of any severance benefits or other amounts by reason of the termination,
and his right to all other benefits will terminate, except as required by any applicable law. We may also terminate his employment without
cause upon 30 days&#8217; advance written notice. In such case of termination by us, we are required to provide the following severance
payments and benefits to the executive officer: a cash payment of one month of base salary as of the date of such termination for each
year (which is any period longer than six months but no more than one year) and a cash payment of half month of base salary as of the
date of such termination for any period of employment no more than six months, provided that the total severance payments shall not exceed
twelve months of base salary.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">The executive officer may terminate
his employment at any time with 30 days&#8217; advance written notice if there is any significant change in his duties and responsibilities
or a material reduction in his annual salary. In such case, the executive officer will be entitled to receive compensation equivalent
to three months of his base salary. In addition, if we or our successor terminates the employment agreements upon a merger, consolidation,
or transfer or sale of all or substantially all of our assets with or to any other individual(s) or entity, the executive officer shall
be entitled to the following severance payments and benefits upon such termination: (1) a lump sum cash payment equal to three months
of base salary at a rate equal to the greater of his annual salary in effect immediately prior to the termination, or his then-current
annua1 salary as of the date of such termination; (2) a lump sum cash payment equal to a pro-rated amount of target annual bonus for the
year immediately preceding the termination; (3) payment of premiums for continued health benefits under our health plans for three months
fo1lowing the termination; and (4) immediate vesting of 100% of the then-unvested portion of any outstanding equity held by the executive
officer. The employment agreements also contain customary restrictive covenants relating to confidentiality, non-competition and non-solicitation,
as well as indemnification of the executive officer against certain liabilities and expenses incurred by him in connection with claims
made by reason of him being an officer of our company.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>6.B. 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"><b>Compensation of Directors and Executive Officers</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: 36pt">For the fiscal year ended December
31, 2022, we paid an aggregate of $106,458 in cash and benefits in-kind granted to or accrued on behalf of all of our directors and members
of senior management for their services, in all capacities, and we did not pay any additional compensation to our directors and members
of senior management. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive
officers and directors. Our PRC subsidiaries and VIEs are required by law to make contributions equal to certain percentages of each employee&#8217;s
salary for his or her pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident
fund.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>Equity Compensation Plan Information</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: 36pt">We have not adopted any equity
compensation plans.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>Outstanding Equity Awards at Fiscal Year-End</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: 36pt">As of December 31, 2022, we
had no outstanding equity awards.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>6.C. Board Practices</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>Terms of Directors and Officers</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: 36pt">Our officers are appointed
by and serve at the discretion of our board of directors. Our directors are not subject to a set term of office and hold office until
the next general meeting called for the election of directors and until their successor is duly appointed or such time as they die, resign
or are removed from office by a shareholders&#8217; ordinary resolution. The office of a director will be vacated automatically if, among
other things, the director resigns in writing, becomes bankrupt or makes any arrangement or composition with his/her creditors generally
or is found to be or becomes of unsound mind.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Our Board of Directors currently
consists of five members. Currently, a majority of our Board is independent. An &#8220;independent director&#8221; is defined under the
Nasdaq rules generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having
a relationship which in the opinion of the company&#8217;s board of directors, would interfere with the director&#8217;s exercise of independent
judgment in carrying out the responsibilities of a director. Our Board has determined that Ms. Wang, Mr. Charette, and Mr. Suen are &#8220;independent
directors&#8221; as defined in the Nasdaq listing standards and applicable SEC rules.</p><div>

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




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

</div><!-- Field: Page; Sequence: 101; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->98<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Mikael Charette, Yuzhou Wang
and To Wai Suen serve as members of our Audit Committee. Mr. Suen serves as the chair of the Audit Committee. Each of our Audit Committee
members satisfy the &#8220;independence&#8221; requirements of the Nasdaq listing rules and meet the independence standards under Rule
10A-3 under the Exchange Act. We have determined that Mr. Suen possesses accounting or related financial management experience that qualifies
her as an &#8220;audit committee financial expert&#8221; as defined by the rules and regulations of the SEC. Our Audit Committee oversees
our accounting and financial reporting processes and the audits of our financial statements. Our Audit Committee performs several functions,
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; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">evaluating the independence and performance of, and assesses
the qualifications of, our independent auditor, and engages such independent auditor;</td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">approving the plan and fees for the annual audit, quarterly
reviews, tax and other audit-related services, and approves in advance any non-audit service to be provided by the independent auditor;</td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">monitoring the independence of the independent auditor and
the rotation of partners of the independent auditor on our engagement team as required by law;</td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">reviewing the financial statements to be included in our Annual
Report on Form 20-F and Current Reports on Form 6-K and reviews with management and the independent auditors the results of the annual
audit and reviews of our quarterly financial statements;</td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">overseeing all aspects of our systems of internal accounting
control and corporate governance functions on behalf of the board;</td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">reviewing and approving in advance any proposed related-party
transactions and report to the full Board on any approved transactions; and</td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0.5in"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">providing oversight assistance in connection with legal, ethical
and risk management compliance programs established by management and our board of directors, including Sarbanes-Oxley Act implementation,
and makes recommendations to our board of directors regarding corporate governance issues and policy decisions.</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"><i>Compensation Committee</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Mikael Charette, Yuzhou Wang
and To Wai Suen serve as members of our Compensation Committee. Mr. Charette serves as the chairman of the Compensation Committee. All
of our Compensation Committee members satisfy the &#8220;independence&#8221; requirements of the Nasdaq listing rules and meet the independence
standards under Rule 10A-3 under the Exchange Act. Our Compensation Committee is responsible for overseeing and making recommendations
to our board of our directors regarding the salaries and other compensation of our executive officers and general employees and providing
assistance and recommendations with respect to our compensation policies and practices.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>Corporate Governance and Nominating Committee</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Mikael Charette, Yuzhou Wang
and To Wai Suen serve as members of our Nominating and Corporate Governance Committee. Mr. Charette serves as the chairman of the Nominating
and Corporate Governance Committee. All of our Nominating and Corporate Governance Committee members satisfy the &#8220;independence&#8221;
requirements of the Nasdaq listing rules and meet the independence standards under Rule 10A-3 under the Exchange Act. Our Nominating and
Corporate Governance Committee is responsible for identifying and proposing new potential director nominees to the board of directors
for consideration and reviewing our corporate governance policies. In addition, occasionally our board of directors may form sub-committees
for certain matters on an ad hoc basis, such as a pricing committee, with advisory powers only, operating under a framework and guidelines
as outlined and defined in advance by our board of directors.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>6.D. Employees</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: 36pt">See the section entitled &#8220;Employees&#8221;
in Item 4B. above.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>6.E. Share Ownership</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: 36pt">See Item 7 below.</p><div>

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

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

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    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->99<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>7.A. Major Shareholders</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: 36pt">The following table sets forth
information regarding the beneficial ownership of our ordinary shares as of the date of this annual report by our officers, directors,
and 5% or greater beneficial owners of ordinary shares.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">We have determined beneficial
ownership in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess
sole or shared voting power or investment power with respect to those securities. The person is also deemed to be a beneficial owner of
any security of which that person has a right to acquire beneficial ownership within 60 days. Unless otherwise indicated, the person identified
in this table has sole voting and investment power with respect to all shares shown as beneficially owned by him, subject to applicable
community property laws.</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: justify"><b>Name and Address of Beneficial Owner<sup>(1)</sup></b></td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Amount and <br/> Nature of <br/> Beneficial <br/> Ownership</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><b>Approximate <br/> Percentage&#160;of <br/> Outstanding <br/> Shares<sup>(2)&#8204;</sup></b></td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="font-weight: bold; text-align: justify">5% or Greater Shareholders</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: justify">Alpha Global (BVI) Limited<sup>(3)</sup></td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">5,400,000</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">23.5</td><td style="width: 1%; text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify">Excelsior Investment Limited<sup>(4)</sup></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1,260,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">5.5</td><td style="text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Exquisite Elite Limited <sup>(5)</sup></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2,250,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">9.8</td><td style="text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify">Stonewdd Global (BVI) Limited<sup>(8)</sup></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2,110,333</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">9.2</td><td style="text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">GYX GLOBAL LIMITED<sup>(9)</sup></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">3,376,750</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">14.7</td><td style="text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: justify">Executive Officers and Directors</td><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">Jinlong Yang<sup>(6)</sup></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">5,400,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">23.5</td><td style="text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify">Jingwei Zhang</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Zhuo Wang <sup>(7)</sup></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2,250,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">9.8</td><td style="text-align: left">%</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify">Mikael Charette</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Yuzhou Wang</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify">To Wai Suen</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; text-align: justify">All directors and executive officers as a group (6 individuals)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">7,650,000</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">33.3</td><td style="text-align: left">%</td></tr>
  </table><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 24px">(1)</td>
    <td style="text-align: justify">Unless otherwise noted, the business address of each of the following entities or individuals is 27F, Yantian Modern Industry Service Center, No. 3018 Shayan Road, Yantian District, Shenzhen, Guangdong, China 518081.</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: 24px; text-align: justify">(2)</td>
    <td style="text-align: justify">Applicable percentage of ownership is based on 22,960,277 ordinary shares outstanding as of the date of this annual report.</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: 24px">(3)</td>
    <td style="text-align: justify">Jinlong Yang, our Chief Executive Officer and Chairman of our board of directors, is the sole shareholder and director of Alpha Global (BVI) Limited, a limited company formed under the laws of the British Virgin Islands and holds the voting and dispositive power over the ordinary shares held by Alpha Global (BVI) Limited. The address of Alpha Global (BVI) Limited is Ritter House, Wickhams Cay II, PO Box 3170, Road Town, Tortola VG1110, British Virgin Islands.</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: 24px">(4)</td>
    <td style="text-align: justify">Gui Ling Guo, a director and Vice Chair of the board of directors of MingZhu and mother of Zhuo Wang, our director, is the sole shareholder and director of Excelsior Investment Limited, a limited company incorporated under the laws of Hong Kong, and holds the voting and dispositive power over the ordinary shares held by Excelsior Investment Limited. The address of Excelsior Investment Limited is FLAT/RM 6 8/F, K Wah Centre, 191 Java Road North Point, Hong Kong.</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: 24px">(5)</td>
    <td style="text-align: justify">Zhuo Wang, our director, is a director and holder of 86% of the outstanding shares of Exquisite Elite Limited, a British Virgin Islands company, and holds the voting and dispositive power over the ordinary shares held by Exquisite Elite Limited. The address of Exquisite Elite Limited is Vistra Corporation Service Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands.</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: 24px">(6)</td>
    <td style="text-align: justify">Consists of 5,400,000 ordinary shares directly held by Alpha Global (BVI) Limited, of which Jinlong Yang, our Chief Executive Officer and Chairman of our board of directors, is the sole shareholder and director. Mr. Yang holds the voting and dispositive power over the ordinary shares held by Alpha Global (BVI) Limited.</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: 24px">(7)</td>
    <td style="text-align: justify">Consists of 2,250,000 ordinary shares directly held by Exquisite Elite Limited, of which Zhuo Wang, our director, is a director and holder of 86% of its outstanding shares. Mr. Wang holds the voting and dispositive power over the ordinary shares held by Exquisite Elite Limited.</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"></p><div>

</div><!-- Field: Page; Sequence: 103; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></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">(8)</td><td style="text-align: justify">Dongdong Wang, manager of Cheyi Network, is the sole shareholder
and director of Stonewdd Global (BVI) Limited, a limited company incorporated under the laws of British Virgin Islands and holds the
voting and dispositive power over the ordinary shares held by Stonewdd Global (BVI) Limited. The address of Stonewdd Global (BVI) Limited
is Ritter House, Wickhams Cay II, PO Box 3170, Road Town, Tortola VG1110, British Virgin Islands.</td>
</tr></table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
<td style="width: 0in"></td><td style="width: 0.25in; text-align: left">(9)</td><td style="text-align: justify">Xiangyin Guo, manager of Zhisheng, is the sole shareholder and
director of GYX GLOBAL LIMITED, a limited company incorporated under the laws of British Virgin Islands, and holds the voting and dispositive
power over the ordinary shares held by GYX GLOBAL LIMITED. The address of GYX GLOBAL LIMITED Limited is Ritter House, Wickhams Cay II,
PO Box 3170, Road Town, Tortola VG1110, British Virgin Islands.</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: 36pt">We are not aware of any arrangement
that may, at a subsequent date, result in a change of control of our company.</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>7.B. Related Party Transactions</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: 36pt">We have adopted an audit committee
charter, which requires the committee to review all related-party transactions on an ongoing basis and all such transactions be approved
by the committee.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Set forth below are the related
party transactions of our company, which are identified in accordance with the rules prescribed under Form F-1 and Form 20-F and may not
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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>Related Party Balances</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: 36pt">The amount due from related
parties consists of the following:</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1.5pt solid; text-align: left; font-weight: bold; vertical-align: bottom">Related Party Name (EN)</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="vertical-align: top; width: 24%; text-align: left">Mr. Dongdong Wang</td><td style="width: 1%">&#160;</td>
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    <td style="width: 25%; text-align: left">Lending with no interests</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left">Exquisite Elite Limited</td><td>&#160;</td>
    <td style="text-align: left; vertical-align: top">Shareholder</td><td>&#160;</td>
    <td style="text-align: left">Advances to payment of professional fee</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">54,882</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left">Mr. Hui Wang</td><td>&#160;</td>
    <td style="text-align: left">Senior employee</td><td>&#160;</td>
    <td style="text-align: left">Advances for operational purpose</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">32,839</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">Chairman and Chief Executive Officer</td><td>&#160;</td>
    <td style="text-align: left">Advances for operational purpose</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">709,694</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; padding-bottom: 1.5pt">Mr. Jinlong Yang&#8217;s family member as sole shareholder</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: left; padding-bottom: 1.5pt">Lending with no interests</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; vertical-align: top">&#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>
    <td style="text-align: center; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
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  </table><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">The amount due to related parties
consists of the following:</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1.5pt solid; text-align: left; font-weight: bold; vertical-align: bottom">Related Party Name (EN)</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Relationship</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Nature</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December&#160;31, <br/> 2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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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">Mr. Zuojie Dai</td><td style="width: 1%">&#160;</td>
    <td style="width: 25%; text-align: left">Manager of MingZhu Pengcheng</td><td style="width: 1%">&#160;</td>
    <td style="width: 25%; text-align: left">Advances for operational purpose</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right">75,180</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">81,375</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left">MingZhu Logistics</td><td>&#160;</td>
    <td style="text-align: left">Mr. Jinlong Yang&#8217;s family member as sole shareholder</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: left">Lending with no interests</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">198,490</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">198,490</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left">Mr. Jingwei Zhang</td><td>&#160;</td>
    <td style="text-align: left">Chief Financial Officer</td><td>&#160;</td>
    <td style="text-align: left">Advances for operational purpose</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">75,021</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left">Lihui Wang</td><td>&#160;</td>
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">Advances for operational purpose</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">1,552,720</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left; padding-bottom: 1.5pt">Xiangyin Guo</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: left; padding-bottom: 1.5pt">Advances for operational purpose</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">4,405,945</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 4pt; vertical-align: top">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="text-align: justify; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
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    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">294,344</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
  </table><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#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: 104; 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 -->101<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The collateral and guarantee made by related parties
to the Company as of December 31, 2022 consists of the following:</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; padding-left: 0.125in; text-indent: -0.125in; text-align: left; font-weight: bold">Related Parties</td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; font-weight: bold; text-align: center">Term</td><td style="text-align: center; padding-bottom: 1.5pt">&#160;</td>
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<br/>
Principal</b></span></td><td style="text-align: center; padding-bottom: 1.5pt">&#160;</td><td style="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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 Amount <br/>
as of <br/>
December&#160;31,<br/>
 2022</td><td style="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-indent: -0.125in; text-align: left; padding-left: 0.125in">Guarantee by Mr. Jinlong Yang and MingZhu Logistics &#12288;</td><td style="width: 1%">&#160;</td>
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    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">347,967</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt">Bank of China(6) </td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt">From May 16, 2022 to May 16, 2023</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="vertical-align: bottom; text-align: right">4,059,618</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">3,340,486</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt">China Everbright Bank(4) &#12288;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-indent: -0.125in; text-align: left; padding-left: 0.125in">Guarantee by Mr. Jinlong Yang and MingZhu Logistics </td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt">Guilin Bank(5) </td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt">From April 28, 2022 to&#160;&#160;April 28, 2023</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="vertical-align: bottom; text-align: right">420,460</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">420,460</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-indent: -0.125in; text-align: left; padding-left: 0.125in">Guarantee by Mr. Dongdong Wang and his Spouse &#12288;</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt">Zhejiang Mintai Commercial Bank &#12288;</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt">From June 30, 2022 to June 8, 2023</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">289,973
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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">&#12288;289,973</span></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-indent: -0.125in; text-align: left; padding-left: 0.125in">Guarantee by Mr. Dongdong Wang, Mr. Dongdong Wang&#8217;s Spouse and five employees </td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt">Zhejiang Tailong Commercial Bank Co., Ltd. (2) </td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt">From November 18, 2022 to&#160;&#160;May 17, 2023</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="vertical-align: bottom; text-align: right">376,965</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">376,965</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-indent: -0.125in; text-align: left; padding-left: 0.125in">Guarantee by Mr. Lihui Wang &#12288;</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt">Bank of China(6) &#12288;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="vertical-align: bottom; text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">289,973</span></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;289,973</span></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-indent: -0.125in; text-align: left; padding-bottom: 1.5pt; padding-left: 0.125in">Guarantee by Mr. Lihui Wang </td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-bottom: 1.5pt; padding-left: 1.4pt">Bank of China(6) </td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -0.125in; padding-bottom: 4pt; padding-left: 0.125in; vertical-align: top">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-bottom: 4pt; padding-left: 1.4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-bottom: 4pt; padding-left: 1.4pt">&#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">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The collateral and guarantee made by related parties
to the Company as of December 31, 2021 consists of the following:</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: bottom">
    <td style="border-bottom: Black 1.5pt solid; text-align: left; font-weight: bold; vertical-align: bottom">Related Parties</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; font-weight: bold; text-align: center">Institution Name</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; font-weight: bold; text-align: center">Term</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="vertical-align: top; text-align: left; text-indent: -9pt; padding-left: 9pt">Guarantee by Mr. Dongdong Wang and his Spouse</td><td style="width: 1%">&#160;</td>
    <td style="vertical-align: top; width: 19%; text-align: center">Hangzhou United Rural Commercial Bank Co.,Ltd.</td><td style="width: 1%">&#160;</td>
    <td style="vertical-align: top; width: 19%; text-align: center">From November 11, 2021 to November 5, 2022</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">156,922</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left; text-indent: -9pt; padding-left: 9pt">Guarantee by Mr. Dongdong Wang and his Spouse</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Hangzhou United Rural Commercial Bank Co.,Ltd.</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">From September 23, 2021 to September 22, 2022</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">78,461</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">78,461</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left; text-indent: -9pt; padding-left: 9pt">Guarantee by Mr. Dongdong Wang and his Spouse</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Hangzhou United Rural Commercial Bank Co.,Ltd.</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">From September 16, 2021 to September 15, 2022</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">78,461</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">78,461</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left; text-indent: -9pt; padding-left: 9pt">Guarantee by Mr. Dongdong Wang and his Spouse</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Hangzhou United Rural Commercial Bank Co.,Ltd.</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">From July 14, 2021 to January 13, 2022</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">78,461</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">78,461</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left; text-indent: -9pt; padding-left: 9pt">Guarantee by Mr. Dongdong Wang and his Spouse</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Hangzhou United Rural Commercial Bank Co.,Ltd.</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">From June 29, 2021 to January 13, 2022</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">784,609</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">784,609</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left; text-indent: -9pt; padding-left: 9pt">Guarantee by Mr. Dongdong Wang, Mr. Dongdong Wang&#8217;s Spouse and five employees</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Zhejiang Tailong Commercial Bank Co.,Ltd</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">From November 11, 2021 to November 19, 2022</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">470,765</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">470,765</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left; text-indent: -9pt; padding-left: 9pt">Guarantee by Mr. Jinlong Yang and MingZhu Logistics.</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Industrial Bank Co., Ltd.</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">From April 28, 2021 to May 7, 2022</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">470,765</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">376,612</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left; text-indent: -9pt; padding-left: 9pt">Pledge by properties owned by Mr. Jinlong Yang and properties owned by family members of Mr. Jinlong Yang</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">China Everbright Bank Co., Ltd.</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">From November 12, 2021 to November 20, 2022</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2,353,827</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">2,259,674</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left; text-indent: -9pt; padding-left: 9pt">Guarantee by Mr. Jinlong Yang and MingZhu Logistics.</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">Bank of Communications Co., Ltd.</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: center">From April 29, 2021 to May 9, 2022</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">3,923,046</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">3,295,359</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Guarantee by Mr. Jinlong Yang and MingZhu Logistics.</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-bottom: 1.5pt">WeBank Co., Ltd.</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-bottom: 1.5pt">From August 26, 2021 to August 26, 2023</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">470,765</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">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">448,348</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt; vertical-align: top">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">8,866,082</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">8,027,672</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
  </table><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>7.C. Interests of Experts and Counsel</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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: 36pt">Not applicable.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Consolidated Statements and Other Financial
Information</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: 36pt">The financial statements required
by this item may be found at the end of this report on 20-F, beginning on page F-1.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Dividends</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: 36pt">The holders of our ordinary
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, our 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 ordinary 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">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>No Significant Changes</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: 36pt">No significant changes to our
financial condition have occurred since the date of the annual financial statements contained herein.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>9.A. Offer and Listing Details</b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Our ordinary shares have been
listed on the Nasdaq Capital Market under the symbol &#8220;YGMZ&#8221; since October 21, 2020, Prior to that date, there was no public
trading market for our ordinary shares.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>9.B. Plan of Distribution</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: 36pt">Not Applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>9.C. Markets</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: 36pt">Nasdaq Capital Market.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>9.D. Selling Shareholders</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: 36pt">Not Applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>9.E. Dilution</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: 36pt">Not Applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>9.F. Expenses of the Issuer</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: 36pt">Not Applicable.</p><div>

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




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

</div><!-- Field: Page; Sequence: 106; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->103<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>10.A. Share Capital</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: 36pt">Not Applicable.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>10.B. Memorandum and Articles of Association</b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">We are a Cayman Islands exempted
company with limited liability and our affairs are governed by our memorandum and articles of association and the Companies Act (Revised)
of the Cayman Islands. The following description of certain provisions of our memorandum and articles of association does not propose
to be complete and is qualified in its entirety by our memorandum and articles of association.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">We are authorized to issue
50,000,000 ordinary shares of par value $0.001 each. All of our outstanding ordinary shares are fully paid and non-assessable. Certificates
representing the ordinary shares are issued in registered form. Our shareholders, whether or not they are non-residents of the Cayman
Islands, may freely hold and transfer their ordinary shares in accordance with the amended and restated memorandum and articles of association</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Our charter documents consist
of our amended and restated memorandum of association and our amended and restated articles of association, or the memorandum and articles
of association. We may amend our memorandum and articles of association generally by a special resolution of our shareholders.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Pursuant to our memorandum
and articles of association, the business of our company is managed by our board of directors. Commencing with the first annual meeting
of the shareholders, directors are elected for a term of office to expire at the next succeeding annual meeting of the shareholders after
their election. Each director will hold office until the expiration of his or her term of office and until his or her successor has been
elected and qualified, or until his or her earlier death, resignation or removal by the shareholders or a resolution passed by the majority
of the remaining directors.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">In the interim between annual
meetings of shareholders, or special meetings of shareholders called for the election of directors, any vacancy on the board of directors
may be filled by the vote of a majority of the remaining directors then in office, although less than a quorum, or by the sole remaining
director. A director elected to fill a vacancy resulting from death, resignation or removal of a director will serve for the remainder
of the full term of the director whose death, resignation or removal will have caused such vacancy and until his successor will have been
elected and qualified.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">There is no cumulative voting
by shareholders for the election of directors. We do not have any age-based retirement requirement and we do not require our directors
to own any number of shares to qualify as a director.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Board meetings may be held
at the discretion of the directors at such times and in such manner as the directors may determine upon not less than three days&#8217;
notice having been given to all directors. Decisions made by the directors at meetings shall be made by a majority of the directors. There
must be at least a majority of the directors (with a minimum of two) at each meeting.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">A director must, immediately
after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by us, disclose such interest
to the board of directors. A director who is interested in a transaction entered into, or to be entered into, by the company, may vote
on a matter related to the transaction, attend a meeting of directors at which a matter relating to the transaction arises and be included
among the directors present at the meeting for the purposes of a quorum and sign a document on behalf of the company, or do any other
thin in his capacity as a director, that relates to the transaction. A director is not required to disclose his interest in a transaction
or a proposed transaction to our board of directors if the transaction or proposed transaction is between the director and us, or the
transaction or proposed transaction is or is to be entered into the ordinary course of our business and on usual terms and conditions.</p><div>

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




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

</div><!-- Field: Page; Sequence: 107; 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 -->104<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">The directors may exercise
all powers of our company to borrow money, mortgage or charge our undertakings and property, issue debentures, debenture shares 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-align: justify; text-indent: 36pt">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Our directors may, by resolution,
fix the compensation of directors in respect of services rendered or to be rendered in any capacity to us.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">A director may attend and speak
at any meeting of the shareholders and at any separate meeting of the holders of any class of our shares.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">We are authorized to issue
50,000,000 ordinary shares of par value $0.001 each. All of our outstanding ordinary shares are fully paid and non-assessable. Certificates
representing the ordinary shares are issued in registered form. Our shareholders, whether or not they are non-residents of the Cayman
Islands, may freely hold and transfer their ordinary shares in accordance with the amended and restated memorandum and articles of association</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Our memorandum of association
authorizes our board of directors to issue additional ordinary shares from time to time as our board of directors shall determine, to
the extent of available authorized but unissued shares. Our memorandum of association also authorizes our board of directors to establish
from time to time one or more series of preference shares and to determine, with respect to any series of preference shares, the terms
and rights of that series, including:</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">&#9679;</td>
    <td style="text-align: justify">the designation of the series to be issued;</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: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">the number of shares of the series;</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: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">the dividend rights, dividend rates, conversion rights, voting rights; and</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: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">the rights and terms of redemption and liquidation preferences.</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: 36pt">Our board of directors may
issue preference shares without action by our shareholders to the extent authorized but unissued. Issuance of these shares may dilute
the voting power of holders of ordinary shares.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Under our memorandum and articles
of association, we are required to hold an annual meeting of shareholders each year at such date and time determined by our directors.
Meetings of shareholders may be called pursuant to board resolution or the written request of shareholders holding more than 30% of the
votes of our outstanding voting shares. Written notice of meetings of shareholders must be given to each shareholder entitled to vote
at a meeting not fewer than 10 days prior to the date of the meeting, with certain limited exceptions. The written notice will state the
place, time and business to be conducted at the meeting. The shareholders listed in our share register on the date prior to the date the
notice is given shall be entitled to vote at the meeting, unless the notice provides a different date for determining the shareholders
who are entitled to vote.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">A meeting of shareholders held
without proper notice will be valid if shareholders holding 90% majority of the total number of shares entitled to vote on all matters
to be considered at the meeting, or 90% of the votes of each class or series of shares where shareholders are entitled to vote thereon
as a class or series, together with an absolute majority of the remaining votes, have waived notice of the meeting and, for this purpose,
presence of a shareholder at the meeting is deemed to constitute a waiver. The inadvertent failure of the directors to give notice of
a meeting to a shareholder, or the fact that a shareholder has not received notice, will not invalidate a meeting.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Shareholders may vote in person
or by proxy. No business may be transacted at any meeting unless a quorum of shareholders is present. A quorum consists of the presence
in person or by proxy of holders entitled to exercise at least 50% of the voting rights of the shares of each class or series of shares
entitled to vote as a class or series thereon and the same proportion of the votes of the remaining shares entitled to vote thereon.</p><div>

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




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

</div><!-- Field: Page; Sequence: 108; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->105<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">The Companies Act does not
limit the extent to which a company&#8217;s memorandum and articles of association may provide for indemnification of officers and directors,
except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification
against civil fraud or the consequences of committing a crime. Our amended and restated memorandum and articles of association permit
indemnification of officers and directors for losses, damages, costs and expenses incurred in their capacities as such unless such losses
or damages arising from dishonesty of such directors or officers willful default of fraud.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">This standard of conduct is
generally the same as permitted under the Delaware <i>General</i> 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 view 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">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Material Differences between U.S. Corporate
Law and Cayman Islands Corporate Law</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: 36pt">The Companies Act is modeled
after that of English law but does not follow many recent English law statutory enactments. In addition, the Companies Act differs from
laws applicable to United States corporations and their shareholders. Set forth below is a summary of some of the significant differences
between the provisions of the Companies Act applicable to us and the laws applicable to companies incorporated in the State of Delaware</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">The Companies Act permits mergers
and consolidations between Cayman Islands companies and between Cayman Islands companies and non-Cayman Islands companies. For these purposes,
a &#8220;merger&#8221; means the merging of two or more constituent companies and the vesting of their undertaking, property and liabilities
in one of such companies as the surviving company, and a &#8220;consolidation&#8221; means the combination of two or more constituent
companies into a consolidated company and the vesting of the undertaking, property and liabilities of such companies to the consolidated
company.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">In order to effect a merger
or consolidation, the directors of each constituent company must approve a written plan of merger or consolidation, which must then be
authorized by a special resolution of the shareholders of each constituent company, and such other authorization, if any, as may be specified
in such constituent company&#8217;s articles of association.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">The plan of merger or consolidation
must be filed with the Registrar of Companies of the Cayman Islands together with a declaration as to the solvency of the consolidated
or surviving company, a list of the assets and liabilities of each constituent company and an undertaking that a copy of the certificate
of merger or consolidation will be given to the members and creditors of each constituent company and that notification of the merger
and consolidation will be published in the Cayman Islands Gazette. Dissenting shareholders have the right to be paid the fair value of
their shares if they follow the required procedures under the Companies Act subject to certain exceptions. The fair value of the shares
will be determined by the Cayman Islands court if it cannot be agreed among the parties. Court approval is not required for a merger or
consolidation effected in compliance with these statutory procedures.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">In addition, there are statutory
provisions that facilitate the reconstruction and amalgamation of companies, provided that the arrangement is approved by a majority in
number of each class of shareholders and creditors with whom the arrangement is to be made, and who must in addition represent three-fourths
in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy
at a meeting, or meetings, convened for that purpose. The convening of the meetings and subsequently the arrangement must be sanctioned
by the Grand Court of the Cayman Islands.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">While a dissenting shareholder
has the right to express to the court the view that the transaction ought not to be approved, the court can be expected to approve the
arrangement if it determines that:</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">&#9679;</td>
    <td style="text-align: justify">the statutory provisions as to the required majority vote have been met;</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: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
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  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>




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

</div><!-- Field: Page; Sequence: 109; 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 -->106<!-- 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><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">&#9679;</td>
    <td style="text-align: justify">the arrangement is such that an intelligent and honest man of that class acting in respect of his interest would reasonably approve; and</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: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act.</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: 36pt">When a take-over offer is made
and accepted by holders of not less than 90% of the shares within four months, the offer, or may, within a two-month period conversing
on the expiration of such four months period, require the holders of the remaining shares to transfer such shares on the terms of the
offer. An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed unless there is evidence of fraud,
bad faith or collusion.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">If the arrangement and reconstruction
is thus approved, the dissenting shareholders would have no rights comparable to appraisal rights, which would otherwise ordinarily be
available to dissenting shareholders of United States corporations, providing rights to receive payment in cash for the judicially determined
value of the shares.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><i>Shareholders&#8217; Suits</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">In principle, we will normally
be the proper plaintiff to sue for a wrong done to us as a company and as a general rule a derivative action may not be brought by a minority
shareholder. However, based on English authorities, which would in all likelihood be of persuasive authority in the Cayman Islands, there
are exceptions to the foregoing principle, including when:</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">&#9679;</td>
    <td style="text-align: justify">a company acts or proposes to act illegally or ultra vires and is therefore incapable of ratification by the shareholders;</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: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">the act complained of, although not ultra vires, could only be duly effected if authorized by more than a simple majority vote that has not been obtained; and</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: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">those who control the company are perpetrating a &#8220;fraud on the minority.&#8221;</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: 36pt"><i>Indemnification of Directors
and Executive Officers and Limitation of Liability</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">The Companies Act does not
limit the extent to which a company&#8217;s memorandum and articles of association may provide for indemnification of officers and directors,
except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification
against civil fraud or the consequences of committing a crime. Our amended and restated memorandum and articles of association permit
indemnification of officers and directors for losses, damages, costs and expenses incurred in their capacities as such unless such losses
or damages arising from dishonesty of such directors or officers willful default of fraud.</p><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><i>Director&#8217;s Fiduciary
Duties</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">As a matter of Cayman Islands
law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company and therefore it is considered
that he or she owes the following duties to the company: a duty to act bona fide in the best interests of the company, a duty not to make
a profit based on his or her position as director (unless the company permits him or her to do so) and a duty not to put himself or herself
in a position where the interests of the company conflict with his or her personal interest or his or her duty to a third party. A director
of a Cayman Islands company owes to the company a duty to act with skill and care. It was previously considered that a director need not
exhibit in the performance of his or her duties a greater degree of skill than may reasonably be expected from a person of his or her
knowledge and experience. However, courts are moving towards an objective standard with regard to the required skill and care and these
authorities are likely to be followed in the Cayman Islands.</p><div>

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




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

</div><!-- Field: Page; Sequence: 110; 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 -->107<!-- 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; text-indent: 36pt">Under Delaware corporate law,
a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty
of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent
person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all
material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director acts in a
manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain
or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders
take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally.
In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the
action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of
the fiduciary duties. Should such evidence be presented concerning a transaction by a director, the director must prove the procedural
fairness of the transaction, and that the transaction was of fair value to the corporation.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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: 36pt"><i>Shareholder Action by Written
Consent</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">The Cayman Islands law and
our articles of association provide that shareholders may approve corporate matters by way of a unanimous written resolution signed by
or on behalf of each shareholder who would have been entitled to vote on such matter at a general meeting without a meeting being held.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Under the Delaware General
Corporation Law, a corporation may eliminate the right of shareholders to act by written consent by an amendment to its certificate of
incorporation.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">The Companies Act provides
shareholders with only limited rights to requisition a general meeting and does not provide shareholders with any right to put any proposal
before a general meeting. However, these rights may be provided in articles of association. Our articles of association allow our shareholders
holding not less than 40% of all voting power of our share capital in issue to requisition a shareholder&#8217;s meeting. Other than this
right to requisition a shareholders&#8217; meeting, our articles of association do not provide our shareholders other right to put proposal
before a meeting. As an exempted Cayman Islands company, we are not obliged by law to call shareholders&#8217; annual general meetings.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Under the Delaware General
Corporation Law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with
the notice provisions in the governing documents and rules promulgated by the SEC. A special meeting may be called by the board of directors
or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">There are no prohibitions in
relation to cumulative voting under the Companies Act, but our articles of association do not provide for cumulative voting.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Under the Delaware General
Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation&#8217;s certificate of incorporation
specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors
since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases
the shareholder&#8217;s voting power with respect to electing such director.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Under our amended and restated
memorandum and articles of association, directors may be removed with or without cause, by an ordinary resolution of our shareholders.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Under the Delaware General
Corporation Law, a director of a corporation with a may be removed with the approval of a majority of the outstanding shares entitled
to vote.</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: 111; 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 -->108<!-- 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; text-indent: 36pt"><i>Transactions with Interested
Shareholders</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">The Companies Act has no comparable
statute. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. However,
although Cayman Islands law does not regulate transactions between a company and its significant shareholders, it does provide that such
transactions must be entered into bona fide in the best interests of the company and for a proper corporate purpose and not with the effect
of constituting a fraud on the minority shareholders.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">The Delaware General Corporation
Law contains a business combination statute applicable to Delaware corporations whereby, unless the corporation has specifically elected
not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain business
combinations with an &#8220;interested shareholder&#8221; for three years following the date that such person becomes an interested shareholder.
An interested shareholder generally is a person or a group who or which owns or owned 15% or more of the target&#8217;s outstanding voting
share within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the
target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on
which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction
which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware corporation to negotiate
the terms of any acquisition transaction with the target&#8217;s board of directors.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Under the Companies Act, a
company may be wound up by either an order of the courts of the Cayman Islands or by a special resolution of its members or, if the company
is unable to pay its debts as they fall due, by an ordinary resolution of its members. The court has authority to order winding up in
a number of specified circumstances including where it is, in the opinion of the court, just and equitable to do so. Under the Companies
Act and our articles of association, our company may be dissolved, liquidated or wound up by a special resolution of our shareholders.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Under the Delaware General
Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding
100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by
a simple majority of the corporation&#8217;s outstanding shares. Delaware law allows a Delaware corporation to include in its certificate
of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Under the Companies Act and
our articles of association, if our share capital is divided into more than one class of shares, we may vary the rights attached to any
class with the written consent of the holders of two-thirds of the issued shares of that class or with the sanction of a special resolution
passed at a separate general meeting of the holders of the shares of that class.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Under the Delaware General
Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such
class, unless the certificate of incorporation provides otherwise.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">As permitted by the Companies
Act, our amended and restated memorandum and articles of association may only be amended with a special resolution of our shareholders.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Under the Delaware General
Corporation Law, a corporation&#8217;s governing documents may be amended with the approval of a majority of the outstanding shares entitled
to vote, unless the certificate of incorporation provides otherwise.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><i>Rights of Non-Resident or
Foreign Shareholders</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">There are no limitations imposed
by our amended and restated memorandum and articles of association on the rights of non-resident or foreign shareholders to hold or exercise
voting rights on our shares. In addition, there are no provisions in our amended and restated memorandum and articles of association governing
the ownership threshold above which shareholder ownership must be disclosed.</p><div>

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

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

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

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Our ordinary shares are listed
on the Nasdaq Capital Market under the symbol &#8220;YGMZ&#8221;. We do not intend to apply for listing of the warrants on any securities
exchange or nationally recognized trading system, and we do not expect a market to develop for the warrants.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">The transfer agent and registrar
for our securities is Vstock Transfer, LLC. The transfer agent and registrar&#8217;s address is 18 Lafayette Place, Woodmere, New York
11598.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>10.C. Material Contracts</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: 36pt">Below is a summary of all material
contracts to which we are a party dated within the preceding two years from the date hereof other than agreements entered into in our
ordinary course of business:</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">On November 2022, the Company
rolled over into a comprehensive credit agreement with Everbright Bank pursuant to which the Company may borrow up to RMB15 million (approximately
$2,174,796).</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">On November 23, 2022, MingZhu
entered into an enterprise loan agreement with Everbright Bank for a working capital loan for the drawdown of RMB15 million (approximately
$2,174,796) for one (1) year at an annual interest rate of 5.0% with a maturity date of November 22, 2023. Pursuant to the loan agreement,
the loan is guaranteed by Jinlong Yang, our chairman and Chief Executive Officer, Guizhi Yang, Jinlong Yang&#8217;s sister, and Shenzhen
Mingzhu Logistics Co., Ltd., a company wholly owned by Jinlong Yang, each of whom has entered into separate pledge and guarantee agreements
with Everbright Bank.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">On May 2022, the Company rolled
over into a comprehensive credit agreement with Everbright Bank pursuant to which the Company may borrow up to RMB28 million (approximately
$4,059,618).</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">On May 16, 2022, MingZhu entered
into an enterprise loan agreement with Everbright Bank for a working capital loan for the drawdown of RMB28 million (approximately $4,059,618)
for one (1) year at an annual interest rate of 4.5% with a maturity date of May 16, 2023. Pursuant to the loan agreement, the loan is
guaranteed by Jinlong Yang, our chairman and Chief Executive Officer, Guizhi Yang, Jinlong Yang&#8217;s sister, and Shenzhen Mingzhu Logistics
Co., Ltd., a company wholly owned by Jinlong Yang, each of whom has entered into separate pledge and guarantee agreements with Everbright
Bank.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">On April 29, 2021, MingZhu
entered into a supplementary agreement with Communications Bank, pursuant to which, Communications Bank agreed provide a revolving credit
of line up to RMB 25 million (approximately $3.92 million) to MingZhu. Pursuant to the agreement, MingZhu will submit an application for
use of loan limit to Communications Bank prior to each applicable drawdown that will set forth the terms of each borrowing thereunder.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">On April 29, 2021, MingZhu
submited an application for use of loan limit to Communications Bank for the drawdown of RMB 25 million (approximately $3.92 million)
for one (1) year at an annual interest rate of 5.655% with a maturity date of May 9, 2022. Pursuant to the loan agreement, the loan is
guaranteed by Jinlong Yang, our chairman and Chief Executive Officer, Guizhi Yang, Jinlong Yang&#8217;s sister, Hongxin Sun, Jinhua Yang
and Mingzhu. Each of Jinlong Yang and Mingzhu has respectively entered into separate pledge and guarantee agreements with Communications
Bank and others have jointly entered into a pledge and guarantee agreement with Communications Bank.</p><div>

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




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

</div><!-- Field: Page; Sequence: 113; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->110<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><i>Capital Lease Contract with
Chailease International Finance Corporation</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">On September 9, 2019, MingZhu
entered into a capital lease contract with Chailease International Finance Corporation (&#8220;Chailease&#8221;) for leasing of 19 tractors
from September 20, 2019 to August 20, 2022 with the option to purchase such tractors at the end of the lease term for $0. The total consideration
of lease is RMB 5,000,000 (approximately $718,205), which is to be made in 35 installment payments. In the event of any delay in payment,
Chailease may charge an annual interest of 20% of any delayed payments as penalty. MingZhu agreed to make import tax payments and purchase
relevant insurance for the lease properties.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Upon the occurrence of an event
of default, Chailease has the right to declare all outstanding payment to become immediately due and payable, charge delay penalty, terminate
the contract, request return of the lease properties an seek for compensation damages. Events of default under the capital lease contract
include, among other matters, delay in payment, disposal, transfer, sublease, pledge of the lease properties, material adverse changes
in MingZhu&#8217;s financial conditions, MingZhu&#8217;s material breach of loan agreements with other financial institutions, disposal
or transfer of MingZhu&#8217;s material assets, and a breach of any provisions in the capital lease contract. For any default, Chailease
is entitled to 30% of the outstanding payment under the contract as liquidation damage. MingZhu agreed to waive any claims against the
lease properties once returned upon request by Chailease for MingZhu&#8217;s breach of contract.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">MingZhu may not assign its
rights and obligations under this contract to any third party, or sublease, pledge or allow any third party to use or possess the lease
properties. For any early termination of the contract initiated by MingZhu, MingZhu agreed to pay all the outstanding payments under the
contract, including any delay penalties, liquidation damages, taxes and insurance payments.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><i>Share Purchase Agreement
with Cheyi BVI</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">On December 29, 2021, we entered
into a Share Purchase Agreement with Cheyi BVI and each of shareholders of Cheyi BVI.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Pursuant to the agreement,
the total consideration for the acquisition of 100% equity ownership of Cheyi BVI was an aggregate of $23,470,712, consisting of the issuance
by the Company to the shareholders of Cheyi BVI an aggregate of 3,189,000 Company&#8217;s ordinary shares (representing $6,760,680 with
$2.12 per ordinary share) and payment of $2,000,000 at closing, and Year-2021 earnout payment of $8,826,019 and Year-2022 earnout payment
of $5,884,013 if Cheyi BVI&#8217;s audited net income for its fiscal year 2021 and 2022 is no less than U.S. $3,000,000 respectively.
The two earnout payments are due 13 months upon the delivery of Cheyi BVI&#8217;s audited financial statements.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">On December 31, 2021, the parties
completed the transaction. Upon the closing of the transaction, we acquired 100% shares outstanding of the Cheyi BVI, and we issued 3,189,000
ordinary shares and paid $2,000,000 to the sellers.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">On March 14, 2022, we entered
into a Share Purchase Agreement with Yinhua which develops and operates a comprehensive auto related service platform to serve auto insurance
companies, and each of the shareholders of the Yinhua.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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: 36pt">Under terms of the share purchase
agreement, we agreed to pay $10,076,600 in exchange for 100% equity of Yinhua. Of the total consideration to be paid, $7,078,100 was paid
in the form of 3,826,000 newly issued ordinary shares of the Company, representing $1.85 per ordinary share of the Company, and $1,000,000
in cash upon closing. In addition, a cash earnout of $1,998,500 shall be paid if Yinhua achieves a net income target threshold of $1.3
million during the calendar year of 2022.</p><div>

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

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

</div><!-- Field: Page; Sequence: 114; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->111<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">On March 18, 2022, the parties
completed the transaction. Upon the closing of the transaction, we acquired 100% of the outstanding shares of the Yinhua, and we issued
3,826,000 ordinary shares and paid $1,000,000 in cash to the sellers.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">We have not entered into any
material contracts other than in the ordinary course of business and other than those described in this annual report.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><i>Share Purchase Agreement
with Feipeng BVI</i></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">On December 21, 2022, we entered
into a Share Purchase Agreement with Feipeng BVI which provides regional trucking services, and each of the shareholders of the Feipeng
BVI. , pursuant to which, among other things and subject to the terms and conditions contained therein, we acquired 100% of Feipeng BVI
for approximately $14,540,436, of which US $9,550,000 will be paid in cash upon closing in form of cash. Feipeng BVI shall receive a certain
number of shares valued at $4,990,436 if it achieves a targeted net income of US$2.4 million during the calendar year 2023.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Under terms of the share purchase
agreement, we agreed to pay $14,540,436 in exchange for 100% equity of Feipeng BVI. Of the total consideration to be paid, $9,550,000
was paid in the form of cash, and $1,000,000 in cash upon closing. In addition, Feipeng BVI shall receive a certain number of shares valued
at $4,990,436 if it achieves a targeted net income of US$2.4 million during the calendar year 2023.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">On December 21, 2022, the parties
completed the transaction. Upon the closing of the transaction, we acquired 100% of the outstanding shares of the Feipeng BVI, and we
paid $9,550,000 in cash to the sellers.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">We have not entered into any
material contracts other than in the ordinary course of business and other than those described in this annual report.</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>10.D. Exchange Controls</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>British Virgin Islands</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: 36pt">There are currently no exchange
control regulations in the British Virgin Islands applicable to us or our shareholders.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>The PRC</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: 36pt">China regulates foreign currency
exchanges primarily through the following rules and regulations:</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">&#9679;</td>
    <td style="text-align: justify">Foreign Currency Administration Rules of 1996, as amended; and</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: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">&#9679;</td>
    <td style="text-align: justify">Administrative Rules of the Settlement, Sale and Payment of Foreign Exchange of 1996.</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: 36pt">As we disclosed in the risk
factors above, Renminbi is not a freely convertible currency at present. Under the current PRC regulations, conversion of Renminbi is
permitted in China for routine current-account foreign exchange transactions, including trade and service related foreign exchange transactions,
payment of dividends and service of foreign debts. Conversion of Renminbi for most capital-account items, such as direct investments,
investments in PRC securities markets and repatriation of investments, however, is still subject to the approval of SAFE.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Pursuant to the above-mentioned
administrative rules, foreign-invested enterprises may buy, sell and/or remit foreign currencies for current account transactions at banks
in China with authority to conduct foreign exchange business by complying with certain procedural requirements, such as presentment of
valid commercial documents. For capital-account transactions involving foreign direct investment, foreign debts and outbound investment
in securities and derivatives, approval from SAFE is a pre-condition. Capital investments by foreign-invested enterprises outside China
are subject to limitations and requirements in China, such as prior approvals from the PRC Ministry of Commerce or SAFE.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>10.E. Taxation</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: 36pt">The following summary contains
a description of certain Cayman Islands and U.S. federal income tax consequences of the acquisition, ownership and disposition of securities,
but it does not purport to be a comprehensive description of all the tax considerations that may be relevant to a decision to purchase
securities. The summary is based upon the tax laws of the Cayman Islands and regulations thereunder and on the tax laws of the United
States and regulations thereunder as of the date hereof, which are subject to change.</p><div>

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




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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Prospective investors should
consult their professional advisers on the possible tax consequences of buying, holding or selling any shares under the laws of their
country of citizenship, residence or domicile.</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>Cayman Islands Taxation</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: 36pt">The following is a discussion
on certain Cayman Islands income tax consequences of an investment in the Shares. The discussion is a general summary of the present law,
which is subject to prospective and retroactive change. It is not intended as tax advice, does not consider any investor&#8217;s particular
circumstances, and does not consider tax consequences other than those arising under Cayman Islands 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: justify"><b><i>Under Existing Cayman Islands Laws</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: 36pt">The Cayman Islands currently
levies no taxes in on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature
of inheritance tax or estate duty. There are no other taxes levied by the Government of the Cayman Islands that are likely to be material
to holders of ordinary shares except for stamp duties which may be applicable on instruments executed in, or brought within the jurisdiction
of the Cayman Islands. The Cayman Islands is not party to any double tax treaties. There are no exchange control regulations or currency
restrictions in the Cayman Islands.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Pursuant to Section 6 of the
Tax Concessions Act (Revised) of the Cayman Islands, the Company has obtained an undertaking from the Financial Secretary of the Cayman
Islands:</p><div>

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

</div><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">(a)</td>
    <td style="text-align: justify">that no Law which is hereafter enacted in the Islands imposing any tax to be levied on profits, income, gains or appreciations shall apply to us or our operations; and</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: 48px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">(b)</td>
    <td style="text-align: justify">in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax shall be payable:</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: 72px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">(i)</td>
    <td style="text-align: justify">on or in respect of the shares, debentures or other obligations of our company; or</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: 72px; text-align: justify">&#160;</td>
    <td style="width: 24px; text-align: justify">(ii)</td>
    <td style="text-align: justify">by way of the withholding in whole or part, of any relevant payment as defined in Section 6(3) of the Tax Concessions Law (2018 Revision).</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: 36pt">These concessions shall be
for a period of 20 years from March 22, 2018.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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>People&#8217;s Republic of China Taxation</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: 36pt">Under the Enterprise Income
Tax Law, an enterprise established outside the PRC with a &#8220;de facto management body&#8221; within the PRC is considered a PRC resident
enterprise for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide
income as well as tax reporting obligations. Under the Implementation Rules, a &#8220;de facto management body&#8221; is defined as a
body that has material and overall management and control over the manufacturing and business operations, personnel and human resources,
finances and properties of an enterprise</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">In addition, SAT Circular 82,
which was issued in April 2009 and partially abolished on December 29, 2017, specifies that certain offshore-incorporated enterprises
controlled by PRC enterprises or PRC enterprise groups will be classified as non-domestically-registered resident enterprises if all of
the following conditions are met: (a) senior management personnel and core management departments in charge of the daily operations of
the enterprises have their presence mainly in the PRC; (b) their financial and human resources decisions are subject to determination
or approval by persons or bodies in the PRC; (c) major assets, accounting books and company seals of the enterprises, and minutes and
files of their board&#8217;s and shareholders&#8217; meetings are located or kept in the PRC; and (d) half or more of the enterprises&#8217;
directors or senior management personnel with voting rights habitually reside in the PRC. Further to SAT Circular 82, the SAT issued Announcement
of the State Administration of Taxation on Printing and Distributing the Administrative Measures for Income Tax on Chinese-controlled
Resident Enterprises Incorporated Overseas (Trial Implementation) (the &#8220;SAT Bulletin 45&#8221;) on July 27, 2011, which took effect
on September 1, 2011 and was last amended on June 15, 2018, to provide more guidance on the implementation of SAT Circular 82. SAT Bulletin
45 provides for procedures and administration details of determination on PRC resident enterprise status and administration on post-determination
matters. If the PRC tax authorities determine that the Company is a PRC resident enterprise for PRC enterprise income tax purposes, a
number of unfavorable PRC tax consequences could follow. For example, the Company may be subject to enterprise income tax at a rate of
25% with respect to its worldwide taxable income. Also, a 10% withholding tax would be imposed on dividends we pay to our non-PRC enterprise
shareholders and with respect to gains derived by our non-PRC enterprise shareholders from transferring our shares or ordinary shares
and potentially a 20% of withholding tax would be imposed on dividends we pay to our non-PRC individual shareholders and with respect
to gains derived by our non-PRC individual shareholders from transferring our shares or ordinary shares.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">It is unclear whether, if
we are considered a PRC resident enterprise, holders of our shares or ordinary shares would be able to claim the benefit of income tax
treaties or agreements entered into between China and other countries or areas. See &#8220;3.D. Risk Factors &#8212; Risk Factors Related
to Doing Business in China &#8212; If we are classified as a PRC resident enterprise for PRC purposes, such classification could result
in unfavorable tax consequences to us and our non-PRC shareholders.&#8221;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The SAT and the MOF issued
the Notice of Ministry of Finance and State Administration of Taxation on Several Issues relating to Treatment of Corporate Income Tax
Pertaining to Restructured Business Operations of Enterprises (the &#8220;SAT Circular 59&#8221;) in April 2009, which became effective
on January 1, 2008 and was amended on December 25, 2014 and became effective from January 1, 2014. On October 17, 2017, the SAT issued
the Announcement of the State Administration of Taxation on Issues Relating to Withholding at Source of Income Tax of Non-resident Enterprises,
which became effective on December 1, 2017 and was amended on June 15, 2018 (the &#8220;SAT Circular 37&#8221;). By promulgating and implementing
the SAT Circular 59 and the SAT Circular 37, the PRC tax authorities have enhanced their scrutiny over the direct or indirect transfer
of equity interests in a PRC resident enterprise by a non-PRC resident enterprise.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the Arrangement
between the Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income,
or the Tax Arrangement, where a Hong Kong resident enterprise which is considered a non-PRC tax resident enterprise directly holds at
least 25% of a PRC enterprise, the withholding tax rate in respect of the payment of dividends by such PRC enterprise to such Hong Kong
resident enterprise is reduced to 5% from a standard rate of 10%, subject to approval of the PRC local tax authority.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><span style="font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the Circular of
the State Administration of Taxation on the Issues concerning the Application of the Dividend Clauses of Tax Agreements (&#8220;Circular
81&#8221;), a resident enterprise of the counter-party to such Tax Arrangement should meet the following conditions, among others, in
order to enjoy the reduced withholding tax under the Tax Arrangement: (i) it must directly own the required percentage of equity interests
and voting rights in such PRC resident enterprise; and (ii) it should directly own such percentage in the PRC resident enterprise anytime
in the 12 months prior to receiving the dividends. Furthermore, pursuant to the Announcement of the State Taxation Administration on Promulgation
of the Administrative Measures on Entitlement of Non-resident Taxpayers to Tax Treaty Benefits (or Circular 35) which was issued on October
14, 2019 and became effective from January 1, 2020, non-resident taxpayers claiming tax treaty benefits shall adopt the method of &#8220;making
independent judgement, declaring claims and retaining the relevant materials for future inspection&#8221;. Where a non-resident taxpayer
deems that it satisfies the criteria for entitlement to tax treaty benefits, it may, at the time of filing tax return or making withholding
declaration through a withholding agent, enjoy tax treaty benefits, and simultaneously compile and retain the relevant materials pursuant
to the provisions of this circular for future inspection, and be subject to follow-up administration by the tax authorities. There are
also other conditions to qualify for such a reduced withholding tax rate according to other relevant tax rules and regulations. Accordingly,
MingZhu HK may be able to enjoy the 5% withholding tax rate for the dividends it receives from the wholly foreign-owned enterprises, if
it satisfies the conditions prescribed under Circular 81 and other relevant tax rules and regulations, and obtains the approvals as required
under the Administrative Measures. However, according to Circular 81, if the relevant tax authorities consider the transactions or arrangements
we have are for the primary purpose of enjoying a favorable tax treatment, the relevant tax authorities may adjust the favorable withholding
tax in the future.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Material United States Federal Income Tax Considerations</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following is a discussion
of certain material United States federal income tax considerations relating to the acquisition, ownership, and disposition of our units,
ordinary shares and warrants by a U.S. Holder, as defined below. For U.S. federal income tax purposes, the holder of a unit generally
should be treated as the owner of the underlying ordinary share and warrant components of the unit, as the case may be. As a result,
the discussion below with respect to actual holders of ordinary shares and warrants should also apply to holders of units (as the deemed
owners of the underlying ordinary shares and warrants that comprise the units). This discussion applies only to securities that are held
as capital assets for U.S. federal income tax purposes, is applicable only to holders who purchased units in this offering and assumes
any distributions on our ordinary shares will be paid in U.S. dollars. This discussion is based on existing United States federal income
tax law, which is subject to differing interpretations or change, possibly with retroactive effect. No ruling has been sought from the
Internal Revenue Service (the &#8220;IRS&#8221;) with respect to any United States federal income tax consequences described below, and
there can be no assurance that the IRS or a court will not take a contrary position. This discussion does not address all aspects of
United States federal income taxation that may be important to particular investors in light of their individual circumstances, including
investors subject to special tax rules (such as, for example, certain financial institutions, insurance companies, regulated investment
companies, real estate investment trusts, broker-dealers, traders in securities that elect mark-to-market treatment, partnerships (or
other entities treated as partnerships for United States federal income tax purposes) and their partners, tax-exempt organizations (including
private foundations)), investors who are not U.S. Holders, investors that own (directly, indirectly, or constructively) 5% or more of
our voting shares, investors that hold their ordinary shares as part of a straddle, hedge, conversion, constructive sale or other integrated
transaction), or investors that have a functional currency other than the U.S. dollar, all of whom may be subject to tax rules that differ
significantly from those summarized below. In addition, this discussion does not address any tax laws other than the United States federal
income tax laws, including any state, local, alternative minimum tax or non-United States tax considerations, or the Medicare tax on
unearned income. Each potential investor is urged to consult its tax advisor regarding the United States federal, state, local and non-United
States income and other tax considerations of an investment in our ordinary shares.&#160;</p><div>

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


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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>General</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">For purposes of this discussion,
a &#8220;U.S. Holder&#8221; is a beneficial owner of our ordinary shares that is, for United States federal income tax purposes, (i) an
individual who is a citizen or resident of the United States, (ii) a corporation (or other entity treated as a corporation for United
States federal income tax purposes) created in, or organized under the laws of, the United States or any state thereof or the District
of Columbia, (iii) an estate the income of which is includible in gross income for United States federal income tax purposes regardless
of its source, or (iv) a trust (A) the administration of which is subject to the primary supervision of a United States court and which
has one or more United States persons who have the authority to control all substantial decisions of the trust or (B) that has otherwise
elected to be treated as a United States person under the Code.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; 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 a partnership (or other
entity treated as a partnership for United States federal income tax purposes) is a beneficial owner of our ordinary shares, the tax treatment
of a partner in the partnership will depend upon the status of the partner and the activities of the partnership. Partnerships and partners
of a partnership holding our ordinary shares are urged to consult their tax advisors regarding an investment in our ordinary shares.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; 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 set forth below
is addressed only to U.S. Holders that purchase ordinary shares in this offering. Prospective purchasers are urged to consult their own
tax advisors about the application of U.S. federal income tax law to their particular circumstances as well as the state, local, foreign
and other tax consequences to them of the purchase, ownership and disposition of our ordinary shares.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Allocation of Purchase
Price and Characterization of a Unit</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">No statutory, administrative
or judicial authority directly addresses the treatment of a unit or instruments similar to a unit for U.S. federal income tax purposes
and, therefore, that treatment is not entirely clear. The acquisition of a unit should be treated for U.S. federal income tax purposes
as the acquisition of one ordinary share and one warrant to acquire one ordinary share. For U.S.&#160;federal income tax purposes, each
holder of a unit must allocate the purchase price paid by such holder for such unit between the one ordinary share and the warrant based
on the relative fair market value of each at the time of purchase. Under U.S. federal income tax law, each investor must make his or her
own determination of such value based on all the relevant facts and circumstances. Therefore, we strongly urge each investor to consult
his or her tax adviser regarding the determination of value for these purposes. The price allocated to each ordinary share and the warrant
should be the shareholder&#8217;s tax basis in such share or warrant, as the case may be. Any disposition of a unit should be treated
for U.S. federal income tax purposes as a disposition of the ordinary share and the warrant comprising the unit, and the amount realized
on the disposition should be allocated between the ordinary share and warrant based on their respective relative fair market values at
the time of disposition (as determined by each such unit holder based on all relevant facts and circumstances). The separation of the
ordinary share and the warrant comprising a unit should not be a taxable event 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">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The foregoing treatment of
the ordinary shares and warrants and a holder&#8217;s purchase price allocation are not binding on the IRS or the courts. Because there
are no authorities that directly address instruments that are similar to the units, no assurance can be given that the IRS or the courts
will agree with the characterization described above or the discussion below. Accordingly, each prospective investor is urged to consult
its own tax advisors regarding tax consequences of an investment in a unit (including alternative characterizations of a unit). The balance
of this discussion assumes that the characterization of the units described above is respected 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">&#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>Taxation of Dividends
and Other Distributions on our Ordinary 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">Subject to the passive foreign
investment company rules discussed below, distributions of cash or other property made by us to you with respect to the ordinary shares
(including the amount of any taxes withheld therefrom) will generally be includable in your gross income as dividend income on the date
of receipt by you, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined
under U.S. federal income tax principles). With respect to corporate U.S. Holders, the dividends will not be eligible for the dividends-received
deduction allowed to corporations in respect of dividends received from other U.S. corporations.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; 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">&#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, provided that (1) the ordinary shares are readily tradable on an established securities market in the United States, or we are
eligible for the benefits of an approved qualifying income tax treaty with the United States that includes an exchange of information
program, (2) we are not a passive foreign investment company (as discussed below) for either our taxable year in which the dividend is
paid or the preceding taxable year, and (3) certain holding period requirements are met. You are urged to consult your tax advisors regarding
the availability of the lower rate for dividends paid with respect to our ordinary shares, including the effects of any change in law
after the date of this 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">To the extent that the amount
of the distribution exceeds our current and accumulated earnings and profits (as determined under U.S. federal income tax principles),
it will be treated first as a tax-free return of your tax basis in your ordinary shares, and to the extent the amount of the distribution
exceeds your tax basis, the excess will be taxed as capital gain. We do not intend to calculate our earnings and profits under U.S. federal
income tax principles. Therefore, a U.S. Holder should expect that a distribution will be treated as a dividend even if that distribution
would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Taxation of Dispositions
of Ordinary 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">Subject to the passive foreign
investment company rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of
a share equal to the difference between the amount realized (in U.S. dollars) for the share and your tax basis (in U.S. dollars) in the
ordinary shares. The gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder, including an individual U.S. Holder,
who has held the ordinary shares for more than one year, you may be eligible for reduced tax rates on any such capital gains. The deductibility
of capital losses is subject to limitations.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><b><i>Exercise, Lapse or Redemption
of a Warrant</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">Subject to the PFIC rules
discussed below and except as discussed below with respect to the cashless exercise of a warrant, a U.S. holder generally will not recognize
gain or loss on the exercise of a warrant. A U.S. holder&#8217;s tax basis in an ordinary share received upon exercise of the warrant
generally will be an amount equal to the sum of the U.S. holder&#8217;s initial investment in the warrant (which will equal the portion
of the U.S. holder&#8217;s purchase price for the units that is allocated to the warrant, as described above) and the exercise price of
such warrant. The U.S. holder&#8217;s holding period for an ordinary share received upon exercise of the warrant will begin on the date
following the date of exercise (or possibly the date of exercise) of the warrants and will not include the period during which the U.S.
holder held the warrants. If a warrant is allowed to lapse unexercised, a U.S. holder generally will recognize a capital loss equal to
such holder&#8217;s tax basis in the warrant.</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 tax consequences of a
cashless exercise of a warrant are not clear under current law. A cashless exercise may not be taxable, either because the exercise is
not a realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. In either situation,
a U.S. holder&#8217;s tax basis in the ordinary shares received generally will equal the U.S. holder&#8217;s tax basis in the warrant.
If the cashless exercise was not a realization event, it is unclear whether a U.S. holder&#8217;s holding period for the ordinary shares
acquired pursuant to the exercise of such warrant will commence on the date of exercise of the warrant or the day following the date of
exercise of the warrant. If the cashless exercise were treated as a recapitalization, the holding period of the ordinary shares will generally
include the holding period of the warrant. It is also possible that a cashless exercise may be treated as a taxable exchange in which
gain or loss would be recognized because a U.S. holder may be deemed to have surrendered a portion of its warrants in a taxable transaction
to pay the exercise price for the balance of its warrants that are treated as exercised for U.S. federal income tax purposes. In such
event, a U.S. holder would recognize capital gain or loss in an amount equal to the difference between the exercise price for the total
number of warrants treated as exercised and the U.S. holder&#8217;s tax basis in the warrants deemed surrendered. In this case, a U.S.
holder&#8217;s tax basis in the ordinary shares received would equal the U.S. holder&#8217;s tax basis in the warrants treated as exercised
plus the exercise price of such warrants. It is unclear whether a U.S. holder&#8217;s holding period for the ordinary shares would commence
on the date of exercise of the warrants or the day following the date of exercise of the warrants.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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">Due to the absence of authority
on the U.S. federal income tax treatment of a cashless exercise, there can be no assurance which, if any, of the alternative tax consequences
and holding periods described above would be adopted by the IRS or a court of law. Accordingly, U.S. holders should consult their tax
advisors regarding the tax consequences of a cashless exercise.</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 PFIC rules
described below, if we redeem warrants for cash or if we purchase warrants in an open market transaction, such redemption or purchase
generally will be treated as a taxable disposition to the U.S. holder.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; 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">&#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>Possible Constructive
Distributions</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 terms of each warrant
provide for an adjustment to the number of ordinary shares for which the warrant may be exercised or to the exercise price of the warrant
in certain events. An adjustment which has the effect of preventing dilution generally is not taxable. The U.S. holders of the warrants
would, however, be treated as receiving a constructive distribution from us if, for example, the adjustment increases the warrant holders&#8217;
proportionate interest in our assets or earnings and profits (e.g., through an increase in the number of ordinary shares that would be
obtained upon exercise) as a result of a distribution of cash to the holders of our ordinary shares which is taxable to the U.S. holders
of such ordinary shares as described under &#8220;&#8212;&#160;Taxation of Dividends and Other Distributions&#8221; above. Such constructive
distribution would be subject to tax as described under that section in the same manner as if the U.S. holders of the warrants received
a cash distribution from us equal to the fair market value of such increased interest. For certain information reporting purposes, we
are required to determine the date and amount of any such constructive distributions. Proposed Treasury regulations, which we may rely
on prior to the issuance of final regulations, specify how the date and amount of constructive distributions are determined.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 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"><b><i>Passive Foreign Investment
Company (&#8220;PFIC&#8221;)</i></b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If we are a PFIC for your
taxable year(s) during which you hold ordinary shares, you will be subject to special tax rules with respect to any &#8220;excess distribution&#8221;
that you receive and any gain you realize from a sale or other disposition (including a pledge) of the ordinary shares, unless you make
a &#8220;mark-to-market&#8221; election as discussed below. Distributions you receive in a taxable year that are greater than 125% of
the average annual distributions you received during the shorter of the three preceding taxable years or your holding period for the ordinary
shares will be treated as an excess distribution. Under these special tax rules:</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify; font-size: 10pt">&#160;</td>
    <td style="width: 0.25in; text-align: justify; font-size: 10pt">&#9679;</td>
    <td style="text-align: justify; font-size: 10pt">the excess distribution or gain will be allocated ratably over your holding period for the ordinary shares;</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify">&#9679;</td>
    <td style="text-align: justify">the amount allocated to your current taxable year, and any amount allocated to any of your taxable year(s) prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify">&#9679;</td>
    <td style="text-align: justify">the amount allocated to each of your other taxable year(s) will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.</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">The tax liability for amounts
allocated to years prior to the year of disposition or &#8220;excess distribution&#8221; cannot be offset by any net operating losses
for such years, and gains (but not losses) realized on the sale of the ordinary shares cannot be treated as capital, even if you hold
the ordinary shares as capital assets.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; 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 first taxable year during which you hold (or are deemed to hold) ordinary shares
and for which we are determined to be a PFIC, you will include in your income each year an amount equal to the excess, if any, of the
fair market value of the ordinary shares as of the close of such taxable year over your adjusted basis in such ordinary shares, which
excess will be treated as ordinary income and not capital gain. You are allowed an ordinary loss for the excess, if any, of the adjusted
basis of the ordinary shares over their fair market value as of the close of the taxable year. However, such ordinary loss is allowable
only to the extent of any net mark-to-market gains on the ordinary shares included in your income for prior taxable years. Amounts included
in your income under a mark-to-market election, as well as gain on the actual sale or other disposition of the ordinary shares, are treated
as ordinary income. Ordinary loss treatment also applies to any loss realized on the actual sale or disposition of the ordinary shares,
to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such ordinary shares.
Your basis in the ordinary shares will be adjusted to reflect any such income or loss amounts. If you make a valid mark-to-market election,
the tax rules that apply to distributions by corporations which are not PFICs would apply to distributions by us, except that the lower
applicable capital gains rate for qualified dividend income discussed above under &#8220;&#8212; Taxation of Dividends and Other Distributions
on our Ordinary Shares&#8221; generally would not apply.</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 de minimis quantities on at least 15
days during each calendar quarter (&#8220;regularly traded&#8221;) on a qualified exchange or other market (as defined in applicable
U.S. Treasury regulations), including Nasdaq. If the ordinary shares are regularly traded on Nasdaq and if you are a holder of ordinary
shares, the mark-to-market election would be available to you were we to be or become a PFIC.</p><div>

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


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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">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 ordinary shares in any taxable year in which we are a PFIC, you
will be required to file IRS Form 8621 in each such year and provide certain annual information regarding such ordinary shares, including
regarding distributions received on the ordinary shares and any gain realized on the disposition of the ordinary shares. In addition,
a U.S. holder may not make a &#8220;qualified electing fund&#8221; election with respect to its warrants to acquire our ordinary shares.
As a result, if a U.S. holder sells or otherwise disposes of such warrants (other than upon exercise of such warrants), any gain recognized
generally will be subject to the special tax and interest charge rules treating the gain as an excess distribution, if we were a PFIC
at any time during the period the U.S. holder held the warrants.</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 you do not make a timely
&#8220;mark-to-market&#8221; election (as described above), and if we were a PFIC at any time during the period you hold our ordinary
shares, then such ordinary shares will continue to be treated as stock of a PFIC with respect to you even if we cease to be a PFIC in
a future year, unless you make a &#8220;purging election&#8221; for the year we cease to be a PFIC. A &#8220;purging election&#8221; creates
a deemed sale of such ordinary shares at their fair market value on the last day of the last year in which we are treated as a PFIC. The
gain recognized by the purging election will be subject to the special tax and interest charge rules treating the gain as an excess distribution,
as described above. As a result of the purging election, you will have a new basis (equal to the fair market value of the ordinary shares
on the last day of the last year in which we are treated as a PFIC) and holding period (which new holding period will begin the day after
such last day) in your ordinary shares for tax purposes.</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; 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 ordinary shares and the elections discussed above.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b><i>Information Reporting and Backup Withholding</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 payments with respect
to our ordinary shares and proceeds from the sale, exchange or redemption of our ordinary shares may be subject to information reporting
to the IRS and possible U.S. backup withholding. 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 IRS 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 IRS 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
IRS and furnishing any required information. We do not intend to withhold taxes for individual shareholders. However, transactions effected
through certain brokers or other intermediaries may be subject to withholding taxes (including backup withholding), and such brokers or
intermediaries may be required by law to withhold such taxes.</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 Hiring Incentives
to Restore Employment Act of 2010, certain U.S. Holders are required to report information relating to our ordinary shares, subject to
certain exceptions (including an exception for ordinary shares held in accounts maintained by certain financial institutions), by attaching
a completed IRS Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which they hold ordinary
shares.</p><div>

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

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

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

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

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>10.H. Documents on Display</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 previously filed with
the SEC our registration statements on Form F-1 (File Number 333-253950) and Form 20-F for the fiscal year ended December 31, 2020.</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 are subject to the periodic
reporting and other informational requirements of the Exchange Act. Under the Exchange Act, we are required to file reports and other
information with the SEC. Specifically, we are required to file annually a Form 20-F within four months after the end of each fiscal year.
Copies of reports and other information, when so filed, may be inspected without charge and may be obtained at prescribed rates at the
public reference facilities maintained by the SEC at Judiciary Plaza, 100 F Street, N.E., Washington, D.C. 20549. The public may obtain
information regarding the Washington, D.C. Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a web site
at http://www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants that make electronic
filings with the SEC using its EDGAR system. As a foreign private issuer, we are exempt from the rules of the Exchange Act prescribing,
among other things, the furnishing and content of proxy statements to shareholders, and our executive officers, directors and principal
shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.</p><div>

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

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

</div><div><a id="a_013"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Financial instruments that
expose us to concentrations of credit risk primarily consist of cash and accounts receivables. The maximum amount of loss due to credit
risk in the event of other parties failing to perform their obligations is represented by the carrying amount of each financial asset
as stated in our consolidated balance sheets.</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 are exposed to various
types of market risks, including changes in foreign exchange rates, commodity prices and inflation in the normal course of 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; text-indent: 0.5in"><i>Interest rate risk</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">Our market risk is affected
by changes in interest rates. Historically, we have used a combination of fixed rate and variable rate obligations to manage our interest
rate exposure. Fixed rate obligations expose us to the risk that interest rates might fall. Variable rate obligations expose us to the
risk that interest rates might rise. We currently do not have any interest rate swaps although we may enter into such swaps in the 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-align: justify; text-indent: 0.5in">We are exposed to variable
interest rate risk principally from our existing term loan facility and our existing revolving credit facility. We are exposed to fixed
interest rate risk principally from equipment notes and mortgages. As of December 31, 2022, we had bank borrowings totaling $10,862,622
comprised of $10,862,622 variable rate borrowings and $nil fixed rate borrowings. <span>As of December
31, 2021, we had bank borrowings totaling $8,866,082 comprised of $8,866,082 variable rate borrowings and $nil fixed rate borrowings.
</span>Accordingly, holding other variables constant (including borrowing levels), the Group&#8217;s interest rate risk is mainly concentrated
on the fluctuation of interest rates quoted by The People&#8217;s Bank of China arising from the Company&#8217;s RMB denominated bank
borrowings. If interest rates had been one percentage point higher/lower and all other variables were held constant, our profit for the
year ended December 31, 2022, 2021 and 2020 would decrease/increase by approximately $90,000, $18,000 and $18,000, respectively. Management
believes that the influence of such change has no material impact on the Company&#8217;s consolidated 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>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>Foreign exchange risk</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">While our reporting currency
is the U.S. dollar, almost all of our consolidated revenues and consolidated costs and expenses are denominated in RMB. Most of our assets
are denominated in RMB. As a result, we are exposed to foreign exchange risk as our revenues and results of operations may be affected
by fluctuations in the exchange rate between the U.S. dollar and RMB. If the RMB depreciates against the U.S. dollar, the value of our
RMB revenues, earnings and assets as expressed in our U.S. dollar financial statements will decline. We have not entered into any hedging
transactions in an effort to reduce our exposure to foreign exchange risk.</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>Liquidity Risk</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">We are also exposed to liquidity
risk which is the risk that we will be unable to provide sufficient capital resources and liquidity to meet our commitments and business
needs. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, we will
turn to other financial institutions and related parties to obtain short-term funding to cover any liquidity shortage.</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>Credit Risk</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">Credit risk is controlled
by the application of credit approvals, limits and monitoring procedures. We manage credit risk through in-house research and analysis
of the Chinese economy and the underlying obligors and transaction structures. We identify credit risk collectively based on industry,
geography and customer type. In measuring the credit risk of our sales to our customers, we mainly reflect the &#8220;probability of default&#8221;
by the customer on its contractual obligations and consider the current financial position of the customer and the current and likely
future exposures to the customer.</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>Other risks</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">In addition to the risks described
above, in December 2019, a strain of coronavirus (also known as COVID- 19) was reported to have surfaced in Wuhan, Hubei Province, China.
At this point, the extent to which the coronavirus may impact our results is uncertain. However, any outbreak of a contagious disease,
or other adverse public health developments, could have a material adverse effect on our business operations by disrupting our ability
to purchase raw materials, impacting the demand for some of our products, disrupting our ability to sell and/or distribute products, and/or
temporarily closing our facilities or the facilities of our suppliers or customers and their contract manufacturers, or restricting our
ability to travel to support our sites or our customers around the world, any of which would likely impact our sales 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><div><a id="a_014"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><b>ITEM
12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES</b></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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

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

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


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

</div><div><a id="a_016"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><b>ITEM
13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES</b></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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

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

</div><div><a id="a_017"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><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-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 October 21, 2020, the Company
completed its IPO of 3,000,000 ordinary shares at a public offering price of US$4.00 per share.</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 October 30, 2020, the underwriter
and sole book-runner of the Company&#8217;s underwritten IPO, exercised the partial over-allotment option and purchased an additional
350,000 ordinary shares of the Company at the IPO price of US$4.00 per share.</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 December 4, 2020, the underwriter
and sole book-runner of the Company&#8217;s underwritten IPO, further exercised the partial over-allotment option and purchased an additional
4,040 ordinary shares of the Company at the IPO price of US$4.00 per share.</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 the above IPO and over-allotments,
the Company received total net proceeds of $10,958,803 after deducting underwriting commission and other expenses.</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 March 12, 2021, the Company
closed a direct public offering of 3,333,335 Units, with each Unit consisting of (i) one ordinary share of the Company, par value $0.001
per share, and (ii) one warrant to purchase 0.75 ordinary share. The Company sold the Units at a price of $6.00 per Unit. The Company
received gross proceeds from the Offering, before deducting estimated offering expenses payable by the Company, of approximately $18,000,000.</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">On April 21, 2021, the underwriter
and sole book-runner of our underwritten IPO, exercised its partial warrant and purchased a total of 214,286 ordinary shares of the Company
with no cash in consideration.</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 June 14, 2021, the underwriter
and sole book-runner of our underwritten IPO, exercised its partial warrant and purchased a total of 43,616 ordinary shares of the Company
with no cash in consideration.</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 used the net proceeds
from such offerings in the manner as disclosed in our registration statement on Form&#160;F-1 (File Number 333-253950).</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 December 31, 2021, we acquired
100% shares outstanding of the Cheyi BVI, and we issued 3,189,000 ordinary shares and paid $2,000,000 to the sellers.</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 March 18, 2022, we acquired
100% shares outstanding of the Yinhua, and we issued 3,826,000 ordinary shares and paid $1,000,000 to the sellers.</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 December 21, 2022, we acquired
100% shares outstanding of the Feipeng BVI, and we paid $9,550,000 to the sellers.</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 22,960,277
ordinary shares outstanding as of the date of this annual report.</p><div>

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

</div><div><a id="a_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">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify">(a)</td>
    <td style="text-align: justify"><i>Disclosure Controls and Procedures</i></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">Our management, with the participation
of our chief executive officer and chief financial officer, has performed an evaluation of the effectiveness of our disclosure controls
and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report, as required by
Rule 13a-15(b) under the Exchange Act.]</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 upon that evaluation,
our management has concluded that, due to the outstanding material weakness described below, as of December 31, 2022, our disclosure controls
and procedures were not effective in ensuring that the information required to be disclosed by us in the reports that we file and furnish
under the Exchange Act was recorded, processed, summarized and reported, within the time periods specified in the SEC&#8217;s rules and
forms, and that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated
and communicated to our management, including our chief executive officer and chief financial officer, to allow timely decisions regarding
required disclosure.</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify">(b)</td>
    <td style="text-align: justify"><i>Management&#8217;s Report on Internal Control Over Financial Reporting</i></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">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 Exchange Act of 1934, as amended. Our internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance
with Generally Accepted Accounting Principles (GAAP) in the United States of America and includes those policies and procedures that</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in; text-align: justify">(1)</td>
    <td style="text-align: justify">pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company;</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in; text-align: justify">(2)</td>
    <td style="text-align: justify">provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with GAAP, and that receipts and expenditures of our company are being made only in accordance with authorizations of our management and directors; and</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in; text-align: justify">(3)</td>
    <td style="text-align: justify">provide reasonable assurance regarding prevention or timely detection of the unauthorized acquisition, use or disposition of our company&#8217;s assets that could have a material effect on the consolidated financial statements.</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">This annual report does not
include a report of management&#8217;s assessment regarding internal control over financial reporting or an attestation report by our
independent registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify">(c)</td>
    <td style="text-align: justify"><i>Attestation Report of Independent Registered Public Accounting Firm</i></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">As a company with less than
US$1.07 billion in revenue for our last fiscal year, we qualify as an &#8220;emerging growth company&#8221; pursuant to the JOBS Act,
and are eligible to take advantage of certain exemptions from various reporting and financial disclosure requirements that are applicable
to other public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley
Act of 2002, related to the assessment of the effectiveness of the emerging growth company&#8217;s internal control over financial reporting.]</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify">(d)</td>
    <td style="text-align: justify">Changes in Internal Control over Financial Reporting</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 connection with the audits
of our consolidated financial statements included in this annual report, we and our independent registered public accounting firm identified
one &#8220;material weakness&#8221; in our internal control over financial reporting, as defined in the standards established by the PCAOB,
and other control deficiencies. A &#8220;material weakness&#8221; is a deficiency, or a combination of deficiencies, in internal control
over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial
statements will not be prevented or detected on a timely basis.</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 material weakness identified
relates to our lack of sufficient skilled staff with U.S. GAAP and SEC reporting knowledge for the purpose of financial reporting as well
as the lack of formal accounting policies and procedures manual to ensure proper financial reporting in accordance with U.S. GAAP and
SEC reporting requirements.</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 the material weakness
described above, our management has concluded that we had not maintain effective internal control over financial reporting as of December
31, 2021, based on criteria established in Internal Control &#8212; Integrated Framework (2013) issued by COSO.</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify">(e)</td>
    <td style="text-align: justify">Remediation Initiatives</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">To remedy our identified material
weakness in connection with preparation of our consolidated financial statements, we plan to adopt several measures to improve our internal
control over financial reporting, including (i) hiring additional accounting personnel with experience in U.S. GAAP and SEC reporting
requirements, and (ii) providing more regular training on an ongoing basis to our accounting personnel that cover a broad range of accounting
and financial reporting topics.</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">Other than as described above,
no changes in our internal controls over financial reporting occurred during the period covered by this annual report that have materially
affected, or are reasonably likely to materially affect, our internal controls over financial reporting.</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 management has worked,
and will continue to work to strengthen our internal controls over financial reporting. There were no other changes in our internal control
over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting.</p><div>

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

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


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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Mikael Charette, Yuzhou Wang
and To Wai Suen serve as members of our Audit Committee. Mr. Suen serves as the chair of the Audit Committee. Each of our Audit Committee
members satisfy the &#8220;independence&#8221; requirements of the Nasdaq listing rules and meet the independence standards under Rule
10A-3 under the Exchange Act. We have determined that Mr. Suen possesses accounting or related financial management experience that qualifies
her as an &#8220;audit committee financial expert&#8221; as defined by the rules and regulations of the SEC. Our Audit Committee oversees
our accounting and financial reporting processes and the audits of our financial statements. Our Audit Committee performs several functions,
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">
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    <td style="width: 0.25in; text-align: justify">&#9679;</td>
    <td style="text-align: justify">evaluating the independence and performance of, and assesses the qualifications of, our independent auditor, and engages such independent auditor;</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
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    <td style="width: 0.25in; text-align: justify">&#9679;</td>
    <td style="text-align: justify">approving the plan and fees for the annual audit, quarterly reviews, tax and other audit-related services, and approves in advance any non-audit service to be provided by the independent auditor;</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%; border-collapse: collapse">
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify">&#9679;</td>
    <td style="text-align: justify">reviewing the financial statements to be included in our Annual Report on Form 20-F and Current Reports on Form 6-K and reviews with management and the independent auditors the results of the annual audit and reviews of our quarterly financial statements;</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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    <td style="text-align: justify">overseeing all aspects of our systems of internal accounting control and corporate governance functions on behalf of the board;</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%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
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    <td style="text-align: justify">reviewing and approving in advance any proposed related-party transactions and report to the full Board on any approved transactions; and</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%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in; text-align: justify">&#160;</td>
    <td style="width: 0.25in; text-align: justify">&#9679;</td>
    <td style="text-align: justify">providing oversight assistance in connection with legal, ethical and risk management compliance programs established by management and our board of directors, including Sarbanes-Oxley Act implementation, and makes recommendations to our board of directors regarding corporate governance issues and policy decisions.</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><div><a id="a_021"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><b>ITEM
16B. CODE OF ETHICS</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">We have adopted a code of
ethics that applies to all of our executive officers, directors and employees in accordance with the rules of Nasdaq and the SEC. The
code of ethics codifies the business and ethical principles that govern all aspects of our business. We filed a copy of our Code of Ethics
as Exhibit 14 to our Registration Statement declared effective on March 9, 2021 (File Number 333-253950). You can review these documents
by accessing our public filings at the SEC&#8217;s website at <i>www.sec.gov.</i></p><div>

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

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


</div><!-- Field: Page; Sequence: 126; 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 -->123<!-- Field: /Sequence --></p></div><div>
    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
    </div><!-- Field: /Page --><div>

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

</div><div><a id="a_022"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><b>ITEM
16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES</b></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table sets forth
the aggregate fees by the categories specified below in connection with certain professional services rendered by our independent registered
public accounting firm, for the periods indicated. We did not pay any other fees to our auditors during the periods indicated below.</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="padding-bottom: 1.5pt; text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="padding-bottom: 1.5pt; font-weight: bold; text-align: center">For the Fiscal Years Ended</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="6" style="border-bottom: Black 1.5pt solid; padding-bottom: 1.5pt; font-weight: bold; text-align: center">December&#160;31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 76%; text-align: left">Audit Fees</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">140,000</td><td style="width: 1%; text-align: left">&#160;</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">113,000</td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Audit-Related Fees</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
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    <td style="text-align: left">Tax Fees</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt">All Other Fees</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></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="font-weight: bold; padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt">&#160;</td>
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  </table><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Audit fees represent the aggregate
fees billed for professional services rendered by our independent registered public accounting firms for the audit of our annual financial
statements and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements
for those fiscal years. We dismissed Friedman LLP on May 17, 2021 and we had appointed Audit Alliance LLP as successor auditor of the
Company on May 17, 2021 and for the fiscal years ended December 31, 2021 and 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">The policy of our audit committee
is to pre-approve all audit and non-audit services provided by our independent registered public accounting firms, including audit services
and audit-related services as described above, other than those for de minimis services which are approved by the Audit Committee prior
to the completion of the audit.</p><div>

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

</div><div><a id="a_023"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><b>ITEM
16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES</b></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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

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

</div><div><a id="a_024"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><b>ITEM
16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS</b></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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

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

</div><div><a id="a_025"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><b>ITEM
16F. CHANGE IN REGISTRANT&#8217;S CERTIFYING ACCOUNTANT</b></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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

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

</div><div><a id="a_026"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><b>ITEM
16G. CORPORATE GOVERNANCE</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 Cayman Islands company
listed on the Nasdaq Capital Market, we are subject to the Nasdaq Capital Market corporate governance listing standards. However, Nasdaq
Capital Market rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain
corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the Nasdaq Capital Market
corporate governance listing standards. We intend to follow the following home country practices in lieu of the Nasdaq Listing Rules as
follows:</p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in; text-align: justify">&#9679;</td>
    <td style="text-align: justify">Nasdaq Listing Rule 5605(b)(1) requires listed companies to have, among other things, a majority of its board members be independent. As a foreign private issuer, however, we are permitted to, and we may follow home country practice in lieu of the above requirements, or we may choose to comply with the above requirement within one year of listing. The corporate governance practice in our home country, the Cayman Islands, does not require a majority of our board to consist of independent directors. Currently, a majority of our board members are independent.</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">&#160;</td>
    <td style="width: 0.25in; text-align: justify">&#9679;</td>
    <td style="text-align: justify">We do not intend to follow Nasdaq&#8217;s requirements regarding shareholder approval for certain issuances of securities under Nasdaq Listing Rule 5635. Under our Memorandum and Articles of Association, our board of directors is authorized to issue securities including in connection with certain events such as the acquisition of shares or assets of another company, the establishment of or amendments to equity-based compensation plans for employees, a change of control of us, rights issues at or below market price, certain private placements and issuance of convertible notes, and the issuance of 20% or more of our outstanding ordinary shares.</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">Other than those described
above, there are no significant differences between our corporate governance practices and those followed by U.S. domestic companies under
Nasdaq Capital Market corporate governance listing standards. We may in the future decide to use the foreign private issuer exemption
with respect to some or all the other Nasdaq corporate governance rules. As a result, our shareholders may be afforded less protection
than they otherwise would under the Nasdaq corporate governance listing standards applicable to U.S. domestic issuers. We may utilize
these exemptions for as long as we continue to qualify as a foreign private issuer.</p><div>

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

</div><div><a id="a_027"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><b>ITEM
16H. MINE SAFETY DISCLOSURE</b></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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

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

</div><div><a id="a_028"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; 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">&#160;</p><div>

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

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

</div><div><a id="a_029"></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: justify">&#160;</p><div>

</div><div><a id="a_030"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><b>ITEM
17. FINANCIAL STATEMENTS</b></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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

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

</div><div><a id="a_031"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><b>ITEM
18. FINANCIAL STATEMENTS</b></p><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The consolidated financial
statements and related notes required by this item are contained on pages F-1 through F-43.</p><div>

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

</div><div><a id="a_032"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><b>ITEM
19. EXHIBITS</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: center"><b>EXHIBIT INDEX</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"></p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr>
    <td style="border-bottom: black 1.5pt solid; width: 9%; text-align: justify"><b>Exhibit No.</b></td>
    <td style="width: 1%; text-align: justify">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; vertical-align: bottom; width: 90%; text-align: justify"><b>Description of document</b></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; background-color: rgb(204,238,255)">
    <td style="text-align: justify">2.4**</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="f20f2022ex2-4_mingzhu.htm">Description of Securities</a></td></tr>
  <tr style="vertical-align: top; ">
    <td style="text-align: justify">3.1*</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1782037/000121390019019196/ff12019ex3-1_mingzhu.htm">Memorandum of Association of the Registrant (incorporated herein by reference to Exhibit 3.1 to the registration statement on Form F-1 (File No. 333-233992https://www.sec.gov/cgi-bin/browse-edgar?filenum=333-233992&amp;action=getcompany), as amended, initially filed with the SEC on September 27, 2019).</a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify">3.2*</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1782037/000121390019019196/ff12019ex3-2_mingzhu.htm">Articles
    of Association of the Registrant (incorporated herein by reference to Exhibit 3.2 to the registration statement on Form F-1 (File
    No. 333-233992https://www.sec.gov/cgi-bin/browse-edgar?filenum=333-233992&amp;action=getcompany), as amended, initially filed with
    the SEC on September 27, 2019).</a></td></tr>
  <tr style="vertical-align: top; ">
    <td style="text-align: justify">3.3*</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1782037/000121390020004166/ff12019a3ex3-3_mingzhul.htm">Amended and Restated Memorandum of Association of the Registrant (incorporated herein by reference to Exhibit 3.3 to the registration statement on Form F-1 (File No. 333-233992https://www.sec.gov/cgi-bin/browse-edgar?filenum=333-233992&amp;action=getcompany), as amended, initially filed with the SEC on September 27, 2019).</a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify">4.1*</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1782037/000121390019026465/ff12019a2ex4-1_mingzhu.htm">Form of Underwriters&#8217; Warrant (incorporated herein by reference to Exhibit 4.1 to the registration statement on Form F-1 (File No. 333-233992https://www.sec.gov/cgi-bin/browse-edgar?filenum=333-233992&amp;action=getcompany), as amended, initially filed with the SEC on September 27, 2019).</a></td></tr>
  <tr style="vertical-align: top; ">
    <td style="text-align: justify">4.2*</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1782037/000121390021013779/ea136499ex4-2_mingzhu.htm">Form of Investors Warrant filed as Exhibit 4.2 to the Registrant&#8217;s Form F-1 filed with the Commission on March 5, 2021 (File number 333-253950)</a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify">4.3*</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1782037/000121390021013779/ea136499ex4-3_mingzhu.htm">Form of Placement Agent&#8217;s Warrant. filed as Exhibit 4.3 to the Registrant&#8217;s Form F-1 filed with the Commission on March 5, 2021 (File number 333-253950)</a></td></tr>
  <tr style="vertical-align: top; ">
    <td style="text-align: justify">8.1**</td>
    <td style="text-align: justify">&#160;</td>
    <td style="text-align: justify"><a href="f20f2022ex8-1_mingzhu.htm">List of Subsidiaries of the Registrant</a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td>10.1*</td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1782037/000121390022013606/ea157091ex10-1_mingzhulog.htm">Share Purchase Agreement, dated as of March 14, 2022, by and among Mingzhu Logistic Holdings Limited, YINHUA (BVI) LIMITED and sellers named therein filed as Exhibit 10.1 to the Form 6-K filed with the SEC on March 18, 2022.</a></td></tr>
  <tr style="vertical-align: top; ">
    <td>10.2*</td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1782037/000121390022013606/ea157091ex10-2_mingzhulog.htm">Lock-up Agreement dated March 14, 2022 filed as Exhibit 10.2 to the Form 6-K filed with SEC on March 18, 2022.</a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td>10.3*</td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1782037/000121390022013606/ea157091ex10-3_mingzhulog.htm">Non-Competition and Non-Solicitation Agreement dated March 14, 2022 filed as Exhibit 10.3 to the Form 6-K filed with SEC on March 18, 2022.</a></td></tr>
  <tr style="vertical-align: top; ">
    <td>10.4*</td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1782037/000121390022082593/ea170801ex10-1_mingzhulog.htm">Share Purchase Agreement, dated as of December 21, 2022, by and among Mingzhu Logistic Holdings Limited, Feipeng Global Limited, and sellers named therein, filed as Exhibit 10.1 to the Form 6-K filed with SEC on December 23, 2022.</a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td>10.5*</td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1782037/000121390022082593/ea170801ex10-2_mingzhulog.htm">Non-Competition and Non-Solicitation Agreement dated December 21, 2022, filed as Exhibit 10.2 to the Form 6-K filed with SEC on December 23, 2022.</a></td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr>
    <td style="border-bottom: black 1.5pt solid; width: 9%"><b>Exhibit No.</b></td>
    <td style="width: 1%">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; vertical-align: bottom; width: 90%; text-align: justify"><b>Description of document</b></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td>10.6**</td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="f20f2022ex10-6_mingzhu.htm">Master Exclusive Service Agreement, dated December 20, 2022, by and between Xinjiang Feipeng Logistics Co., Ltd. &#160;and Shenzhen Feipeng Zongheng Supply Chain Management Co., Ltd.</a></td></tr>
  <tr style="vertical-align: top; ">
    <td>10.7**</td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="f20f2022ex10-7_mingzhu.htm">Business Cooperation Agreement, dated December 20, 2022, by and among Xinjiang Feipeng Logistics Co., Ltd., shareholders of Xinjiang Feipeng Logistics Co., Ltd., Shenzhen Feipeng Zongheng Supply Chain Management Co., Ltd. and Shareholders named therein.</a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td>10.8**</td>
    <td>&#160;</td>
    <td style="text-align: justify"> <a href="f20f2022ex10-8_mingzhu.htm">Equity Interest Pledge Agreement, dated December 20, 2022, by and between Xinjiang Feipeng Logistics Co., Ltd., Shenzhen Feipeng Zongheng Supply Chain Management Co., Ltd. and Pledgors named therein.</a></td></tr>
  <tr style="vertical-align: top; ">
    <td>10.9**</td>
    <td>&#160;</td>
    <td style="text-align: justify"> <a href="f20f2022ex10-9_mingzhu.htm">Exclusive Option Agreement, dated December 20, 2022, by and among Xinjiang Feipeng Logistics Co., Ltd., shareholders of Xinjiang Feipeng Logistics Co., Ltd. and Shenzhen Feipeng Zongheng Supply Chain Management Co., Ltd.</a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td>10.10**</td>
    <td>&#160;</td>
    <td style="text-align: justify"> <a href="f20f2022ex10-10_mingzhu.htm">Proxy Agreement, dated December 20, 2022, by and among Xinjiang Feipeng Logistics Co., Ltd., shareholders of Xinjiang Feipeng Logistics Co., Ltd. &#160;and Shenzhen Feipeng Zongheng Supply Chain Management Co., Ltd.</a></td></tr>
  <tr style="vertical-align: top; ">
    <td>10.11**</td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="f20f2022ex10-11_mingzhu.htm">Letter of Confirmation and Undertaking, dated December 20, 2022, by shareholders of Xinjiang Feipeng Logistics Co., Ltd.</a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td>10.12**</td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="f20f2022ex10-12_mingzhu.htm">Master Exclusive Service Agreement, dated January 22, 2022, by and between Hainan Zhisheng Automobile Services Co., Ltd. and Zhejiang Caiyunlian Technology Co., Ltd.</a></td></tr>
  <tr style="vertical-align: top; ">
    <td>10.13**</td>
    <td>&#160;</td>
    <td style="text-align: justify"> <a href="f20f2022ex10-13_mingzhu.htm">Business Cooperation Agreement, dated January 22, 2022, by and among Hainan Zhisheng Automobile Services Co., Ltd., shareholders of Hainan Zhisheng Automobile Services Co., Ltd. and Zhejiang Caiyunlian Technology Co., Ltd.</a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td>10.14**</td>
    <td>&#160;</td>
    <td style="text-align: justify"> <a href="f20f2022ex10-14_mingzhu.htm">Equity Interest Pledge Agreement, dated January 22, 2022, by and between Hainan Zhisheng Automobile Services Co., Ltd., Zhejiang Caiyunlian Technology Co., Ltd, and Pledgors named therein.</a></td></tr>
  <tr style="vertical-align: top; ">
    <td>10.15**</td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="f20f2022ex10-15_mingzhu.htm">Exclusive Option Agreement, dated January 22, 2022, by and among Hainan Zhisheng Automobile Services Co., Ltd., shareholders of Hainan Zhisheng Automobile Services Co., Ltd. and Zhejiang Caiyunlian Technology Co., Ltd.</a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td>10.16**</td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="f20f2022ex10-16_mingzhu.htm">Proxy Agreement, dated January 22, 2022, by and among Hainan Zhisheng Automobile Services Co., Ltd., shareholders of Hainan Zhisheng Automobile Services Co., Ltd. and Zhejiang Caiyunlian Technology Co., Ltd.</a></td></tr>
  <tr style="vertical-align: top; ">
    <td>10.17**</td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="f20f2022ex10-17_mingzhu.htm">Letter of Confirmation and Undertaking, dated January 22, 2022, by shareholders of Hainan Zhisheng Automobile Services Co., Ltd.</a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td>10.18**</td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="f20f2022ex10-18_mingzhu.htm">Consent Letter, dated January 22, 2022, by spouse of shareholder of Hainan Zhisheng Automobile Services Co., Ltd.</a></td></tr>
  <tr style="vertical-align: top; ">
    <td>11*</td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="http://www.sec.gov/Archives/edgar/data/1782037/000121390021013779/ea136499ex14_mingzhu.htm">Code of Ethics of the Registrant, filed as Exhibit 14 to the Registrant&#8217;s Form F-1 filed with the Commission on March 5, 2021 (File number 333-253950)</a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td>12.1**</td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="f20f2022ex12-1_mingzhu.htm">CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</a></td></tr>
  <tr style="vertical-align: top; ">
    <td>12.2**</td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="f20f2022ex12-2_mingzhu.htm">CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002</a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td>13.1***</td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="f20f2022ex13-1_mingzhu.htm">CEO Certificate Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</a></td></tr>
  <tr style="vertical-align: top; ">
    <td>13.2***</td>
    <td>&#160;</td>
    <td style="text-align: justify"><a href="f20f2022ex13-2_mingzhu.htm">CFO Certificate Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</a></td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td>101.INS**</td>
    <td>&#160;</td>
    <td style="text-align: justify">Inline XBRL Instance Document</td></tr>
  <tr style="vertical-align: top; ">
    <td>101.SCH**</td>
    <td>&#160;</td>
    <td style="text-align: justify">Inline XBRL Taxonomy Extension Schema Document</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td>101.CAL**</td>
    <td>&#160;</td>
    <td style="text-align: justify">Inline XBRL Taxonomy Extension Calculation Linkbase Document</td></tr>
  <tr style="vertical-align: top; ">
    <td style="text-align: justify">101.DEF**</td>
    <td>&#160;</td>
    <td>Inline XBRL Taxonomy Extension Definition Linkbase Document</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td style="text-align: justify">101.LAB**</td>
    <td>&#160;</td>
    <td>Inline XBRL Taxonomy Extension Label Linkbase Document</td></tr>
  <tr style="vertical-align: top; ">
    <td>101.PRE**</td>
    <td>&#160;</td>
    <td>Inline XBRL Taxonomy Extension Presentation Linkbase Document</td></tr>
  <tr style="vertical-align: top; background-color: rgb(204,238,255)">
    <td>104**</td>
    <td>&#160;</td>
    <td>Cover Page Interactive Data File (embedded within the Inline XBRL document)</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
    <td style="width: 0.5in">*</td>
    <td style="text-align: justify">Previously Filed as indicated and incorporated by reference.</td></tr>
  <tr style="vertical-align: top">
    <td>**</td>
    <td style="text-align: justify">Filed herewith.</td></tr>
  <tr style="vertical-align: top">
    <td>***</td>
    <td style="text-align: justify">Furnished herewith. </td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

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</div><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: 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 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-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>&#160;</td>
    <td colspan="2"><b>MINGZHU LOGISTICS HOLDINGS LIMITED</b></td></tr>
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td colspan="2">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td colspan="2" style="border-bottom: black 1.5pt solid">/s/ Jinlong Yang</td></tr>
  <tr style="vertical-align: top">
    <td style="width: 60%">&#160;</td>
    <td style="width: 5%">Name:&#160;</td>
    <td style="width: 35%">Jinlong Yang</td></tr>
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td>Title:</td>
    <td>Chief Executive Officer and Director</td></tr>
  <tr style="vertical-align: top">
    <td>&#160;</td>
    <td colspan="2">&#160;</td></tr>
  <tr style="vertical-align: top">
    <td>Date: May 16, 2023</td>
    <td>&#160;</td>
    <td>&#160;</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

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    </div><div style="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><p style="margin: 0pt">&#160;</p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIES</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>CONSOLIDATED
FINANCIAL STATEMENTS</b></span></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><span style="text-transform: uppercase"><b>Table
of content</b></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>
    <td style="width: 89%; padding-left: 9pt; text-indent: -9pt">&#160;</td>
    <td style="width: 1%; text-align: justify">&#160;</td>
    <td style="border-bottom: black 1.5pt solid; vertical-align: bottom; width: 10%; text-align: center"><b>Page(s)</b></td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><b>Consolidated Financial Statements </b></td>
    <td style="text-align: justify">&#160;</td>
    <td style="vertical-align: bottom; text-align: center">&#160;</td></tr>
  <tr>
    <td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><a href="#f_001">Reports of Independent Registered Public Accounting Firms (PCAOB firm ID#3481)</a></td>
    <td style="text-align: justify">&#160;</td>
    <td style="vertical-align: bottom; text-align: center">F-2 </td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><a href="#f_002">Consolidated Balance Sheets as of December 31, 2022 and 2021</a></td>
    <td style="text-align: justify">&#160;</td>
    <td style="vertical-align: bottom; text-align: center">F-3</td></tr>
  <tr>
    <td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><a href="#f_003">Consolidated Statements of Income (Loss) and
    Comprehensive Income (Loss) for the Years Ended December 31, 2022, 2021 and 2020</a></td>
    <td style="text-align: justify">&#160;</td>
    <td style="vertical-align: bottom; text-align: center">F-4</td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><a href="#f_004">Consolidated Statements of Changes in Shareholders&#8217; Equity for the Years Ended December 31, 2022, 2021 and 2020</a></td>
    <td style="text-align: justify">&#160;</td>
    <td style="vertical-align: bottom; text-align: center">F-5</td></tr>
  <tr>
    <td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><a href="#f_005">Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2021 and 2020</a></td>
    <td style="text-align: justify">&#160;</td>
    <td style="vertical-align: bottom; text-align: center">F-6</td></tr>
  <tr style="background-color: rgb(204,238,255)">
    <td style="padding-left: 9pt; text-align: justify; text-indent: -9pt"><a href="#f_006">Notes to the Consolidated Financial Statements</a></td>
    <td style="text-align: justify">&#160;</td>
    <td style="vertical-align: bottom; text-align: center">F-7 &#8211; F-43</td></tr>
  </table><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>


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

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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  <td style="text-align: left; width: 50%; vertical-align: bottom"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">AUDIT
  ALLIANCE LLP<b><sup>&#174;</sup></b></span></td><td style="width: 35%"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><img alt="" src="image_004.jpg"/>&#160;</span></td></tr>
<tr style="vertical-align: top; text-align: left">
  <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
  <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">A Top 18 Audit Firm</span></td>
  <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
<tr style="vertical-align: top; text-align: left">
  <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td>
  <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">10 Anson Road, #20-16 International Plaza, Singapore
  079903.</span></td>
  <td><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</span></td></tr>
</table><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
<tr style="vertical-align: top; text-align: left">
  <td style="width: 1.5in">UEN: T12LL1223B</td>
  <td style="width: 1.5in">GST Reg No: M90367663E</td>
  <td style="width: 1.5in">Tel: (65) 6227 5428</td></tr>
<tr style="vertical-align: top; text-align: left">
  <td colspan="3">Website: <b>www.allianceaudit.com</b></td></tr>
</table><div>

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


</div><div><a id="f_001"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; 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">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">To the Board of Directors of MingZhu Logistics Holdings Limited</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Opinion on the Financial Statements</b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have audited the accompanying consolidated
balance sheets of MingZhu Logistics Holdings Limited and its subsidiaries (collectively, the &#8220;Company&#8221;) as of December 31,
2022 and 2021, the related consolidated statements of (loss) income and comprehensive (loss) income, shareholders&#8217; equity, and cash
flows for the years then ended, and the related notes to the consolidated financial statements and schedule (collectively, the financial
statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company
as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the years ended December 31, 2022 and 2021,
in conformity with accounting principles generally accepted in the United States of America.</p><div>

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

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">These financial statements are the responsibility
of the Company&#8217;s management. Our responsibility is to express an opinion on the Company&#8217;s financial statements based on our
audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance
with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.</p><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our audit 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 audit 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 audit provides a reasonable basis for our opinion.</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">Very truly yours,</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b><i>/s/ <ix:nonNumeric contextRef="c0" name="dei:AuditorName">Audit Alliance LLP</ix:nonNumeric></i></b></p><div>

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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We have served as the Company&#8217;s auditor since 2021.</p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><ix:nonNumeric contextRef="c0" name="dei:AuditorLocation">Singapore</ix:nonNumeric></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">May 16, 2023</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">PCAOB ID Number <ix:nonNumeric contextRef="c0" name="dei:AuditorFirmId">3481</ix:nonNumeric></p><div>


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


</div><!-- Field: Page; Sequence: 133; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->2<!-- 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">&#160;</p><div>

</div><div><a id="f_002"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIES</b></p><div>

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

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

</div><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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    <td colspan="2" style="text-align: justify">&#160;</td><td>&#160;</td></tr>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">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; 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-align: left; text-indent: 10pt">Tax payable</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: 10pt">Current maturities of long-term bank borrowings</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: 10pt">Current portion of capital lease and financing obligations</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="ygmz:CurrentPortionOfCapitalLeaseAndFinancingObligations" scale="0" unitRef="usd">757,088</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="c4" decimals="0" format="ixt:num-dot-decimal" name="ygmz:LongtermLoansFromOtherFinancialInstitutions" scale="0" unitRef="usd">144,126</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: 20pt">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">61,942,869</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">34,301,001</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td>&#160;</td><td>&#160;</td>
    <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">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; ">
    <td style="text-align: left; text-indent: 10pt">Long-term bank borrowings</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:LongTermDebtNoncurrent" scale="0" unitRef="usd">253,352</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LongTermDebtNoncurrent" scale="0" unitRef="usd">179,339</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">&#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="ygmz:LongtermPortionOfCapitalLeaseAndFinancingObligationsNoncurrent" scale="0" unitRef="usd">1,158,642</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="ygmz:LongtermPortionOfCapitalLeaseAndFinancingObligationsNoncurrent" scale="0" unitRef="usd">200,712</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: 20pt">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">1,411,994</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">380,051</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">Total 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">63,354,863</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">34,681,052</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td>&#160;</td><td>&#160;</td>
    <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">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; ">
    <td style="text-indent: -9pt; padding-left: 0.25in">Ordinary shares: $<ix:nonFraction contextRef="c3" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:CommonStockParOrStatedValuePerShare" scale="0" unitRef="usdPershares"><ix:nonFraction contextRef="c4" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:CommonStockParOrStatedValuePerShare" scale="0" unitRef="usdPershares">0.001</ix:nonFraction></ix:nonFraction>&#160;par value,&#160;<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesAuthorized" scale="0" unitRef="shares"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesAuthorized" scale="0" unitRef="shares">50,000,000</ix:nonFraction></ix:nonFraction>&#160;shares authorized, <ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesOutstanding" scale="0" unitRef="shares">22,960,277</ix:nonFraction></ix:nonFraction>&#160;and&#160;<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesIssued" scale="0" unitRef="shares"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CommonStockSharesOutstanding" scale="0" unitRef="shares">19,134,277</ix:nonFraction></ix:nonFraction>&#160;shares issued and outstanding as of December 31, 2022 and 2021, respectively*</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" id="ix_1_fact" name="us-gaap:CommonStockValue" scale="0" unitRef="usd">19,134</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-indent: 10pt">Share subscription receivables</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="ygmz:ShareSubscriptionReceivables" scale="0" sign="-" unitRef="usd">847,086</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="ygmz:ShareSubscriptionReceivables" scale="0" sign="-" unitRef="usd">847,086</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: 10pt">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">41,734,546</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AdditionalPaidInCapital" scale="0" unitRef="usd">35,796,751</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: 10pt">Statutory reserves</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="ygmz:StatutoryReserves" scale="0" unitRef="usd">1,036,841</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="ygmz:StatutoryReserves" scale="0" unitRef="usd">916,148</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: 10pt">Retained earnings</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: 10pt">Accumulated other comprehensive loss</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccumulatedOtherComprehensiveIncomeLossNetOfTax" scale="0" sign="-" unitRef="usd">1,549,807</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccumulatedOtherComprehensiveIncomeLossNetOfTax" scale="0" sign="-" unitRef="usd">140,376</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: 20pt">Total shareholders&#8217; equity</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest" scale="0" unitRef="usd">48,101,992</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest" scale="0" unitRef="usd">41,673,614</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: 4pt">Total liabilities and shareholders&#8217; equity</td><td style="padding-bottom: 4pt">&#160;</td>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#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: 24px">*</td> <td style="text-align: justify"><ix:footnote id="ix_0_footnote" xml:lang="en-US">Giving retroactive effect to the re-denomination and nominal issuance of shares effected on February 12, 2020, and the surrender and cancellation of shares effected on May 21, 2020.</ix:footnote></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: center">The accompanying notes are an integral part of
these consolidated financial statements.</p><div>

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


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</div><div><a id="f_003"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND
COMPREHENSIVE (LOSS) INCOME </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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    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#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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    <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>
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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: justify">&#160;</td><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; ">
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    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c0" decimals="2" format="ixt:num-dot-decimal" id="ix_11_fact" name="us-gaap:EarningsPerShareDiluted" scale="0" unitRef="usdPershares">0.09</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">(<ix:nonFraction contextRef="c5" decimals="2" format="ixt:num-dot-decimal" id="ix_12_fact" name="us-gaap:EarningsPerShareDiluted" scale="0" sign="-" unitRef="usdPershares">0.06</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">)</td><td style="padding-bottom: 4pt">&#160;</td>
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  </table><div>

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

</div><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: 24px">*</td> <td style="text-align: justify"><ix:footnote id="ix_1_footnote" xml:lang="en-US">Giving retroactive effect to the re-denomination and nominal issuance of shares effected on February 12, 2020, and the surrender and cancellation of shares effected on May 21, 2020.</ix:footnote></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: center">The accompanying notes are an integral part of
these consolidated financial statements.</p><div>

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


</div><!-- Field: Page; Sequence: 135; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->4<!-- Field: /Sequence --></p></div><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><div><a id="f_004"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIES</b></p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS&#8217;
EQUITY</b></p><div>

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

</div><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: center">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Amount</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Share<br/> Subscription<br/> Receivables</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
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    <td colspan="2" style="font-weight: bold; text-align: center">USD</td><td style="font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td>
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    <td colspan="2" style="font-weight: bold; text-align: center">USD</td><td style="font-weight: bold">&#160;</td><td style="font-weight: bold">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -0.125in; padding-left: 0.25in">Foreign currency translation adjustment</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><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; ">
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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">Issuance of shares</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-27">-</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="c29" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodValueNewIssues" scale="0" unitRef="usd">21,971,931</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-28">-</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-29">-</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-30">-</div></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">Net (loss) for the year</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-32">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; text-indent: -0.125in; padding-left: 0.25in">Foreign currency translation adjustment</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-37">-</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-38">-</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-39">-</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-40">-</div></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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</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: 24px">*</td> <td style="text-align: justify"><ix:footnote id="ix_2_footnote" xml:lang="en-US">Giving retroactive effect to the re-denomination and nominal issuance of shares effected on February 12, 2020, and the surrender and cancellation of shares effected on May 21, 2020.</ix:footnote></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: center">The accompanying notes are an integral part of
these consolidated financial statements.</p><div>

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


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</div><div><a id="f_005"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIES</b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#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="10" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the Year Ended December&#160;31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom">
    <td>&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center">USD</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">USD</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">USD</td><td style="font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td style="font-weight: bold">&#160;</td>
    <td colspan="2" style="font-weight: bold; text-align: center">Reclassification</td><td style="font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td>Cash flows from operating activities:</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
    <td colspan="2">&#160;</td><td>&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#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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    <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:AmortizationOfFinancingCosts" scale="0" unitRef="usd">223,904</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:Depreciation" scale="0" unitRef="usd">3,844,159</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: left">Deferred income tax (benefit) expenses</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredIncomeTaxesAndTaxCredits" scale="0" sign="-" unitRef="usd">202,746</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left">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; ">
    <td style="padding-left: 0.125in; text-align: left">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">3,257,814</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in">Prepayments</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">4,678,337</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: left">Other receivables</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInAccountsAndOtherReceivables" scale="0" sign="-" unitRef="usd">7,531,718</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:IncreaseDecreaseInAccountsAndOtherReceivables" scale="0" sign="-" unitRef="usd">3,444,875</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:IncreaseDecreaseInAccountsAndOtherReceivables" scale="0" sign="-" unitRef="usd">466,187</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left">Loans 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:IncreaseDecreaseInOtherReceivables" scale="0" unitRef="usd">16,621,319</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c6" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInOtherReceivables" scale="0" unitRef="usd">10,653,588</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in">Deposits</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="ygmz:Deposit" scale="0" unitRef="usd">1,313,871</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left">Accounts and notes 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:IncreaseDecreaseInAccountsPayable" scale="0" unitRef="usd">4,207,620</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: left">Other payables and accrued liabilities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:IncreaseDecreaseInAccruedLiabilitiesAndOtherOperatingLiabilities" scale="0" sign="-" unitRef="usd">7,766,999</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Tax payables</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInOperatingActivities" scale="0" sign="-" unitRef="usd">3,953,955</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Cash flows from investing 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>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PaymentsToAcquirePropertyPlantAndEquipment" scale="0" unitRef="usd">12,243</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: left">Proceeds from disposal of equipment</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Cash from acquisition of subsidiary</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: 1.5pt">Net cash provided by (used in) by investing activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInInvestingActivities" scale="0" unitRef="usd">2,726,903</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left">Cash flows from financing activities:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left">Proceeds from short-term bank borrowings</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:ProceedsFromShortTermDebt" scale="0" unitRef="usd">21,212,202</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:ProceedsFromShortTermDebt" scale="0" unitRef="usd">6,665,840</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:ProceedsFromShortTermDebt" scale="0" unitRef="usd">6,604,675</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: left">Repayment of short-term bank borrowings</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:RepaymentsOfShortTermDebt" scale="0" unitRef="usd">18,631,203</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:RepaymentsOfShortTermDebt" scale="0" unitRef="usd">7,433,187</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:RepaymentsOfShortTermDebt" scale="0" unitRef="usd">3,041,105</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left">Proceeds from long-term bank borrowings</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:ProceedsFromIssuanceOfLongTermDebt" scale="0" unitRef="usd">444,345</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:ProceedsFromIssuanceOfLongTermDebt" scale="0" unitRef="usd">465,059</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-66">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: left">Repayment of long-term bank borrowings</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:RepaymentsOfOtherDebt" scale="0" unitRef="usd">92,594</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:RepaymentsOfOtherDebt" scale="0" unitRef="usd">22,146</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:RepaymentsOfOtherDebt" scale="0" unitRef="usd">1,129,747</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left">Repayments of loans from other financial institutions</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:RepaymentsOfOtherLongTermDebt" scale="0" unitRef="usd">136,492</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:RepaymentsOfOtherLongTermDebt" scale="0" unitRef="usd">300,279</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:RepaymentsOfOtherLongTermDebt" scale="0" unitRef="usd">274,929</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: left">Repayments of obligations under capital leases</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:RepaymentsOfLongTermCapitalLeaseObligations" scale="0" unitRef="usd">597,533</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:RepaymentsOfLongTermCapitalLeaseObligations" scale="0" unitRef="usd">98,972</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:RepaymentsOfLongTermCapitalLeaseObligations" scale="0" unitRef="usd">980,244</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left">Amounts advanced from related parties</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromOtherDebt" scale="0" unitRef="usd">1,258,130</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:ProceedsFromOtherDebt" scale="0" unitRef="usd">6,787,477</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c6" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromOtherDebt" scale="0" unitRef="usd">10,238,023</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: left">Repayments to related parties</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RepaymentsOfRelatedPartyDebt" scale="0" unitRef="usd">2,663,598</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:RepaymentsOfRelatedPartyDebt" scale="0" unitRef="usd">7,864,254</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:RepaymentsOfRelatedPartyDebt" scale="0" unitRef="usd">10,062,100</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="padding-left: 0.125in; text-align: left">Proceeds from initial public offering</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-67">-</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-68">-</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:ProceedsFromIssuanceInitialPublicOffering" scale="0" unitRef="usd">10,958,803</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Proceeds from private placement</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-69">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromIssuanceOfPrivatePlacement" scale="0" unitRef="usd">18,465,009</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-70">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 1.5pt">Net cash provided by financing activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInFinancingActivities" scale="0" unitRef="usd">793,257</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInFinancingActivities" scale="0" unitRef="usd">16,664,547</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="c6" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInFinancingActivities" scale="0" unitRef="usd">12,313,376</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td>&#160;</td><td>&#160;</td>
    <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">Effect of exchange rate change on cash</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; 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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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&#160;</p><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The accompanying notes are an integral part of
these consolidated financial statements.</p><div>

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


</div><!-- Field: Page; Sequence: 137; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->6<!-- 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">&#160;</p><div>

</div><div><a id="f_006"></a></div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIES</b></p><div>

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><b>(In U.S. Dollars, unless stated otherwise)</b></p><div>

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

</div><ix:nonNumeric contextRef="c0" continuedAt="_NatureOfOperations-c0_cont_1" escape="true" name="us-gaap:NatureOfOperations"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 1 &#8211; Nature of business and organization</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_2" id="_NatureOfOperations-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">MingZhu Logistics Holdings Limited (&#8220;MingZhu
Cayman&#8221;) is a holding company incorporated in the Cayman Islands on January 2, 2018 under the laws of the Cayman Islands. The Company
are engaged in various businesses through our subsidiaries and controlled entities in China.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_3" id="_NatureOfOperations-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Reorganization</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_4" id="_NatureOfOperations-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A reorganization of the Company&#8217;s legal
structure was completed on April 13, 2018. The reorganization involved the incorporation of MingZhu Cayman, and its wholly-owned subsidiaries,
MingZhu BVI, and MingZhu HK; and the transfer of all equity ownership of Shenzhen Yangang Mingzhu Freight Industry Co., Ltd (&#8220;MingZhu&#8221;)
to MingZhu HK from the former shareholders of MingZhu. In consideration of the transfer, the Company issued <ix:nonFraction contextRef="c51" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SaleOfStockNumberOfSharesIssuedInTransaction" scale="0" unitRef="shares">1,000</ix:nonFraction> shares of the Company
with par value $<ix:nonFraction contextRef="c51" decimals="3" format="ixt:num-dot-decimal" name="ygmz:PricePerShare" scale="0" unitRef="usdPershares">0.001</ix:nonFraction> (HKD <ix:nonFraction contextRef="c51" decimals="2" format="ixt:num-dot-decimal" name="ygmz:PricePerShare" scale="0" unitRef="hkdPershares">0.01</ix:nonFraction>) per share to the former shareholders of MingZhu.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_5" id="_NatureOfOperations-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On April 13, 2018, the former shareholders transferred
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as of MingZhu prior to the reorganization.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_6" id="_NatureOfOperations-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">MingZhu was incorporated on July 10, 2002 in Shenzhen,
Guangdong under the laws of the PRC. Shenzhen Pengcheng Shengshi Logistics Co., Ltd. (&#8220;MingZhu Pengcheng&#8221;), a company providing
trucking services, was incorporated on April 7, 2010 in Shenzhen, Guangdong under the laws of the PRC. Prior to the reorganization, MingZhu
and MingZhu Pengcheng were under common control. On November 10, 2017, for the purpose of reorganization so that the business of the Company
could be rearranged to be under a common holding company, the entire equity interest of MingZhu Pengcheng was transferred to MingZhu.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_7" id="_NatureOfOperations-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">These two transactions were between entities under
common control, and therefore accounted for in a manner similar to the pooling of interest method. Under the pooling-of-interests method,
combination between two businesses under common control is accounted for at carrying amounts with retrospective adjustment of prior period
financial statements, and the equity accounts of the combining entities are combined and the difference between the consideration paid
and the net assets acquired is reflected as an equity transaction (i.e., distribution to parent company). As opposed to the purchase method
of accounting, no intangible assets are recognized in the transaction, and no goodwill is recognized as a result of the combination.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_8" id="_NatureOfOperations-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On September 5, 2018, MingZhu HK established its
wholly-owned subsidiary, Shenzhen Yangang Mingzhu Supply Chain Management Co., Ltd (&#8220;MingZhu Management&#8221;), a PRC company.
MingZhu Management engages in providing transportation and supply chain management services.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_9" id="_NatureOfOperations-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">With the effect of resolutions passed by board
of directors on February 12, 2020, the authorized number of ordinary shares increased from <ix:nonFraction contextRef="c55" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ExcessStockSharesAuthorized" scale="0" unitRef="shares">38,000,000</ix:nonFraction> to <ix:nonFraction contextRef="c56" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ExcessStockSharesAuthorized" scale="0" unitRef="shares">50,000,000</ix:nonFraction> with a par value of
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of HKD <ix:nonFraction contextRef="c58" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:TemporaryEquityParOrStatedValuePerShare" scale="0" unitRef="hkdPershares">0.01</ix:nonFraction>. With the effect of resolution passed by board of directors on May 21, 2020, the issued number of ordinary shares decreased
from <ix:nonFraction contextRef="c59" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ExcessStockSharesIssued" scale="0" unitRef="shares">9,250,000</ix:nonFraction> to <ix:nonFraction contextRef="c60" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ExcessStockSharesIssued" scale="0" unitRef="shares">9,000,000</ix:nonFraction>. As of the date hereof, the authorized number of ordinary shares is <ix:nonFraction contextRef="c61" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ExcessStockSharesAuthorized" scale="0" unitRef="shares">50,000,000</ix:nonFraction> with a par value of $<ix:nonFraction contextRef="c61" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:TemporaryEquityParOrStatedValuePerShare" scale="0" unitRef="usdPershares">0.001</ix:nonFraction>
and the issued number of ordinary shares is <ix:nonFraction contextRef="c62" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ExcessStockSharesIssued" scale="0" unitRef="shares">9,000,000</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><ix:continuation continuedAt="_NatureOfOperations-c0_cont_10" id="_NatureOfOperations-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On October 21, 2020, the Company completed the
initial public offering (&#8220;IPO&#8221;) of <ix:nonFraction contextRef="c63" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:SaleOfStockNumberOfSharesIssuedInTransaction" scale="0" unitRef="shares">3,000,000</ix:nonFraction> ordinary shares at a public offering price of US$<ix:nonFraction contextRef="c64" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:SaleOfStockPricePerShare" scale="0" unitRef="usdPershares">4.00</ix:nonFraction> per share.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_11" id="_NatureOfOperations-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On October 30, 2020, the underwriter and sole
book-runner of our underwritten IPO, exercised the partial over-allotment option and purchased an additional <ix:nonFraction contextRef="c65" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesIssuedForServices" scale="0" unitRef="shares">350,000</ix:nonFraction> ordinary shares of
the Company at the IPO price of US$<ix:nonFraction contextRef="c66" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:SaleOfStockPricePerShare" scale="0" unitRef="usdPershares">4.00</ix:nonFraction> per share.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_12" id="_NatureOfOperations-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 4, 2020, the underwriter and sole
book-runner of our underwritten IPO, further exercised the partial over-allotment option and purchased an additional <ix:nonFraction contextRef="c67" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesIssuedForServices" scale="0" unitRef="shares">4,040</ix:nonFraction> ordinary shares
of the Company at the IPO price of US$<ix:nonFraction contextRef="c68" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:SaleOfStockPricePerShare" scale="0" unitRef="usdPershares">4.00</ix:nonFraction> per share.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_13" id="_NatureOfOperations-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 12, 2021, the Company closed its direct
public offering of <ix:nonFraction contextRef="c69" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PartnersCapitalAccountPublicSaleOfUnitsNetOfOfferingCosts" scale="0" unitRef="usd">3,333,335</ix:nonFraction> units of its securities (each, a &#8220;Unit&#8221;), with each Unit consisting of (i) one ordinary share
of the Company, par value $<ix:nonFraction contextRef="c70" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:CommonStockParOrStatedValuePerShare" scale="0" unitRef="usdPershares">0.001</ix:nonFraction> per share, and (ii) one warrant to purchase <ix:nonFraction contextRef="c69" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:PaymentsForRepurchaseOfWarrants" scale="0" unitRef="usd">0.75</ix:nonFraction> ordinary share. The Company sold the Units at a price
of $<ix:nonFraction contextRef="c71" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:SharesIssuedPricePerShare" scale="0" unitRef="usdPershares">6.00</ix:nonFraction> per Unit. The Company received gross proceeds from the Offering, before deducting estimated offering expenses payable by the
Company, of approximately $<ix:nonFraction contextRef="c69" decimals="0" format="ixt:num-dot-decimal" name="ygmz:OfferingExpensesPayable" scale="0" unitRef="usd">18,000,000</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><ix:continuation continuedAt="_NatureOfOperations-c0_cont_14" id="_NatureOfOperations-c0_cont_13"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On April 21, 2021, the underwriter and sole book-runner
of our underwritten IPO, exercised its partial warrant and purchased a total of <ix:nonFraction contextRef="c72" decimals="0" format="ixt:num-dot-decimal" name="ygmz:WarrantPurchasedTotal" scale="0" unitRef="usd">214,286</ix:nonFraction> ordinary shares of the Company with no cash in
consideration.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_15" id="_NatureOfOperations-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 14, 2021, the underwriter and sole book-runner
of our underwritten IPO, exercised its partial warrant and purchased a total of <ix:nonFraction contextRef="c73" decimals="0" format="ixt:num-dot-decimal" name="ygmz:WarrantPurchasedTotal" scale="0" unitRef="usd">43,616</ix:nonFraction> ordinary shares of the Company with no cash in
consideration.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><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><ix:continuation continuedAt="_NatureOfOperations-c0_cont_16" id="_NatureOfOperations-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 29, 2021 (&#8220;Acquisition Date&#8221;),
the Company entered into a Share Purchase Agreement (the &#8220;SPA&#8221;) to acquire <ix:nonFraction contextRef="c74" decimals="2" format="ixt:num-dot-decimal" name="ygmz:EquityInterestPercentage" scale="-2" unitRef="pure">100</ix:nonFraction>% of the equity interest of Cheyi (BVI) Limited
(the &#8220;Cheyi BVI&#8221;) which operates its business through its subsidiary Zhejiang Cheyi Network Technology Co., Ltd. (the &#8220;Cheyi
Network&#8221;), an integrated online car-hailing and driver management services company. Pursuant to the agreement, the total consideration
for the acquisition of <ix:nonFraction contextRef="c75" decimals="2" format="ixt:num-dot-decimal" name="ygmz:EquityOwnershipPercentage" scale="-2" unitRef="pure">100</ix:nonFraction>% equity ownership of Cheyi BVI is an aggregate of U.S. $<ix:nonFraction contextRef="c76" decimals="0" format="ixt:num-dot-decimal" name="ygmz:AggregateValue" scale="0" unitRef="usd">23,470,712</ix:nonFraction>, consisting of the issuance by the Company
to the shareholders of Cheyi BVI an aggregate of <ix:nonFraction contextRef="c76" decimals="0" format="ixt:num-dot-decimal" name="ygmz:AggregateShares" scale="0" unitRef="shares">3,189,000</ix:nonFraction> fully paid Company&#8217;s ordinary shares (being U.S. $<ix:nonFraction contextRef="c77" decimals="0" format="ixt:num-dot-decimal" name="ygmz:AggregateValue" scale="0" unitRef="usd">6,760,680</ix:nonFraction> of $<ix:nonFraction contextRef="c78" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:SharesIssuedPricePerShare" scale="0" unitRef="usdPershares">2.12</ix:nonFraction>
per share) and payment of $<ix:nonFraction contextRef="c77" decimals="0" format="ixt:num-dot-decimal" name="ygmz:EarnoutPayment" scale="0" unitRef="usd">2,000,000</ix:nonFraction> at closing, and Year-2021 earnout payment of U.S. $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="ygmz:EarnoutPayment" scale="0" unitRef="usd">8,826,019</ix:nonFraction> and Year-2022 earnout payment of U.S.
$<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="ygmz:EarnoutPayment" scale="0" unitRef="usd">5,884,013</ix:nonFraction> if the Cheyi BVI&#8217;s audited net income for its fiscal year 2021 and 2022 is no less than U.S. $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="ygmz:NetIncomes" scale="0" unitRef="usd"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="ygmz:NetIncomes" scale="0" unitRef="usd">3,000,000</ix:nonFraction></ix:nonFraction> respectively.
The two earnout payments are due 13 months upon the delivery of Cheyi BVI&#8217;s audited 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="_NatureOfOperations-c0_cont_17" id="_NatureOfOperations-c0_cont_16"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The transaction was accounted for in accordance
with the provisions of ASC 805-10, Business Combinations. The values assigned in these financial statements represent management&#8217;s
best estimate of fair values as of the Acquisition 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="_NatureOfOperations-c0_cont_18" id="_NatureOfOperations-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As required by ASC 805-20, Business Combinations
&#8211; Identifiable Assets and Liabilities, and Any Noncontrolling Interest, management conducted a review to reassess whether they identified
all the assets acquired and all the liabilities assumed, and followed ASC 805-20&#8217;s measurement procedures for recognition of the
fair value of net assets acquired. According to ASC 820, the fair value hierarchy gives the highest priority to unadjusted quoted prices
in active markets as the most reliable fair value measurement, and the lowest priority to unobservable inputs. According to ASC 820-10-35-41,
the valuation of shares issued in the acquisitions and purchase consideration is recognized on the quoted trading price of the Company&#8217;s
ordinary shares on the date of acquisitions. The quoted closing prices for the Company&#8217;s ordinary shares on NASDAQ on the dates
of the acquisitions of Cheyi BVI was $<ix:nonFraction contextRef="c45" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:SharesIssuedPricePerShare" scale="0" unitRef="usdPershares">2.12</ix:nonFraction> per share.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_19" id="_NatureOfOperations-c0_cont_18"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table summarizes the allocation
of estimated fair values of net assets acquired and liabilities assumed:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_20" id="_NatureOfOperations-c0_cont_19"><ix:nonNumeric contextRef="c0" continuedAt="_ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumedTableTextBlock-c0_cont_1" escape="true" name="us-gaap:ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumedTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="font-weight: bold; text-align: justify">Recognized amounts of identifiable assets acquired and liabilities</td><td>&#160;</td>
    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="width: 88%; text-align: justify; padding-left: 9pt">Accounts receivable, net</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c88" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccountsReceivableNet" scale="0" unitRef="usd">216,572</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify; padding-left: 9pt">Prepayments</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c88" decimals="0" format="ixt:num-dot-decimal" name="ygmz:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentAssetsPrepayments" scale="0" unitRef="usd">575,913</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; padding-left: 9pt">Others receivable</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c88" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentAssetsReceivables" scale="0" unitRef="usd">4,761,164</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify; padding-left: 9pt">Equipment, net</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c88" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PropertyPlantAndEquipmentOtherNet" scale="0" unitRef="usd">9,980,931</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; padding-left: 9pt">Deferred tax assets</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c88" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DeferredTaxAssetsOther" scale="0" unitRef="usd">10</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify; padding-left: 9pt">Deposits</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c88" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:Deposits" scale="0" unitRef="usd">595,149</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; padding-left: 9pt">Short-term bank borrowings</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c88" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherShortTermBorrowings" scale="0" unitRef="usd">1,647,679</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify; padding-left: 9pt">Accounts and notes payable</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_21" id="_NatureOfOperations-c0_cont_20"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 14, 2022, the Company entered into a
Share Purchase Agreement with Yinhua which develops and operates a comprehensive auto related service platform to serve auto insurance
companies, and each of the shareholders of the Yinhua.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_22" id="_NatureOfOperations-c0_cont_21"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under terms of the share purchase agreement, we
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year of 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="_NatureOfOperations-c0_cont_23" id="_NatureOfOperations-c0_cont_22"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Founded in 2018, Yinhua provides diversified,
differentiated and customized value-added auto related services to auto insurance companies, where the services include road security
services, car maintenance services, car inspection services and other services. Yinhua develops and operates a comprehensive auto related
service platform for auto insurance companies combining intelligent human-vehicle interaction functions with car owner programs.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_24" id="_NatureOfOperations-c0_cont_23"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 18, 2022, the parties completed the transaction.
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</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_25" id="_NatureOfOperations-c0_cont_24"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As required by ASC 805-20, Business Combinations
&#8211; Identifiable Assets and Liabilities, and Any Noncontrolling Interest, management conducted a review to reassess whether they identified
all the assets acquired and all the liabilities assumed, and followed ASC 805-20&#8217;s measurement procedures for recognition of the
fair value of net assets acquired. According to ASC 820, the fair value hierarchy gives the highest priority to unadjusted quoted prices
in active markets as the most reliable fair value measurement, and the lowest priority to unobservable inputs. According to ASC 820-10-35-41,
the valuation of shares issued in the acquisitions and purchase consideration is recognized on the quoted trading price of the Company&#8217;s
ordinary shares on the date of acquisitions. The quoted closing prices for the Company&#8217;s ordinary shares on NASDAQ on the dates
of the acquisitions of Yinhua was $<ix:nonFraction contextRef="c3" decimals="2" format="ixt:num-dot-decimal" name="ygmz:QuotedClosingPricePerShare" scale="0" unitRef="usdPershares">1.85</ix:nonFraction> per share.</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><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_26" id="_NatureOfOperations-c0_cont_25"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table summarizes the allocation
of estimated fair values of net assets acquired and liabilities assumed:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_27" id="_NatureOfOperations-c0_cont_26"><ix:continuation continuedAt="_ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumedTableTextBlock-c0_cont_2" id="_ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumedTableTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">Short-term bank borrowings</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c90" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherShortTermBorrowings" scale="0" unitRef="usd">193,339</ix:nonFraction></td><td style="text-align: left">)</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c90" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OtherAccountsPayableAndAccruedLiabilities" scale="0" unitRef="usd">7,685,086</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: justify; padding-bottom: 1.5pt">Tax payable</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; padding-bottom: 1.5pt">Goodwill</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="c90" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:GoodwillFairValueDisclosure" scale="0" unitRef="usd">5,364,709</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
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</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_28" id="_NatureOfOperations-c0_cont_27"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 21, 2022, the Company entered into
a Share Purchase Agreement with Feipeng BVI which provides regional trucking services, and each of the shareholders of the Feipeng BVI,
pursuant to which, among other things and subject to the terms and conditions contained therein, the Company acquired <ix:nonFraction contextRef="c84" decimals="2" format="ixt:num-dot-decimal" name="ygmz:EquityOwnershipPercentage" scale="-2" unitRef="pure">100</ix:nonFraction>% of Feipeng
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a certain number of shares valued at $<ix:nonFraction contextRef="c84" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:OwnshareLendingArrangementSharesOutstandingValue" scale="0" unitRef="usd">4,990,436</ix:nonFraction> if it achieves a targeted net income of US$<ix:nonFraction contextRef="c85" decimals="-5" format="ixt:num-dot-decimal" name="us-gaap:NetInvestmentIncome" scale="6" unitRef="usd">2.4</ix:nonFraction> million during the calendar year 2023.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_29" id="_NatureOfOperations-c0_cont_28"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 21, 2022, the Company entered into
a Share Purchase Agreement with Feipeng BVI which provides regional trucking services, and each of the shareholders of the Feipeng BVI,
pursuant to which, among other things and subject to the terms and conditions contained therein, the Company acquired <ix:nonFraction contextRef="c86" decimals="2" format="ixt:num-dot-decimal" name="ygmz:EquityOwnershipPercentage" scale="-2" unitRef="pure">100</ix:nonFraction>% of Feipeng
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</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_30" id="_NatureOfOperations-c0_cont_29"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 21, 2022, the parties completed the
transaction. Upon the closing of the transaction, we acquired <ix:nonFraction contextRef="c3" decimals="2" format="ixt:num-dot-decimal" name="ygmz:EquityOwnershipPercentage" scale="-2" unitRef="pure">100</ix:nonFraction>% of the outstanding shares of the Feipeng BVI, and we paid $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DividendsCash" scale="0" unitRef="usd">9,550,000</ix:nonFraction>
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</div><div>

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of estimated fair values of net assets acquired and liabilities assumed:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_32" id="_NatureOfOperations-c0_cont_31"><ix:continuation id="_ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumedTableTextBlock-c0_cont_2"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

</div><ix:continuation continuedAt="_NatureOfOperations-c0_cont_33" id="_NatureOfOperations-c0_cont_32"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company
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</div><div>

</div><ix:continuation id="_NatureOfOperations-c0_cont_33"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2022, the authorized number
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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>

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

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</div><div>

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    <td>&#160;</td>
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    <td>&#160;</td>
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    <td>&#160;</td>
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    <td>&#160;</td>
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    <td>&#160;</td></tr>
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    <td>&#160;</td>
    <td style="border-bottom: black 1.5pt solid">$</td>
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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_2" id="_SignificantAccountingPoliciesTextBlock-c0_cont_1"><ix:nonNumeric contextRef="c0" continuedAt="_BasisOfAccountingPolicyPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:BasisOfAccountingPolicyPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Basis of presentation</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_4" id="_SignificantAccountingPoliciesTextBlock-c0_cont_3"><ix:nonNumeric contextRef="c0" continuedAt="_ConsolidationPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:ConsolidationPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Principles of consolidation</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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

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and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts
of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company&#8217;s consolidated
financial statements include the useful lives of property and equipment, impairment of long-lived assets, the fair value of the reporting
unit for the goodwill impairment test, allowance for doubtful accounts, provision for contingent liabilities, revenue recognition, deferred
taxes and uncertain tax position. Actual results could differ from these estimates.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

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local currency of the country in which the subsidiaries operate. The reporting currency of the Company is the United States Dollars (&#8220;U.S.
dollar&#8221;). The results of operations and the consolidated statements of cash flows denominated in foreign currencies are translated
at the average rates of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance
sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currencies
is translated at the historical rates of exchange at the time of capital contributions. Because cash flows are translated based on the
average translation rates, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily
agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different
exchange rates from period to period are included as a separate component of accumulated other comprehensive income included in consolidated
statements of changes in shareholders&#8217; equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions
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The Company&#8217;s subsidiaries with operations in PRC uses the local currency, Renminbi (&#8220;RMB&#8221;), as their functional currencies.
An entity&#8217;s functional currency is the currency of the primary economic environment in which it operates, normally that is the currency
of the environment in which the entity primarily generates and expends cash. Management&#8217;s judgment is essential to determine the
functional currency by assessing various indicators, such as cash flows, sales price and market, expenses, financing and inter-company
transactions and arrangements.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

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</div><div>

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</div><div>

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includes deposits with original maturities of three months or less with commercial banks in PRC. As of December 31, 2022 and 2021, cash
were held in accounts at financial institutions located in the PRC&#8218; which is not freely convertible into foreign currencies. In
addition, these balances are not covered by insurance. While management believes that these financial institutions are of high credit
quality, it also continually monitors their creditworthiness. The Company and its subsidiaries have not experienced any losses in such
accounts and do not believe the cash is exposed to any significant risk.</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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Statement of Cash Flows (230): Restricted Cash. The amendments in this Update require that a statement of cash flows explain the change
during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents.
For public business entities, the amendments in this update are effective for fiscal years beginning after December 15, 2017, and interim
periods within those annual periods. Earlier adoption is permitted. The amendments in this Update should be applied using a retrospective
transition method to each period presented. On January 1, 2018, the Company adopted this guidance on a retrospective basis and have applied
the changes to the consolidated statement of cash flows starting from the year ended December 31, 2016.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

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</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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management considers historical collection experience, aging of the receivables, the economic environment, industry trend analysis, and
the credit history and financial conditions of the customers. Management reviews its receivables on a regular basis to determine if the
bad debt allowance is adequate and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance
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</div><div>

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suppliers for purchasing goods or services that have not been received or provided and deposits made to the Company&#8217;s customers
and landlord. This amount is refundable and bears no interest. Prepayment and deposit are classified as either current or non-current
based on the terms of the respective agreements. These advances are unsecured and are reviewed periodically to determine whether their
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</div><div>

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the aging of receivables and changes in payment trends and records allowances when management believes collection of amounts due are at
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</div><div>

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</div><div>

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income and comprehensive income. Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets,
are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets,
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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>

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</div><div>

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</div><div>

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</div><div>

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will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the
recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment
loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition
of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company will reduce the carrying
amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable
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</div><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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Upon settling claims and expenses associated with claims where it has third party coverage, the Company is generally required to initially
fund payment to the claimant and seek reimbursement from the insurer.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

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

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of relevant trucking services. As at the date of this report the Company maintained an adequate insurance coverage in relation to the
trucking services to be delivered to its customers and third-party liability. The Company has also maintained sufficient workers&#8217;
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</div><div>

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are accounted for under ASC Topic 606, Revenue from Contracts with Customers (&#8220;ASC 606&#8221;). The Company recognizes revenue when
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</div><div>

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which required a cumulative adjustment to retained earnings instead of retrospectively adjusting prior periods. The adoption of ASC 606
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</div><div>

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</div><div>

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from the same base of customers. We evaluate whether our performance obligation is a promise to transfer services to the customer (as
the principal) or to arrange for services to be provided by another party (as the agent) using a control model. Our evaluation determined
that we are in control of establishing the transaction price, managing all aspects of the services process and taking the risk of failure
of provision of services. Based on our evaluation of the control model, we determined that all of our major businesses act as the principal
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</div><div>

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unsatisfied as of the end of the period as the Company&#8217;s contracts have an expected length of one year or less. The Company also
applies the practical expedient in ASC 606 that permits the recognition of incremental costs of obtaining contracts as an expense when
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</div><div>

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</div><div>

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</div><div>

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</div><div>

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the Company only is able to account the revenue generated by Yinhua and its subsidiaries after the acquisition is completed. The Company
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</div><div>

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ended December 31, 2022 is immaterial and hence no revenue is accounted in the consolidated financial statements for the year ended December
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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>

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</div><div>

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depreciation expenses and other expenses.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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in the consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle,
deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it
is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated
using tax rates that are expected to apply to the period when the asset is realized, or the liability is settled. Deferred tax is charged
or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred
tax is also dealt with in equity. Deferred tax assets are reduced by a valuation&#160;allowance when, in the opinion of management, it
is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for
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that under GAAP are recorded as an element of shareholders&#8217; equity but are excluded from net income. Other comprehensive income
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</div><div>

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measured as net income divided by the weighted average ordinary shares outstanding for the period. Diluted EPS presents the dilutive effect
on a per share basis of the potential ordinary shares (e.g., convertible securities, options and warrants) as if they had been converted
at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e.,
those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the years ended
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to certain cumulative limits, the &#8220;statutory surplus reserve fund&#8221; requires annual appropriations of 10% of after-tax profit
until the aggregated appropriations reach 50% of the registered capital (as determined under accounting principles generally accepted
in the PRC (&#8220;PRC GAAP&#8221;) at each year-end). For foreign invested enterprises and joint ventures in the PRC, annual appropriations
should be made to the &#8220;reserve fund&#8221;. For foreign invested enterprises, the annual appropriation for the &#8220;reserve fund&#8221;
cannot be less than 10% of after-tax profits until the aggregated appropriations reach 50% of the registered capital (as determined under
PRC GAAP at each year-end). If the Company has accumulated loss from prior periods, the Company is able to use the current period net
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such as government investigations and tax matters. The Company recognizes a liability for such contingency if it determines it is probable
that a loss has occurred, and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments
including historical and the specific facts and circumstances of each matter.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

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</div><div>

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and assessing performance of the Company as a whole and hence, the Company has only one reportable segment. The Company does not distinguish
between markets or segments for the purpose of internal reporting. The Company&#8217;s long-lived assets are substantially all located
in the PRC and all of the Company&#8217;s revenues are derived from the PRC.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

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</div><div>

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its CEO, who reviews the financial results when making decisions about allocating resources and assessing performance of the trucking
business, car-hailing and driver management services business and car owner services business separately and therefore, the Company has
three reportable segments. The Company&#8217;s long-lived assets are substantially all located in the PRC and all of the Company&#8217;s
revenues are derived from the PRC.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_94" id="_SignificantAccountingPoliciesTextBlock-c0_cont_93"><ix:nonNumeric contextRef="c0" continuedAt="_NewAccountingPronouncementsPolicyPolicyTextBlock-c0_cont_1" escape="true" name="us-gaap:NewAccountingPronouncementsPolicyPolicyTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Recent issued Accounting Pronouncements</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

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(Topic 842), which supersedes the guidance in ASC Topic 840,&#160;Leases. ASU 2016-02 requires, among other changes to the lease accounting
guidance, lessees to recognize most leases on-balance sheet via a right-of-use asset and lease liability, and additional qualitative and
quantitative disclosures. In July 2018, ASU No. 2018-10,&#160;Codification Improvements to Topic 842, Leases,&#160;was issued to provide
more detailed guidance and additional clarification for implementing ASU No. 2016-02. In July 2018, the FASB issued ASU No. 2018-11,&#160;Leases
(Topic 842): Targeted Improvements, which provides an optional transition method in addition to the existing modified retrospective transition
method by allowing a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. Furthermore,
in June 2020, the FASB issued ASU No. 2020-05,&#160;Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective
Dates for Certain Entities,&#160;which defers the effective date of ASU No. 2016-02 for certain entities. This update is effective for
the Group for annual reporting periods beginning after December 15, 2021 and interim periods within annual periods beginning after December
15, 2022. Early adoption is permitted. The Group does not plan to early adopt this guidance and is evaluating the impact of the new standard.
Under the Jumpstart Our Business Startups Act of 2012, as amended (&#8220;the JOBS Act&#8221;), the Company meets the definition of an
emerging growth company, or EGC, and has elected the extended transition period for complying with new or revised accounting standards,
which delays the adoption of these accounting standards until they would apply to private companies. Consequently, financial information
will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2022.
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Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held
at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the
existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This
guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. In November
2019, the FASB issued ASU 2019-10 which defers the effective date of ASU 2016-13 for SEC filers that are eligible to be smaller reporting
companies, non-SEC filers, and all other companies to fiscal years beginning after December 15, 2022, including interim periods within
those fiscal years. The Company is currently evaluating the impact of the adoption of ASU 2016-13 on its consolidated financial statements
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</div><div>

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of operations and cash flows.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_99" id="_SignificantAccountingPoliciesTextBlock-c0_cont_98"><ix:continuation continuedAt="ygmz_ConcentrationsOfRisksPolicyTextBlock-c0_cont_2" id="ygmz_ConcentrationsOfRisksPolicyTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <tr style="vertical-align: top">
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</div><div>

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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;). 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 the Company&#8217;s financial results reported
in the U.S. dollar terms without giving effect to any underlying changes in the Company&#8217;s business or results of operations. Remittances
in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory bodies
which require certain supporting documentation in order to affect the remittance.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

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If the RMB depreciates against the U.S. dollar, the value of RMB revenues, earnings and assets as expressed in U.S. dollar financial statements
will decline. The Company has not entered into any hedging transactions in an effort to reduce its exposure to foreign exchange risk.</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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  <tr style="vertical-align: top">
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</div><div>

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the Company to a significant concentration of credit risk consist primarily of cash, cash equivalents and restricted cash. As of December
31, 2022, and 2021, substantially most of the Company&#8217;s cash were held by major financial institutions located in the PRC, which
management believes are of high credit quality.</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_104" id="_SignificantAccountingPoliciesTextBlock-c0_cont_103"><ix:continuation continuedAt="ygmz_ConcentrationsOfRisksPolicyTextBlock-c0_cont_7" id="ygmz_ConcentrationsOfRisksPolicyTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the credit risk related to accounts receivable,
the Company performs ongoing credit evaluations of its customers. The Company establishes an allowance for doubtful accounts based upon
estimates, factors surrounding the credit risk of specific customers and other information. The allowance amounts were immaterial for
all periods presented.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_105" id="_SignificantAccountingPoliciesTextBlock-c0_cont_104"><ix:continuation continuedAt="ygmz_ConcentrationsOfRisksPolicyTextBlock-c0_cont_8" id="ygmz_ConcentrationsOfRisksPolicyTextBlock-c0_cont_7"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><div>




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

</div><ix:continuation continuedAt="_SignificantAccountingPoliciesTextBlock-c0_cont_108" id="_SignificantAccountingPoliciesTextBlock-c0_cont_107"><ix:continuation continuedAt="ygmz_ConcentrationsOfRisksPolicyTextBlock-c0_cont_11" id="ygmz_ConcentrationsOfRisksPolicyTextBlock-c0_cont_10"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><div>

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</div><div>

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A goodwill impairment loss is recognized when the carrying amount of the reporting unit is greater than its fair value. The goodwill impairment
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</div><div>

</div><ix:continuation id="_SignificantAccountingPoliciesTextBlock-c0_cont_112"><ix:continuation id="_GoodwillAndIntangibleAssetsGoodwillPolicy-c0_cont_2"><p style="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">Goodwill arising from the acquisition of Cheyi BVI, Yinhua and Feipeng
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test. During the year ended December 31, 2022, no indicator of impairment was identified with respect to the Cheyi BVI and Yinhua, which
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_CashAndCashEquivalentsDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:CashAndCashEquivalentsDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 4 &#8211; Cash and cash equivalents</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>

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</div><div>

</div><ix:continuation continuedAt="_CashAndCashEquivalentsDisclosureTextBlock-c0_cont_3" id="_CashAndCashEquivalentsDisclosureTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfCashAndCashEquivalentsTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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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>

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</div><div>

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</div><div>

</div><ix:continuation continuedAt="_AccountsAndNontradeReceivableTextBlock-c0_cont_4" id="_AccountsAndNontradeReceivableTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Movements of allowance for doubtful accounts are
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</div><div>

</div><ix:continuation id="_AccountsAndNontradeReceivableTextBlock-c0_cont_4"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:AccountsReceivableAllowanceForCreditLossTableTextBlock"><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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  </table></ix:nonNumeric></ix:continuation><div>

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

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</div><div>

</div><ix:continuation continuedAt="ygmz_PrepaymentTextBlock-c0_cont_2" id="ygmz_PrepaymentTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Prepayments consist 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 id="ygmz_PrepaymentTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:DeferredCostsCapitalizedPrepaidAndOtherAssetsDisclosureTextBlock"><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">
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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"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PrepaidInsurance" scale="0" unitRef="usd">92,630</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:Supplies" scale="0" unitRef="usd">54,544</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:DeferredOfferingCosts" scale="0" unitRef="usd">306,192</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 9pt">Prepayment - legal</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="ygmz:PrepaymentLegal" scale="0" unitRef="usd">222,556</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="ygmz:PrepaymentTelecommunicationServicesExpenses" scale="0" unitRef="usd">544,306</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-86">-</div></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="ygmz:PrepaymentCarServices" scale="0" unitRef="usd">4,279,810</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-87">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="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="ygmz:PrepaymentVehicles" scale="0" unitRef="usd">57,995</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  </table></ix:nonNumeric></ix:continuation><div>

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

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




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

</div><!-- Field: Page; Sequence: 151; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->20<!-- Field: /Sequence --></p></div><div>
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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="_FinancingReceivablesTextBlock-c0_cont_1" escape="true" name="us-gaap:FinancingReceivablesTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 7 &#8211; Other receivables</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>

</div><div>

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</div><div>

</div><ix:continuation continuedAt="_FinancingReceivablesTextBlock-c0_cont_3" id="_FinancingReceivablesTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c5" continuedAt="_ScheduleOfAccountsNotesLoansAndFinancingReceivableTextBlock-c5_cont_1" escape="true" name="us-gaap:ScheduleOfAccountsNotesLoansAndFinancingReceivableTextBlock"><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)">
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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:footnote id="ix_5_footnote" xml:lang="en-US"><ix:continuation id="_FinancingReceivablesTextBlock-c0_cont_3"><ix:continuation id="_ScheduleOfAccountsNotesLoansAndFinancingReceivableTextBlock-c5_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Others primarily involve the employee&#8217;s
statutory social insurance.</p></ix:continuation></ix:continuation></ix:footnote><div>

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

</div><ix:nonNumeric contextRef="c0" continuedAt="_LoansNotesTradeAndOtherReceivablesDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:LoansNotesTradeAndOtherReceivablesDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 8 &#8211; Loans receivable</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 id="_LoansNotesTradeAndOtherReceivablesDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Due to strategic business cooperation, the Company
made interest-free advances to third parties. As of December 31, 2022 and 2021, the outstanding balance of such interest-free advances
were $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="ygmz:InterestfreeAdvances" scale="0" unitRef="usd">28,622,704</ix:nonFraction> and $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="ygmz:InterestfreeAdvances" scale="0" unitRef="usd">22,487,767</ix:nonFraction>, respectively.</p></ix:continuation><div>

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;&#160;</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; text-align: justify"><b>Note 9 &#8211; Property and equipment, net</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_2" id="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Property and equipment, net consist 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="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">
    <td>Property and equipment</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-align: left; padding-left: 9pt">Computer and office equipment</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-left: 9pt">Revenue equipment &#8211; trucking</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>Subtotal</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:AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipmentExcludingCapitalLeasedAssets" scale="0" unitRef="usd">18,707,442</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipmentExcludingCapitalLeasedAssets" scale="0" unitRef="usd">15,498,214</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 4pt">Property and equipment, net</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PropertyPlantAndEquipmentNet" scale="0" unitRef="usd">9,073,698</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:PropertyPlantAndEquipmentNet" scale="0" unitRef="usd">12,224,582</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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">Depreciation expenses for the years ended December
31, 2022, 2021 and 2020 was $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CostOfGoodsAndServicesSoldDepreciation" scale="0" unitRef="usd">3,844,159</ix:nonFraction>, $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CostOfGoodsAndServicesSoldDepreciation" scale="0" unitRef="usd">1,438,310</ix:nonFraction> and $<ix:nonFraction contextRef="c6" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CostOfGoodsAndServicesSoldDepreciation" scale="0" unitRef="usd">1,521,234</ix:nonFraction>, respectively. For the year ended December 31, 2022, the Company disposed
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of $<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DisposalGroupDeferredGainOnDisposal" scale="0" unitRef="usd">679,635</ix:nonFraction>. For the year ended December 31, 2021, the Company disposed revenue equipment with cost of $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="ygmz:RevenueCost" scale="0" unitRef="usd">1,047,024</ix:nonFraction> and accumulated depreciation
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</div><div>

</div><ix:continuation continuedAt="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_5" id="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Revenue equipment under capital leases</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_PropertyPlantAndEquipmentDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company leased its revenue equipment from
third parties with terms of approximately 24 to 36 months and account for as a capital lease. As of December 31, 2022, carrying value
and accumulated depreciation of the revenue equipment under capital leases recorded by the Company were $<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CapitalLeasedAssetsGross" scale="0" unitRef="usd">2,141,219</ix:nonFraction> and $<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CapitalLeasesLesseeBalanceSheetAssetsByMajorClassAccumulatedDeprecation" scale="0" unitRef="usd">81,035</ix:nonFraction>, respectively.
As of December 31, 2021, carrying value and accumulated depreciation of the revenue equipment under capital leases recorded by the Company
were $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CapitalLeasedAssetsGross" scale="0" unitRef="usd">10,232,895</ix:nonFraction> and $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CapitalLeasesLesseeBalanceSheetAssetsByMajorClassAccumulatedDeprecation" scale="0" unitRef="usd">10,232,895</ix:nonFraction>, respectively.</p></ix:continuation><div>

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

</div><ix:nonNumeric contextRef="c0" continuedAt="_DepositLiabilitiesDisclosuresTextBlock-c0_cont_1" escape="true" name="us-gaap:DepositLiabilitiesDisclosuresTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 10 &#8211; Deposits</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 id="_DepositLiabilitiesDisclosuresTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2022, deposits primarily include
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include payments in total of $<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DepositsAssets" scale="0" unitRef="usd">10,327,872</ix:nonFraction> made in advance to landlord, suppliers, financial institutions and a business alliance for operational
purposes.</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: justify"></p><div>

</div><!-- Field: Page; Sequence: 152; Value: 1 --><div>
    </div><div style="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->21<!-- Field: /Sequence --></p></div><div>
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    </div><!-- Field: /Page --><div>

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

</div><ix:nonNumeric contextRef="c0" continuedAt="_GoodwillDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:GoodwillDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 11 &#8211; Goodwill</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="_GoodwillDisclosureTextBlock-c0_cont_2" id="_GoodwillDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2022, the balance of goodwill
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</div><div>

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</div><div>

</div><ix:continuation id="_GoodwillDisclosureTextBlock-c0_cont_3"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfGoodwillTextBlock"><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
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  </table></ix:nonNumeric></ix:continuation><div>


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

</div><ix:nonNumeric contextRef="c0" continuedAt="_BusinessCombinationDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:BusinessCombinationDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 12 &#8211; Acquisition</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="_BusinessCombinationDisclosureTextBlock-c0_cont_2" id="_BusinessCombinationDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Acquisition of Cheyi BVI</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessCombinationDisclosureTextBlock-c0_cont_3" id="_BusinessCombinationDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 29, 2021 (&#8220;Acquisition Date&#8221;),
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(the &#8220;Cheyi BVI&#8221;) which operates its business through its subsidiary Zhejiang Cheyi Network Technology Co., Ltd. (the &#8220;Cheyi
Network&#8221;), an integrated online car-hailing and driver management services company. Pursuant to the agreement, the total consideration
for the acquisition of <ix:nonFraction contextRef="c88" decimals="2" format="ixt:num-dot-decimal" name="ygmz:EquityOwnershipPercentage" scale="-2" unitRef="pure">100</ix:nonFraction>% equity ownership of Cheyi BVI is an aggregate of U.S. $<ix:nonFraction contextRef="c76" decimals="0" format="ixt:num-dot-decimal" name="ygmz:AggregateValue" scale="0" unitRef="usd">23,470,712</ix:nonFraction>, consisting of the issuance by the Company
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per share) and payment of $<ix:nonFraction contextRef="c77" decimals="0" format="ixt:num-dot-decimal" name="ygmz:EarnoutPayment" scale="0" unitRef="usd">2,000,000</ix:nonFraction> at closing, and Year-2021 earnout payment of U.S. $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="ygmz:EarnoutPayment" scale="0" unitRef="usd">8,826,019</ix:nonFraction> and Year-2022 earnout payment of U.S.
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</div><div>

</div><ix:continuation continuedAt="_BusinessCombinationDisclosureTextBlock-c0_cont_4" id="_BusinessCombinationDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The transaction was accounted for in accordance
with the provisions of ASC 805-10, Business Combinations. The values assigned in these financial statements represent management&#8217;s
best estimate of fair values as of the Acquisition 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="_BusinessCombinationDisclosureTextBlock-c0_cont_5" id="_BusinessCombinationDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As required by ASC 805-20, Business Combinations
&#8211; Identifiable Assets and Liabilities, and Any Noncontrolling Interest, management conducted a review to reassess whether they identified
all the assets acquired and all the liabilities assumed, and followed ASC 805-20&#8217;s measurement procedures for recognition of the
fair value of net assets acquired. According to ASC 820, the fair value hierarchy gives the highest priority to unadjusted quoted prices
in active markets as the most reliable fair value measurement, and the lowest priority to unobservable inputs. According to ASC 820-10-35-41,
the valuation of shares issued in the acquisitions and purchase consideration is recognized on the quoted trading price of the Company&#8217;s
ordinary shares on the date of acquisitions. The quoted closing prices for the Company&#8217;s ordinary shares on NASDAQ on the dates
of the acquisitions of Cheyi BVI was $<ix:nonFraction contextRef="c179" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:SaleOfStockPricePerShare" scale="0" unitRef="usdPershares">2.12</ix:nonFraction> per share.</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="_BusinessCombinationDisclosureTextBlock-c0_cont_6" id="_BusinessCombinationDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table summarizes the allocation
of estimated fair values of net assets acquired and liabilities assumed:</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="_BusinessCombinationDisclosureTextBlock-c0_cont_7" id="_BusinessCombinationDisclosureTextBlock-c0_cont_6"><ix:nonNumeric contextRef="c0" continuedAt="_ScheduleOfBusinessAcquisitionsByAcquisitionTextBlock-c0_cont_1" escape="true" name="us-gaap:ScheduleOfBusinessAcquisitionsByAcquisitionTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
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    <td colspan="2" style="text-align: right">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c182" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentAssetsReceivables" scale="0" unitRef="usd">216,572</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify; padding-left: 9pt">Prepayments</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; padding-left: 9pt">Others receivable</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c182" decimals="0" format="ixt:num-dot-decimal" name="ygmz:OthersReceivable" scale="0" unitRef="usd">4,761,164</ix:nonFraction></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="c182" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedEquipment" scale="0" unitRef="usd">9,980,931</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; padding-left: 9pt">Deferred tax assets</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c182" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedDeferredTaxAssets" scale="0" unitRef="usd">10</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify; padding-left: 9pt">Deposits</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c182" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedFinancialAssets" scale="0" unitRef="usd">595,149</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="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c182" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCashAndEquivalents" scale="0" unitRef="usd">1,647,679</ix:nonFraction></td><td style="text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify; padding-left: 9pt">Accounts and notes payable</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c182" decimals="0" format="ixt:num-dot-decimal" name="ygmz:AccountsAndNotesPayable" scale="0" unitRef="usd">803,784</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: justify; padding-left: 9pt">Others payable and accrued liabilities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c182" decimals="0" format="ixt:num-dot-decimal" name="ygmz:OthersPayableAndAccruedLiabilities" scale="0" unitRef="usd">1,631,610</ix:nonFraction></td><td style="text-align: left">)</td></tr>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c183" decimals="0" format="ixt:num-dot-decimal" name="ygmz:TaxPayable" scale="0" unitRef="usd">1,859,485</ix:nonFraction></td><td style="text-align: left">)</td></tr>
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    <td style="text-align: justify; padding-bottom: 1.5pt; padding-left: 9pt">Capital lease and financing obligations</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="c182" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCapitalLeaseObligation" scale="0" unitRef="usd">2,351,104</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify; padding-bottom: 1.5pt; padding-left: 9pt">Total identifiable net assets</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c182" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedIntangibleAssetsOtherThanGoodwill" scale="0" unitRef="usd">7,836,077</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: justify; padding-left: 9pt">Add: Goodwill</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c182" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:Goodwill" scale="0" unitRef="usd">14,157,570</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="font-weight: bold; text-align: justify; padding-bottom: 1.5pt">Total purchase price for acquisition net of $<ix:nonFraction contextRef="c183" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:CashAcquiredFromAcquisition" scale="0" unitRef="usd">1,477,065</ix:nonFraction> of cash</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c183" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationConsiderationTransferred1" scale="0" unitRef="usd">21,993,647</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessCombinationDisclosureTextBlock-c0_cont_8" id="_BusinessCombinationDisclosureTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company
has included the operating results of Cheyi BVI in its consolidated financial statements since the Acquisition Date. </span>The following
table summarizes the revenue and net income generated by <span>Cheyi BVI</span> for the year ended December
31, 2022:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessCombinationDisclosureTextBlock-c0_cont_9" id="_BusinessCombinationDisclosureTextBlock-c0_cont_8"><ix:nonNumeric contextRef="c0" continuedAt="_ScheduleOfCondensedIncomeStatementTableTextBlock-c0_cont_1" escape="true" name="srt:ScheduleOfCondensedIncomeStatementTableTextBlock"><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><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>

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</div><div>

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companies, and each of the shareholders of the Yinhua.</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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differentiated and customized value-added auto related services to auto insurance companies, where the services include road security
services, car maintenance services, car inspection services and other services. Yinhua develops and operates a comprehensive auto related
service platform for auto insurance companies combining intelligent human-vehicle interaction functions with car owner programs.</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="_BusinessCombinationDisclosureTextBlock-c0_cont_14" id="_BusinessCombinationDisclosureTextBlock-c0_cont_13"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 18, 2022, the parties completed the transaction.
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</div><div>

</div><ix:continuation continuedAt="_BusinessCombinationDisclosureTextBlock-c0_cont_15" id="_BusinessCombinationDisclosureTextBlock-c0_cont_14"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As required by ASC 805-20, Business Combinations
&#8211; Identifiable Assets and Liabilities, and Any Noncontrolling Interest, management conducted a review to reassess whether they identified
all the assets acquired and all the liabilities assumed, and followed ASC 805-20&#8217;s measurement procedures for recognition of the
fair value of net assets acquired. According to ASC 820, the fair value hierarchy gives the highest priority to unadjusted quoted prices
in active markets as the most reliable fair value measurement, and the lowest priority to unobservable inputs. According to ASC 820-10-35-41,
the valuation of shares issued in the acquisitions and purchase consideration is recognized on the quoted trading price of the Company&#8217;s
ordinary shares on the date of acquisitions. The quoted closing prices for the Company&#8217;s ordinary shares on NASDAQ on the dates
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</div><div>

</div><ix:continuation continuedAt="_BusinessCombinationDisclosureTextBlock-c0_cont_16" id="_BusinessCombinationDisclosureTextBlock-c0_cont_15"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table summarizes the allocation
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</div><div>

</div><ix:continuation continuedAt="_BusinessCombinationDisclosureTextBlock-c0_cont_17" id="_BusinessCombinationDisclosureTextBlock-c0_cont_16"><ix:continuation continuedAt="_ScheduleOfBusinessAcquisitionsByAcquisitionTextBlock-c0_cont_2" id="_ScheduleOfBusinessAcquisitionsByAcquisitionTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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  <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="c184" decimals="0" format="ixt:num-dot-decimal" name="ygmz:OthersPayableAndAccruedLiabilities" scale="0" unitRef="usd">7,685,086</ix:nonFraction></td><td style="text-align: left">)</td></tr>
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</div><div>

</div><ix:continuation continuedAt="_BusinessCombinationDisclosureTextBlock-c0_cont_18" id="_BusinessCombinationDisclosureTextBlock-c0_cont_17"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company
has included the operating results of Yinhua in its consolidated financial statements since the Acquisition Date. </span>The following
table summarizes the revenue and net income generated by Yinhua for the year ended December 31, 2022:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessCombinationDisclosureTextBlock-c0_cont_19" id="_BusinessCombinationDisclosureTextBlock-c0_cont_18"><ix:continuation id="_ScheduleOfCondensedIncomeStatementTableTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <td>Net income</td>
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</div><div>

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

</div><!-- Field: Page; Sequence: 154; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:continuation continuedAt="_BusinessCombinationDisclosureTextBlock-c0_cont_20" id="_BusinessCombinationDisclosureTextBlock-c0_cont_19"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Acquisition of Feipeng BVI </span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_BusinessCombinationDisclosureTextBlock-c0_cont_21" id="_BusinessCombinationDisclosureTextBlock-c0_cont_20"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 21, 2022, the Company entered into
a Share Purchase Agreement with Feipeng BVI which provides regional trucking services, and each of the shareholders of the Feipeng BVI,
pursuant to which, among other things and subject to the terms and conditions contained therein, the Company acquired 100% of Feipeng
BVI for approximately $<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedIntangibleAssetsOtherThanGoodwill" scale="0" unitRef="usd">14,540,436</ix:nonFraction>, of which US $<ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AssetsDesignatedToClosedBlockCashAndCashEquivalents" scale="0" unitRef="usd">9,550,000</ix:nonFraction> will be paid in cash upon closing in form of cash. Feipeng BVI shall receive
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</div><div>

</div><ix:continuation continuedAt="_BusinessCombinationDisclosureTextBlock-c0_cont_22" id="_BusinessCombinationDisclosureTextBlock-c0_cont_21"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 21, 2022, the parties completed the
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</div><div>

</div><ix:continuation continuedAt="_BusinessCombinationDisclosureTextBlock-c0_cont_23" id="_BusinessCombinationDisclosureTextBlock-c0_cont_22"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table summarizes the allocation
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</div><div>

</div><ix:continuation continuedAt="_BusinessCombinationDisclosureTextBlock-c0_cont_24" id="_BusinessCombinationDisclosureTextBlock-c0_cont_23"><ix:continuation id="_ScheduleOfBusinessAcquisitionsByAcquisitionTextBlock-c0_cont_2"><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)">
    <td style="width: 88%; text-align: justify">Accounts receivable, net</td><td style="width: 1%">&#160;</td>
    <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c186" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentAssetsReceivables" scale="0" unitRef="usd">3,746,298</ix:nonFraction></td><td style="width: 1%; 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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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify">Accounts payable</td><td>&#160;</td>
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</div><div>

</div><ix:continuation id="_BusinessCombinationDisclosureTextBlock-c0_cont_24"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span>The Company
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_AccountsPayableAndAccruedLiabilitiesDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:AccountsPayableAndAccruedLiabilitiesDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 13 &#8211; Other payables and accrued
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</div><div>

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</div><div>

</div><ix:continuation continuedAt="_AccountsPayableAndAccruedLiabilitiesDisclosureTextBlock-c0_cont_3" id="_AccountsPayableAndAccruedLiabilitiesDisclosureTextBlock-c0_cont_2"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfAccruedLiabilitiesTableTextBlock"><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; background-color: rgb(204,238,255)">
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</div><div>

</div><ix:continuation id="_AccountsPayableAndAccruedLiabilitiesDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Others primarily involve the rental expenses incurred.</p></ix:continuation><div>

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




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

</div><!-- Field: Page; Sequence: 155; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><span style="font-size: 7pt">&#160;</span></p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="ygmz_CreditFacilitiesDisclosureTextBlock-c0_cont_1" escape="true" name="ygmz:CreditFacilitiesDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 14 &#8211; Credit facilities</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="ygmz_CreditFacilitiesDisclosureTextBlock-c0_cont_2" id="ygmz_CreditFacilitiesDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Short-term bank borrowings</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="font-size: 7pt">&#160;</span></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="ygmz_CreditFacilitiesDisclosureTextBlock-c0_cont_3" id="ygmz_CreditFacilitiesDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Outstanding balances of short-term bank borrowings
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</div><div>

</div><ix:continuation continuedAt="ygmz_CreditFacilitiesDisclosureTextBlock-c0_cont_4" id="ygmz_CreditFacilitiesDisclosureTextBlock-c0_cont_3"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfShortTermDebtTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <td style="text-align: left">&#160;</td>
    <td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td>&#160;</td>
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    <td>&#160;</td>
    <td style="vertical-align: bottom; text-align: center"><div style="-sec-ix-hidden: hidden-fact-101">-</div></td>
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    <td style="text-align: left">&#160;</td>
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    <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">&#12288;&#12288;&#12288;-</span></td>
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  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left; padding-left: 1.4pt">Guilin Bank &#12288;</td>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt"><ix:nonNumeric contextRef="c197" name="us-gaap:ShortTermDebtDescription">From April 28, 2022 to April 28, 2023</ix:nonNumeric> &#12288;</td>
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    <td>&#160;</td>
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    <td>&#160;</td>
    <td style="padding-left: 0in; vertical-align: bottom; text-align: center"><ix:nonNumeric contextRef="c197" format="ixt:date-day-monthname-year-en" name="us-gaap:DebtInstrumentIssuanceDate1">28-Apr-23</ix:nonNumeric></td>
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    <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">&#12288;&#12288;&#12288;-</span></td>
    <td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left; padding-left: 1.4pt">Zhejiang Mintai Commercial Bank</td>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt"><ix:nonNumeric contextRef="c199" name="us-gaap:ShortTermDebtDescription">From June 30, 2022 to June 8, 2023</ix:nonNumeric></td>
    <td>&#160;</td>
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    <td>&#160;</td>
    <td style="text-align: left; padding-left: 1.4pt"><ix:nonNumeric contextRef="c199" name="us-gaap:DebtInstrumentDescription">Guarantee by Mr. Dongdong Wang and his Spouse</ix:nonNumeric></td>
    <td>&#160;</td>
    <td style="vertical-align: bottom; text-align: center"><div style="-sec-ix-hidden: hidden-fact-102">-</div></td>
    <td>&#160;</td>
    <td style="text-align: left">&#160;</td>
    <td style="text-align: right"><ix:nonFraction contextRef="c200" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShortTermBorrowings" scale="0" unitRef="usd">289,973</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">-</td>
    <td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left; padding-left: 1.4pt">Zhejiang Tailong Commercial Bank Co., Ltd. &#12288;</td>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt"><ix:nonNumeric contextRef="c201" name="us-gaap:ShortTermDebtDescription">From November 18, 2022 to&#160;&#160;May 17, 2023</ix:nonNumeric> &#12288;</td>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt">Weighted average rate of <ix:nonFraction contextRef="c202" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:DebtWeightedAverageInterestRate" scale="-2" unitRef="pure">6.8</ix:nonFraction>% &#12288;</td>
    <td>&#160;</td>
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    <td>&#160;</td>
    <td style="vertical-align: bottom; text-align: center"><ix:nonNumeric contextRef="c201" format="ixt:date-day-monthname-year-en" name="us-gaap:DebtInstrumentIssuanceDate1">17-May-23</ix:nonNumeric></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">&#12288;&#12288;&#12288;<ix:nonFraction contextRef="c202" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShortTermBorrowings" scale="0" unitRef="usd">376,965</ix:nonFraction></span></td>
    <td style="text-align: left">&#160;</td>
    <td>&#160;</td>
    <td style="text-align: left">&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;&#12288;&#12288;-&#12288;</span></td>
    <td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left; padding-left: 1.4pt">Haifa Baocheng Leasing Co., Ltd.</td>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt"><ix:nonNumeric contextRef="c203" name="us-gaap:ShortTermDebtDescription">From September 2022 to September 2023</ix:nonNumeric></td>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt">Weighted average rate of <ix:nonFraction contextRef="c204" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:DebtWeightedAverageInterestRate" scale="-2" unitRef="pure">8.0</ix:nonFraction>%</td>
    <td>&#160;</td>
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    <td>&#160;</td>
    <td style="vertical-align: bottom; text-align: center"><div style="-sec-ix-hidden: hidden-fact-103">-</div></td>
    <td>&#160;</td>
    <td style="text-align: left">&#160;</td>
    <td style="text-align: right"><ix:nonFraction contextRef="c204" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShortTermBorrowings" scale="0" unitRef="usd">1,273,857</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">-</td>
    <td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-left: 1.4pt; vertical-align: top">Bank of China</td>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt"><ix:nonNumeric contextRef="c205" name="us-gaap:ShortTermDebtDescription">From January 3, 2022 to January 3, 2023</ix:nonNumeric></td>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt">Weighted average rate of <ix:nonFraction contextRef="c206" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:DebtWeightedAverageInterestRate" scale="-2" unitRef="pure">3.65</ix:nonFraction>%</td>
    <td>&#160;</td>
    <td style="text-align: left; padding-left: 1.4pt"><ix:nonNumeric contextRef="c205" name="us-gaap:DebtInstrumentDescription">Guarantee by Mr. Lihui Wang</ix:nonNumeric></td>
    <td>&#160;</td>
    <td style="vertical-align: bottom; text-align: center"><ix:nonNumeric contextRef="c205" format="ixt:date-day-monthname-year-en" name="us-gaap:DebtInstrumentIssuanceDate1">3-Jan-23</ix:nonNumeric></td>
    <td>&#160;</td>
    <td style="text-align: left">&#160;</td>
    <td style="text-align: right"><ix:nonFraction contextRef="c206" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShortTermBorrowings" scale="0" unitRef="usd">289,973</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">-</td>
    <td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left; padding-left: 1.4pt">Bank of China &#12288;</td>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt"><ix:nonNumeric contextRef="c207" name="us-gaap:ShortTermDebtDescription">From September 2022 to September 2023</ix:nonNumeric> &#12288;</td>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt">Weighted average rate of <ix:nonFraction contextRef="c208" decimals="4" format="ixt:num-dot-decimal" name="us-gaap:DebtWeightedAverageInterestRate" scale="-2" unitRef="pure">3.65</ix:nonFraction>% &#12288;</td>
    <td>&#160;</td>
    <td style="text-align: left; padding-left: 1.4pt"><ix:nonNumeric contextRef="c207" name="us-gaap:DebtInstrumentDescription">Guarantee by Mr. Lihui Wang</ix:nonNumeric></td>
    <td>&#160;</td>
    <td style="vertical-align: bottom; text-align: center"><div style="-sec-ix-hidden: hidden-fact-104">-</div></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">&#12288;&#12288;&#12288;<ix:nonFraction contextRef="c208" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShortTermBorrowings" scale="0" unitRef="usd">1,159,891</ix:nonFraction></span></td>
    <td style="text-align: left">&#160;</td>
    <td>&#160;</td>
    <td style="text-align: left">&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;&#12288;&#12288;-&#12288;</span></td>
    <td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left; padding-left: 1.4pt">China Construction Bank</td>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt"><ix:nonNumeric contextRef="c209" name="us-gaap:ShortTermDebtDescription">From June 4, 2022 to June 4, 2023</ix:nonNumeric></td>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt">Weighted average rate of <ix:nonFraction contextRef="c210" decimals="6" format="ixt:num-dot-decimal" name="us-gaap:DebtWeightedAverageInterestRate" scale="-2" unitRef="pure">3.8525</ix:nonFraction>%</td>
    <td>&#160;</td>
    <td style="padding-left: 1.4pt"><ix:nonNumeric contextRef="c209" name="us-gaap:DebtInstrumentDescription">None</ix:nonNumeric></td>
    <td>&#160;</td>
    <td style="vertical-align: bottom; text-align: center"><div style="-sec-ix-hidden: hidden-fact-105">-</div></td>
    <td>&#160;</td>
    <td style="text-align: left">&#160;</td>
    <td style="text-align: right"><ix:nonFraction contextRef="c210" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShortTermBorrowings" scale="0" unitRef="usd">434,959</ix:nonFraction></td>
    <td style="text-align: left">&#160;</td>
    <td>&#160;</td>
    <td style="text-align: left">&#160;</td>
    <td style="text-align: right">-</td>
    <td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left; padding-left: 1.4pt">Hangzhou United Rural Commercial Bank Co., Ltd. &#12288;</td>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt"><ix:nonNumeric contextRef="c211" name="us-gaap:ShortTermDebtDescription">From November 11, 2021 to November 5, 2022</ix:nonNumeric> &#12288;</td>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt">Weighted average rate of <ix:nonFraction contextRef="c212" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:DebtWeightedAverageInterestRate" scale="-2" unitRef="pure">6.8</ix:nonFraction>% &#12288;</td>
    <td>&#160;</td>
    <td style="text-align: left; padding-left: 1.4pt"><ix:nonNumeric contextRef="c211" name="us-gaap:DebtInstrumentDescription">Guarantee by Mr. Dongdong Wang and his Spouse</ix:nonNumeric></td>
    <td>&#160;</td>
    <td style="vertical-align: bottom; text-align: center"><ix:nonNumeric contextRef="c211" format="ixt:date-day-monthname-year-en" name="us-gaap:DebtInstrumentIssuanceDate1">5-Nov-22</ix:nonNumeric></td>
    <td>&#160;</td>
    <td style="text-align: left">$</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">-&#12288;</span></td>
    <td style="text-align: left">&#160;</td>
    <td>&#160;</td>
    <td style="text-align: left">$</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;&#12288; <ix:nonFraction contextRef="c213" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShortTermBorrowings" scale="0" unitRef="usd">156,922</ix:nonFraction></span></td>
    <td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left; padding-left: 1.4pt">Hangzhou United Rural Commercial Bank Co., Ltd. &#12288;</td>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt"><ix:nonNumeric contextRef="c214" name="us-gaap:ShortTermDebtDescription">From September 23, 2021 to September 22, 2022</ix:nonNumeric> &#12288;</td>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt">Weighted average rate of <ix:nonFraction contextRef="c215" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:DebtWeightedAverageInterestRate" scale="-2" unitRef="pure">5.8</ix:nonFraction>% &#12288;</td>
    <td>&#160;</td>
    <td style="text-align: left; padding-left: 1.4pt"><ix:nonNumeric contextRef="c214" name="us-gaap:DebtInstrumentDescription">Guarantee by Mr. Dongdong Wang and his Spouse</ix:nonNumeric></td>
    <td></td>
    <td style="vertical-align: bottom; text-align: center"><ix:nonNumeric contextRef="c214" format="ixt:date-day-monthname-year-en" name="us-gaap:DebtInstrumentIssuanceDate1">22-Sep-22</ix:nonNumeric></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">&#12288;&#12288;&#12288;-&#12288;</span></td>
    <td style="text-align: left">&#160;</td>
    <td>&#160;</td>
    <td style="text-align: left">&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;&#12288;&#12288;<ix:nonFraction contextRef="c216" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShortTermBorrowings" scale="0" unitRef="usd">78,461</ix:nonFraction></span></td>
    <td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left; padding-left: 1.4pt">Hangzhou United Rural Commercial Bank Co., Ltd. &#12288;</td>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt"><ix:nonNumeric contextRef="c217" name="us-gaap:ShortTermDebtDescription">From September 16, 2021 to September 15, 2022</ix:nonNumeric> &#12288;</td>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt">Weighted average rate of <ix:nonFraction contextRef="c218" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:DebtWeightedAverageInterestRate" scale="-2" unitRef="pure">5.8</ix:nonFraction>% &#12288;</td>
    <td>&#160;</td>
    <td style="text-align: left; padding-left: 1.4pt"><ix:nonNumeric contextRef="c217" name="us-gaap:DebtInstrumentDescription">Guarantee by Mr. Dongdong Wang and his Spouse</ix:nonNumeric></td>
    <td>&#160;</td>
    <td style="vertical-align: bottom; text-align: center"><span style="-sec-ix-hidden: hidden-fact-106">15-Sep-22</span></td>
    <td>&#160;</td>
    <td style="text-align: left">&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;&#12288;&#12288;-&#12288;</span></td>
    <td style="text-align: left">&#160;</td>
    <td>&#160;</td>
    <td style="text-align: left">&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;&#12288;&#12288;<ix:nonFraction contextRef="c219" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShortTermBorrowings" scale="0" unitRef="usd">78,461</ix:nonFraction></span></td>
    <td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left; padding-left: 1.4pt">Hangzhou United Rural Commercial Bank Co., Ltd. &#12288;</td>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt"><ix:nonNumeric contextRef="c220" name="us-gaap:ShortTermDebtDescription">From July 14, 2021 to January 13, 2022</ix:nonNumeric> &#12288;</td>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt">Weighted average rate of <ix:nonFraction contextRef="c221" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:DebtWeightedAverageInterestRate" scale="-2" unitRef="pure">5.5</ix:nonFraction>% &#12288;</td>
    <td>&#160;</td>
    <td style="text-align: left; padding-left: 1.4pt"><ix:nonNumeric contextRef="c220" name="us-gaap:DebtInstrumentDescription">Guarantee by Mr. Dongdong Wang and his Spouse</ix:nonNumeric></td>
    <td>&#160;</td>
    <td style="vertical-align: bottom; text-align: center"><span style="-sec-ix-hidden: hidden-fact-107">13-Jan-22</span></td>
    <td>&#160;</td>
    <td style="text-align: left">&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;&#12288;&#12288;-&#12288;</span></td>
    <td style="text-align: left">&#160;</td>
    <td>&#160;</td>
    <td style="text-align: left">&#160;</td>
    <td style="text-align: right"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;&#12288;&#12288;<ix:nonFraction contextRef="c222" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ShortTermBorrowings" scale="0" unitRef="usd">78,461</ix:nonFraction></span></td>
    <td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left; padding-left: 1.4pt">Hangzhou United Rural Commercial Bank Co., Ltd. &#12288;</td>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt"><ix:nonNumeric contextRef="c223" name="us-gaap:ShortTermDebtDescription">From June 29, 2021 to January 13, 2022</ix:nonNumeric> &#12288;</td>
    <td>&#160;</td>
    <td style="vertical-align: top; text-align: center; padding-left: 1.4pt">Weighted average rate of <ix:nonFraction contextRef="c224" decimals="3" format="ixt:num-dot-decimal" name="us-gaap:DebtWeightedAverageInterestRate" scale="-2" unitRef="pure">5.5</ix:nonFraction>% &#12288;</td>
    <td>&#160;</td>
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    <td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>




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

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

</div><ix:continuation continuedAt="ygmz_CreditFacilitiesDisclosureTextBlock-c0_cont_5" id="ygmz_CreditFacilitiesDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Long-term bank borrowings</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

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</div><div>

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    <td style="vertical-align: top; width: 28%; text-align: left">WeBank Co., Ltd.</td><td style="width: 1%">&#160;</td>
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    <td style="width: 11%; text-align: left"><ix:nonNumeric contextRef="c240" name="us-gaap:DebtInstrumentDescription">Guarantee by Mr. Jinlong Yang and MingZhu Logistics.</ix:nonNumeric></td><td style="width: 1%">&#160;</td>
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    <td style="padding-bottom: 1.5pt"><span style="-sec-ix-hidden: hidden-fact-116">-</span></td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="vertical-align: top; text-align: center; padding-bottom: 1.5pt">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: center; padding-bottom: 1.5pt; vertical-align: top">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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</div><div>

</div><ix:continuation continuedAt="ygmz_CreditFacilitiesDisclosureTextBlock-c0_cont_8" id="ygmz_CreditFacilitiesDisclosureTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The maturities schedule of long-term bank borrowings
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</div><div>

</div><ix:continuation continuedAt="ygmz_CreditFacilitiesDisclosureTextBlock-c0_cont_9" id="ygmz_CreditFacilitiesDisclosureTextBlock-c0_cont_8"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfDebtTableTextBlock"><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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</div><div>

</div><ix:continuation continuedAt="ygmz_CreditFacilitiesDisclosureTextBlock-c0_cont_10" id="ygmz_CreditFacilitiesDisclosureTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Interest expenses incurred from long-term bank
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</div><div>

</div><ix:continuation continuedAt="ygmz_CreditFacilitiesDisclosureTextBlock-c0_cont_11" id="ygmz_CreditFacilitiesDisclosureTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Loans from other financial institutions</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="ygmz_CreditFacilitiesDisclosureTextBlock-c0_cont_12" id="ygmz_CreditFacilitiesDisclosureTextBlock-c0_cont_11"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Outstanding balances of loans from other financial
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</div><div>

</div><ix:continuation continuedAt="ygmz_CreditFacilitiesDisclosureTextBlock-c0_cont_13" id="ygmz_CreditFacilitiesDisclosureTextBlock-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The outstanding balances and maturities schedule
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</div><div>

</div><ix:continuation id="ygmz_CreditFacilitiesDisclosureTextBlock-c0_cont_13"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfMaturitiesOfLongTermDebtTableTextBlock"><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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  </table></ix:nonNumeric></ix:continuation><div>

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




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

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

</div><ix:nonNumeric contextRef="c0" continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:VariableInterestEntityDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Note 15 &#8211; Variable Interest Entity</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="_VariableInterestEntityDisclosureTextBlock-c0_cont_2" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Variable interest entities (&#8220;VIEs&#8221;)
are entities in which equity investors lack the characteristics of a controlling financial interest.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_3" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Cheyi Network</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_4" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Cheyi BVI, which is acquired by the Company
on December 29, 2021, operates business mainly through its variable interest entities (&#8220;VIE&#8221;) in the PRC, based on a series
of contractual arrangements (collectively the &#8220;VIE Agreements&#8221;). <span style="font-family: Times New Roman, Times, Serif">As
a result of the VIE</span> Agreements <span style="font-family: Times New Roman, Times, Serif">that our </span>Ningbo Cheyi Corporate
Information Consulting Co., Ltd. (&#8220;Cheyi WFOE&#8221;) <span style="font-family: Times New Roman, Times, Serif">entered with Zhejiang
</span>Cheyi Network Technology Co., Ltd. (&#8220;Cheyi Network&#8221;)<span style="font-family: Times New Roman, Times, Serif">, and
its shareholders, the control and benefits of </span>Cheyi Network <span style="font-family: Times New Roman, Times, Serif">were accrued
to us subject to the conditions that we have satisfied for consolidation of </span>Cheyi Network <span style="font-family: Times New Roman, Times, Serif">and
its subsidiaries under U.S. GAAP. Such conditions include that (i) we control </span>Cheyi Network <span style="font-family: Times New Roman, Times, Serif">through
power to govern the activities which most significantly impact </span>Cheyi Network<span style="font-family: Times New Roman, Times, Serif">&#8217;s
economic performance, (ii) we are contractually obligated to absorb losses of </span>Cheyi Network <span style="font-family: Times New Roman, Times, Serif">that
could potentially be significant to </span>Cheyi Network<span style="font-family: Times New Roman, Times, Serif">, and (iii) we are entitled
to receive benefits from </span>Cheyi Network <span style="font-family: Times New Roman, Times, Serif">that could potentially be significant
to</span> Cheyi Network<span style="font-family: Times New Roman, Times, Serif">. We are regarded as the primary beneficiary of </span>Cheyi
Network <span style="font-family: Times New Roman, Times, Serif">and its subsidiaries, and </span>Cheyi Network <span style="font-family: Times New Roman, Times, Serif">and
its subsidiaries are treated as our consolidated affiliated entity under U.S. GAAP. We have consolidated the financial results of </span>Cheyi
Network <span style="font-family: Times New Roman, Times, Serif">and its subsidiaries in our consolidated financial statements for accounting
purposes in accordance with U.S. GAAP. </span>&#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="_VariableInterestEntityDisclosureTextBlock-c0_cont_5" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company believes that Cheyi Network is considered
a VIE under Accounting Codification Standards (&#8220;ASC&#8221;) 810 &#8220;Consolidation&#8221;, because the equity investors in Cheyi
Network no longer have the characteristics of a controlling financial interest, and the Company, through Cheyi WFOE, is the primary beneficiary
of Cheyi Network and controls Cheyi Network&#8217;s operations. Accordingly, Cheyi Network has been consolidated as a deemed subsidiary
into the Company as a reporting company under ASC 810.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_6" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As required by ASC 810-10, the Company performs
a qualitative assessment to determine whether the Company is the primary beneficiary of Cheyi Network which is identified as a VIE of
the Company. A quality assessment begins with an understanding of the nature of the risks in the entity as well as the nature of the entity&#8217;s
activities including terms of the contracts entered into by the entity, ownership interests issued by the entity and the parties involved
in the design of the entity. The Company&#8217;s assessment of the involvement with Cheyi Network reveals that the Company has the absolute
power to direct the most significant activities that impact the economic performance of Cheyi Network. Cheyi WFOE is obligated to absorb
a majority of the loss from Cheyi Network activities and receive a majority of Cheyi Network&#8217;s expected residual returns. In addition,
Cheyi Network&#8217;s shareholders have pledged their equity interest in Cheyi Network to Jianzhi Beijing, irrevocably granted Cheyi WFOE
an exclusive option to purchase, to the extent permitted under PRC Law, all or part of the equity interests in Cheyi Network and agreed
to entrust all the rights to exercise their voting power to the person(s) appointed by Cheyi WFOE. Under the accounting guidance, the
Company is deemed to be the primary beneficiary of Cheyi Network and the financial positions, the operating results and cash flows of
Cheyi Network and Cheyi Network&#8217;s subsidiaries are consolidated in the Company for financial reporting 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="_VariableInterestEntityDisclosureTextBlock-c0_cont_7" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following is a summary of VIE Agreements by
and among Cheyi Network, a subsidiary of Cheyi BVI, <span style="font-family: Times New Roman, Times, Serif">Cheyi WFOE</span> and the
shareholders of Cheyi BVI. Each of the VIE Agreements is described in detail below:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_8" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Master Exclusive Service Agreement</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_9" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under the Master Exclusive Service Agreement dated
November 24, 2021, Cheyi WFOE has agreed to provide the following services (among others) to Cheyi Network:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_10" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_9"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_11" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_10"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_12" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_11"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_13" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_12"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_14" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_13"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_15" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_14"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_16" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_15"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_17" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_16"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_18" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_17"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_19" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_18"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_20" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_19"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This agreement was effective from November 24,
2021 and will continue to be effective unless it is terminated by written notice of Cheyi.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>




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

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

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_21" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_20"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Business Cooperation Agreement</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_22" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_21"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under the Business Cooperation Agreement entered
into by Cheyi WFOE, Cheyi Network and the shareholders of Cheyi Network, dated November 24, 2021, all parties agreed that without obtaining
Cheyi WFOE &#8217;s prior written consent, Cheyi shall not, and each of the Cheyi Network and shareholders of Cheyi Network shall cause
each of Cheyi Network and its subsidiaries not to, engage in any transaction which may materially affect its asset obligation right or
operation. Furthermore, Cheyi Network shall and shareholders of Cheyi Network shall cause Cheyi and its subsidiaries to accept suggestions
raised by Cheyi WFOE over the employee engagement and replacement, daily operation, dividend distribution and financial management systems
of Cheyi Network and its subsidiaries and Cheyi Network and its subsidiaries shall strictly abide by and perform accordingly.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>


</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_23" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_22"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Equity Interest Pledge Agreement</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_24" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_23"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The shareholders of Cheyi Network entered into
an Equity Pledge Interest Agreement with Cheyi WFOE, dated November 24, 2021. Under such equity pledge agreement, each of the shareholders
of Cheyi Network pledged its respective equity interest in Cheyi Network to Cheyi WFOE to secure such shareholder&#8217;s obligations
under the Exclusive Option Agreement, Proxy Agreement, Master Exclusive Service Agreement, and Letter of Confirmation and Undertaking.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_25" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_24"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Each of such shareholders further agreed not to
transfer or pledge his or her respective equity interest in Cheyi Network without the prior written consent of Cheyi WFOE. The equity
pledge agreement will remain effective until the shareholders fulfill their obligations and Cheyi WFOE discharges all the shareholders&#8217;
obligations under these VIE Agreements in writing.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_26" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_25"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Exclusive Option Agreement</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_27" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_26"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under the Exclusive Option Agreement entered into
by Cheyi WFOE, Cheyi Network and the shareholders of Cheyi Network, dated November 24, 2021, the shareholders of Cheyi Network granted
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</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_28" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_27"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Each of shareholders of Cheyi Network agreed that,
as of the effective date of this agreement, but before the transfer of all or part of the Cheyi Network&#8217;s equity interest to Cheyi
Network WFOE, if the shareholders obtain dividends, bonuses or residual property from Cheyi Network, the shareholders shall transfer all
the income (after tax) to Cheyi WFOE.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_29" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_28"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The exclusive option agreement shall remain in
effect until all of the equity interests in or assets of Cheyi Network have been acquired by Cheyi WFOE or its designee, and upon the
condition that Cheyi WFOE and its subsidiaries, branches can engage in the business of Cheyi Network legally.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_30" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_29"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Cheyi WFOE has the right to unilaterally terminate
this agreement immediately by sending written notices to Cheyi Network and the shareholders of Cheyi Network at any time without liability
for the breach. Unless otherwise mandatory by Chinese law, Cheyi Network and its shareholders has no right to unilaterally terminate this
agreement.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_31" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_30"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Proxy Agreement</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_32" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_31"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under the Proxy Agreement among Cheyi WFOE, Cheyi
Network and the shareholders of Cheyi Network, dated November 24, 2021, each of the shareholders of Cheyi Network has agreed to irrevocably
entrust Cheyi WFOE or its designee to represent it to exercise all the shareholders&#8217; rights to which it is entitled as a shareholder
of Cheyi Network.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_33" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_32"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Proxy Agreement is irrevocable and shall remain effective until
upon the instruction of Cheyi WFOE.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_34" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_33"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Letter of Confirmation and Undertaking</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_35" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_34"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Each shareholder of Cheyi Network had signed a
Letter of Confirmation and Undertaking. Under the Letter of Confirmation and Undertaking, each shareholder of Cheyi Network confirmed
undertake and warrant that his or her successor, guardian, creditor, spouse or any other person that may be entitled to assume rights
and interests in the equity interest of Cheyi Network held by him or her upon his or her death incapacity, divorce or any circumstances
that may affect his or her ability to exercise rights of shareholder in Cheyi Network will not, in any manner and under any circumstances,
take any action that may affect or hinder the fulfillment of his or her obligations under each of the Master Exclusive Service Agreement,
the Business Cooperation Agreement, the Proxy Agreement, the Exclusive Option Agreement, and the Equity Interest Pledge Agreement executed
by him or her on November 24, 2021.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

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

</div><!-- Field: Page; Sequence: 159; Value: 1 --><div>
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_36" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_35"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company believes that the contractual arrangements
with its VIE and their respective shareholders are in compliance with PRC laws and regulations and are legally enforceable. On March 15,
2019, the National People&#8217;s Congress approved the Foreign Investment Law, effective on January 1, 2020. The Foreign Investment Law
has a catch-all provision under the definition of &#8220;foreign investment&#8221; which includes investments made by foreign investors
in China through means stipulated in laws or administrative regulations or other methods prescribed by the State Council. In the event
that the State Council in the future promulgates laws and regulations that deem investments made by foreign investors through contractual
arrangements as &#8220;foreign investment,&#8221; the Group&#8217;s ability to use the contractual arrangements with its VIEs and the
Group&#8217;s ability to conduct business through the VIEs could be severely limited. However, uncertainties in the PRC legal system could
limit the Company&#8217;s ability to enforce the contractual arrangements. If the legal structure and contractual arrangements were found
to be in violation of PRC laws and regulations, the PRC government could:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_37" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_36"><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: 24px">&#160;</td>
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</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_38" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_37"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_39" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_38"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_40" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_39"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_41" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_40"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_42" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_41"><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: 24px">&#9679;</td>
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</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_43" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_42"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&#8217;s ability to conduct its car-hailing
and driver management services business that specializes in car-hailing and driver management services s may be negatively affected if
the PRC government was to carry out any aforementioned actions.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_44" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_43"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Zhisheng</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_45" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_44"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Yinhua, which is acquired
by the Company on March 14, 2022, operates business mainly through its variable interest entities (&#8220;VIE&#8221;) in the PRC, based
on a series of contractual arrangements (collectively the &#8220;VIE Agreements&#8221;). As a result of the VIE Agreements that our Zhejiang
Caiyunlian Technology Co., Ltd. (&#8220;Yinhua WFOE&#8221;) entered with Hainan Zhisheng Car Services Co., Ltd. (&#8220;Zhisheng&#8221;),
and its shareholders, the control and benefits of Zhisheng were accrued to us subject to the conditions that we have satisfied for consolidation
of Zhisheng under U.S. GAAP. Such conditions include that (i) we control Zhisheng through power to govern the activities which most significantly
impact Zhisheng&#8217;s economic performance, (ii) we are contractually obligated to absorb losses of Zhisheng that could potentially
be significant to Zhisheng, and (iii) we are entitled to receive benefits from Cheyi Network that could potentially be significant to
Zhisheng. We are regarded as the primary beneficiary of Zhisheng, and Zhisheng is treated as our consolidated affiliated entity under
U.S. GAAP. We have consolidated the financial results of Zhisheng in our consolidated financial statements for accounting purposes in
accordance with U.S. GAAP.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_46" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_45"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following is a summary
of VIE Agreements by and among Zhisheng, a subsidiary of Yinhua, Yinhua WFOE and the shareholders of Yinhua. Each of the VIE Agreements
is described in detail below:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><i>&#160;</i></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_47" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_46"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Master Exclusive Service
Agreement</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_48" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_47"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under the Master Exclusive
Service Agreement dated January 22, 2022, Yinhua WFOE has agreed to provide the following services (among others) to Zhisheng:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_49" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_48"><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"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">information consulting services regarding the business operation
of Service Receiving Parties;</td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_50" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_49"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_51" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_50"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_52" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_51"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_53" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_52"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_54" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_53"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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platforms;</td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_55" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_54"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_56" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_55"><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"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">mid or short-term market development and market planning
services;</td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_57" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_56"><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"></td><td style="width: 0.25in; text-align: left">&#9679;</td><td style="text-align: justify">human resource management and internal information management;</td>
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</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_58" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_57"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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of network system, hardware and database design, and/or other services determined from time to time by Zhisheng according to the need
of business and capacity of the Yinhua WFOE.</td>
</tr></table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p></ix:continuation><div>
</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_59" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_58"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This agreement was effective
from January 22, 2022 and will continue to be effective unless it is terminated by written notice of Zhisheng.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><i>&#160;</i></p></ix:continuation><div>

</div><div>




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

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

</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_60" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_59"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt"><i>Business Cooperation Agreement</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_61" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_60"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt">Under the Exclusive Option
Agreement entered into by Yinhua WFOE, Zhisheng and the shareholders of Zhisheng, dated January 22, 2022, all parties agreed that without
obtaining Yinhua WFOE &#8217;s prior written consent, Zhisheng shall not, and each of the Zhisheng and shareholders of Zhisheng shall
cause each of Zhisheng and its subsidiaries not to, engage in any transaction which may materially affect its asset obligation right or
operation. Furthermore, Zhisheng shall and shareholders of Zhisheng shall cause Zhisheng and its subsidiaries to accept suggestions raised
by Yinhua WFOE over the employee engagement and replacement, daily operation, dividend distribution and financial management systems of
Zhisheng and its subsidiaries and Zhisheng and its subsidiaries shall strictly abide by and perform accordingly.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt">&#160;</p></ix:continuation><div>

</div><div>


</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_62" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_61"><p style="font: 10pt Times New Roman, Times, Serif; text-indent: 0pt; margin: 0pt"><i>Equity Interest Pledge Agreement</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt"><i>&#160;</i></p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_63" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_62"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt">The shareholders of Zhisheng
entered into an Equity Pledge Interest Agreement with Yinhua WFOE, dated January 22, 2022. Under such equity pledge agreement, each of
the shareholders of Zhisheng pledged its respective equity interest in Zhisheng to Yinhua WFOE to secure such shareholder&#8217;s obligations
under the Exclusive Option Agreement, Proxy Agreement, Master Exclusive Service Agreement, and Letter of Confirmation and Undertaking.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_64" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_63"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt">Each of such shareholders further
agreed not to transfer or pledge his or her respective equity interest in Zhisheng without the prior written consent of Yinhua WFOE. The
equity pledge agreement will remain effective until the shareholders fulfill their obligations and Yinhua WFOE discharges all the shareholders&#8217;
obligations under these VIE Agreements in writing.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_65" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_64"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt"><i>Exclusive Option Agreement</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_66" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_65"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt">Under the Exclusive Option
Agreement entered into by Yinhua WFOE, Zhisheng and the shareholders of Zhisheng, dated January 22, 2022, the shareholders of Zhisheng
granted Yinhua WFOE or its designee an option to purchase all or a portion of their respective equity interest in Zhisheng for the RMB
<ix:nonFraction contextRef="c255" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:TemporaryEquityAccretionOfInterest" scale="0" unitRef="cny">1</ix:nonFraction>.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_67" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_66"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt">Each of shareholders of Zhisheng
agreed that, as of the effective date of this agreement, but before the transfer of all or part of the Zhisheng&#8217;s equity interest
to Yinhua WFOE, if the shareholders obtain dividends, bonuses or residual property from Zhisheng, the shareholders shall transfer all
the income (after tax) to Yinhua WFOE.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_68" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_67"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt">The exclusive option agreement
shall remain in effect until all of the equity interests in or assets of Zhisheng have been acquired by Yinhua WFOE or its designee, and
upon the condition that Yinhua WFOE and its subsidiaries, branches can engage in the business of Zhisheng legally.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_69" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_68"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt">Yinhua WFOE has the right to
unilaterally terminate this agreement immediately by sending written notices to Zhisheng and the shareholders of Zhisheng at any time
without liability for the breach. Unless otherwise mandatory by Chinese law, Zhisheng and its shareholders has no right to unilaterally
terminate this agreement.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_70" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_69"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt"><i>Proxy Agreement</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_71" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_70"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under the Proxy Agreement among
Yinhua WFOE, Zhisheng and the shareholders of Zhisheng, dated January 22, 2022, each of the shareholders of Zhisheng has agreed to irrevocably
entrust Yinhua WFOE or its designee to represent it to exercise all the shareholders&#8217; rights to which it is entitled as a shareholder
of Zhisheng.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_72" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_71"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Proxy Agreement is irrevocable
and shall remain effective until upon the instruction of Yinhua WFOE.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_73" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_72"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt"><i>Letter of Confirmation and
Undertaking</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_74" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_73"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Each shareholder of Zhisheng
had signed a Letter of Confirmation and Undertaking. Under the Letter of Confirmation and Undertaking, each shareholder of Zhisheng confirmed
undertake and warrant that his or her successor, guardian, creditor, spouse or any other person that may be entitled to assume rights
and interests in the equity interest of Zhisheng held by him or her upon his or her death incapacity, divorce or any circumstances that
may affect his or her ability to exercise rights of shareholder in Zhisheng will not, in any manner and under any circumstances, take
any action that may affect or hinder the fulfillment of his or her obligations under each of the Master Exclusive Service Agreement, the
Business Cooperation Agreement, the Proxy Agreement, the Exclusive Option Agreement, and the Equity Interest Pledge Agreement executed
by him or her on January 22, 2022.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_75" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_74"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt"><i>Consent Letter</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_76" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_75"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Each spouse of shareholder
of Zhisheng had signed a Consent letter. Under Consent Letter, each spouse of shareholder of Zhisheng confirm and agree that the equity
interest in the Zhisheng held by each shareholder of Zhisheng is her or his individual property not the joint property, which each shareholder
of Zhisheng is entitled to dispose of on her or his own.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&#160;</p></ix:continuation><div>

</div><div>

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

</div><!-- Field: Page; Sequence: 161; 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: 36pt">&#160;</p><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_77" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_76"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&#8217;s ability to conduct its car
owner services business that specializes in car owner services may be negatively affected if the PRC government was to carry out any aforementioned
actions.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_78" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_77"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt -0.5in; text-align: justify; text-indent: 0.5in"><span style="text-decoration:underline">Feipeng</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_79" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_78"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Feipeng BVI, which is
acquired by the Company on December 21, 2022, operates business mainly through its variable interest entities (&#8220;VIE&#8221;) in the
PRC, based on a series of contractual arrangements (collectively the &#8220;VIE Agreements&#8221;). As a result of the VIE Agreements
that our Shenzhen Feipeng Zongheng Supply Chain Management Co., Ltd. (&#8220;Feipeng WFOE&#8221;) entered with Xinjiang Feipeng Logistics
Co., Ltd. (&#8220;Feipeng&#8221;), and its shareholders, the control and benefits of Feipeng were accrued to us subject to the conditions
that we have satisfied for consolidation of Feipeng under U.S. GAAP. Such conditions include that (i) we control Feipeng through power
to govern the activities which most significantly impact Feipeng&#8217;s economic performance, (ii) we are contractually obligated to
absorb losses of Feipeng that could potentially be significant to Feipeng, and (iii) we are entitled to receive benefits from Feipeng
that could potentially be significant to Feipeng. We are regarded as the primary beneficiary of Feipeng, and Feipeng is treated as our
consolidated affiliated entity under U.S. GAAP. We have consolidated the financial results of Feipeng in our consolidated financial statements
for accounting purposes in accordance with U.S. GAAP.</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="_VariableInterestEntityDisclosureTextBlock-c0_cont_80" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_79"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following is a summary
of VIE Agreements by and among Feipeng, a subsidiary of Feipeng BVI, Feipeng WFOE and the shareholders of Feipeng BVI. Each of the VIE
Agreements is described in detail below:</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><i>&#160;</i></p></ix:continuation><div>

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</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_81" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_80"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt"><i>Master Exclusive Service
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each of Feipeng and its subsidiaries not to, engage in any transaction which may materially affect its asset obligation right or operation.
Furthermore, Feipeng shall and shareholders of Feipeng shall cause Feipeng and its subsidiaries to accept suggestions raised by Feipeng
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</div><div>

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</div><div>

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</div><div>

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</div><div>

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without liability for the breach. Unless otherwise mandatory by Chinese law, Feipeng and its shareholders has no right to unilaterally
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among Feipeng WFOE, Feipeng and the shareholders of Feipeng, dated December 20, 2022, each of the shareholders of Feipeng has agreed to
irrevocably entrust Feipeng WFOE or its designee to represent it to exercise all the shareholders&#8217; rights to which it is entitled
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</div><div>

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undertake and warrant that his or her successor, guardian, creditor, spouse or any other person that may be entitled to assume rights
and interests in the equity interest of Feipeng held by him or her upon his or her death incapacity, divorce or any circumstances that
may affect his or her ability to exercise rights of shareholder in Feipeng will not, in any manner and under any circumstances, take any
action that may affect or hinder the fulfillment of his or her obligations under each of the Master Exclusive Service Agreement, the Business
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</div><div>

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</div><div>

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</div><div>

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

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income as well as the cash flow from operating, investing and financing activities presented on the consolidated statement of cash flows
are consolidation of the financial position, operation and cash flow of the Company&#8217;s subsidiaries, VIE and VIE&#8217;s subsidiaries.
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</div><div>

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</div><div>

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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <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: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">$</td><td style="text-align: right"><ix:nonFraction contextRef="c257" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LongTermDebtNoncurrent" scale="0" unitRef="usd">3,825,617</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="c257" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NotesPayableCurrent" scale="0" unitRef="usd">6,509,409</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="c258" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NotesPayableCurrent" scale="0" unitRef="usd">803,784</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: 9pt">Other payables and accrued liabilities</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c257" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:AccountsPayableAndOtherAccruedLiabilitiesCurrent" scale="0" unitRef="usd">4,194,169</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="c257" decimals="0" format="ixt:num-dot-decimal" name="ygmz:AmountDueToRelatedParties1" scale="0" unitRef="usd">5,958,665</ix:nonFraction></td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c257" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:TaxesPayableCurrent" scale="0" unitRef="usd">4,174,642</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; text-indent: -9pt; padding-left: 9pt">Current portion of capital lease and financing obligations</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c257" decimals="0" format="ixt:num-dot-decimal" name="ygmz:CurrentMaturitiesOfLoansFromOtherFinancialInstitutions" scale="0" unitRef="usd">704,504</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-134">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -9pt; padding-left: 9pt">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; text-indent: -9pt; padding-left: 9pt">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; background-color: rgb(204,238,255)">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c257" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LongTermDebt" scale="0" unitRef="usd">1,158,642</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="c258" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LongTermDebt" scale="0" unitRef="usd">2,351,104</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">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="c257" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:LiabilitiesNoncurrent" scale="0" unitRef="usd">1,158,642</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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</div><ix:continuation continuedAt="_VariableInterestEntityDisclosureTextBlock-c0_cont_118" id="_VariableInterestEntityDisclosureTextBlock-c0_cont_117"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There are no pledge or collateralization of the
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except for the restricted assets disclosed in Note - 19. Relevant PRC laws and regulations restrict the VIE from transferring a portion
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</div><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&#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="_LeasesOfLesseeDisclosureTextBlock-c0_cont_4" id="_LeasesOfLesseeDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company leases certain of its revenue equipment
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</div><div>

</div><ix:continuation continuedAt="_LeasesOfLesseeDisclosureTextBlock-c0_cont_5" id="_LeasesOfLesseeDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2021, the Company has capital
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</div><div>

</div><ix:continuation continuedAt="_LeasesOfLesseeDisclosureTextBlock-c0_cont_6" id="_LeasesOfLesseeDisclosureTextBlock-c0_cont_5"><ix:continuation id="ygmz_ScheduleOfCapitalLeaseCommitmentsForRevenueEquipmentTableTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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  <tr style="vertical-align: bottom">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; 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; text-align: justify; padding-bottom: 1.5pt">Less: current maturities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt; text-align: right">&#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">(<ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="ygmz:LessCurrentMaturitie" scale="0" sign="-" unitRef="usd">2,267,248</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: justify; padding-bottom: 4pt">Capital lease obligations, long-term</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt; text-align: right">&#160;</td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
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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><ix:continuation continuedAt="_LeasesOfLesseeDisclosureTextBlock-c0_cont_7" id="_LeasesOfLesseeDisclosureTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The lease term of the Company&#8217;s capital
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to <ix:nonFraction contextRef="c264" decimals="3" format="ixt:num-dot-decimal" name="ygmz:CapitalLeaseObligationPercentage" scale="-2" unitRef="pure">11.8</ix:nonFraction>% per annum and <ix:nonFraction contextRef="c265" decimals="3" format="ixt:num-dot-decimal" name="ygmz:CapitalLeaseObligationPercentage" scale="-2" unitRef="pure">3.4</ix:nonFraction>% to <ix:nonFraction contextRef="c266" decimals="3" format="ixt:num-dot-decimal" name="ygmz:CapitalLeaseObligationPercentage" scale="-2" unitRef="pure">17.0</ix:nonFraction>% per annum for the years ended December 31, 2022, 2021 and 2020, respectively. Interest expenses incurred
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</div><div>




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

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

</div><ix:continuation continuedAt="_LeasesOfLesseeDisclosureTextBlock-c0_cont_8" id="_LeasesOfLesseeDisclosureTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&#8217;s capital lease obligations
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</div><div>

</div><ix:continuation continuedAt="_LeasesOfLesseeDisclosureTextBlock-c0_cont_9" id="_LeasesOfLesseeDisclosureTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The total future minimum lease payments under
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</div><div>

</div><ix:continuation continuedAt="_LeasesOfLesseeDisclosureTextBlock-c0_cont_10" id="_LeasesOfLesseeDisclosureTextBlock-c0_cont_9"><ix:nonNumeric contextRef="c0" continuedAt="_LesseeOperatingLeaseLiabilityMaturityTableTextBlock-c0_cont_1" escape="true" name="us-gaap:LesseeOperatingLeaseLiabilityMaturityTableTextBlock"><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>
    <td colspan="2" style="text-align: right">&#160;</td>
    <td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="width: 1%">&#160;</td>
    <td style="width: 1%">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td>&#160;</td>
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</div><div>

</div><ix:continuation continuedAt="_LeasesOfLesseeDisclosureTextBlock-c0_cont_11" id="_LeasesOfLesseeDisclosureTextBlock-c0_cont_10"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The total future minimum lease payments under
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</div><div>

</div><ix:continuation continuedAt="_LeasesOfLesseeDisclosureTextBlock-c0_cont_12" id="_LeasesOfLesseeDisclosureTextBlock-c0_cont_11"><ix:continuation id="_LesseeOperatingLeaseLiabilityMaturityTableTextBlock-c0_cont_1"><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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    <td>&#160;</td></tr>
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    <td style="width: 1%">&#160;</td>
    <td style="width: 1%">&#160;</td>
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    <td style="width: 1%">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>
</div><div>

</div><ix:continuation id="_LeasesOfLesseeDisclosureTextBlock-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Rental expense of the Company for the years ended
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:RelatedPartyTransactionsDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 17 &#8211; Related party balances and
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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; text-align: justify"><span style="text-decoration:underline">Related party balances</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_3" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The amount due from related parties consists of
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</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_4" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_3"><ix:nonNumeric contextRef="c0" escape="true" name="us-gaap:ScheduleOfRelatedPartyTransactionsTableTextBlock"><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; ">
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    <td style="vertical-align: top; text-align: left"><ix:nonNumeric contextRef="c269" name="ygmz:DueFromRelatedPartiesNature">Advances to payment of professional fee</ix:nonNumeric></td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="vertical-align: top; text-align: left"><ix:nonNumeric contextRef="c271" name="ygmz:DueFromRelatedPartiesRelationship">Senior employee</ix:nonNumeric></td><td>&#160;</td>
    <td style="vertical-align: top; text-align: left"><ix:nonNumeric contextRef="c271" name="ygmz:DueFromRelatedPartiesNature">Advances for operational purpose</ix:nonNumeric></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c272" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DueFromRelatedParties" scale="0" unitRef="usd">32,839</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">-</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left">Mr. Jinlong Yang</td><td>&#160;</td>
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    <td style="vertical-align: top; text-align: left"><ix:nonNumeric contextRef="c273" name="ygmz:DueFromRelatedPartiesNature">Advances for operational purpose</ix:nonNumeric></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c274" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DueFromRelatedParties" scale="0" unitRef="usd">709,694</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="c275" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DueFromRelatedParties" scale="0" unitRef="usd">705,280</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left; padding-bottom: 1.5pt">Mr. Mingzhu Logistics</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="vertical-align: top; text-align: left; padding-bottom: 1.5pt"><ix:nonNumeric contextRef="c276" name="ygmz:DueFromRelatedPartiesRelationship">Mr. Jinlong Yang&#8217;s family member as sole shareholder</ix:nonNumeric></td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="text-align: left; padding-bottom: 4pt; vertical-align: top">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="vertical-align: top; text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="vertical-align: top; text-align: left; 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="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_5" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The amount due to related parties consists of
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</div><div>

</div><ix:continuation continuedAt="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_6" id="_RelatedPartyTransactionsDisclosureTextBlock-c0_cont_5"><ix:nonNumeric contextRef="c0" escape="true" name="ygmz:ScheduleOfDueToRelatedPartieTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; font-weight: bold; text-align: center">Relationship</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; vertical-align: bottom; font-weight: bold; text-align: center">Nature</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="vertical-align: top; width: 25%; text-align: left">Mr. Zuojie Dai</td><td style="width: 1%">&#160;</td>
    <td style="vertical-align: top; width: 24%; text-align: left"><ix:nonNumeric contextRef="c278" name="ygmz:DueToRelatedPartiesRelationship">Manager of MingZhu Pengcheng</ix:nonNumeric></td><td style="width: 1%">&#160;</td>
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    <td style="width: 1%; text-align: left">&#160;</td><td style="width: 9%; text-align: right"><ix:nonFraction contextRef="c279" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DueToRelatedPartiesCurrentAndNoncurrent" scale="0" unitRef="usd">75,180</ix:nonFraction></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"><ix:nonFraction contextRef="c280" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DueToRelatedPartiesCurrentAndNoncurrent" scale="0" unitRef="usd">81,375</ix:nonFraction></td><td style="width: 1%; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left"><p style="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif"><span>Exquisite Elite Limited</span></p></td><td>&#160;</td>
    <td style="vertical-align: top; text-align: left"><ix:nonNumeric contextRef="c269" name="ygmz:DueToRelatedPartiesRelationship">Shareholder</ix:nonNumeric></td><td>&#160;</td>
    <td style="vertical-align: top; text-align: left"><ix:nonNumeric contextRef="c269" name="ygmz:DueToRelatedPartyNature">Advances to payment of professional fee</ix:nonNumeric></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-143">-</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="c281" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DueToRelatedPartiesCurrentAndNoncurrent" scale="0" unitRef="usd">14,479</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left">MingZhu Logistics</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: left"><ix:nonNumeric contextRef="c282" name="ygmz:DueToRelatedPartiesRelationship">Mr. Jinlong Yang&#8217;s family member as sole shareholder</ix:nonNumeric></td><td>&#160;</td>
    <td style="vertical-align: top; text-align: left"><ix:nonNumeric contextRef="c282" name="ygmz:DueToRelatedPartyNature">Lending with no interests</ix:nonNumeric></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-144">-</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="c284" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DueToRelatedPartiesCurrentAndNoncurrent" scale="0" unitRef="usd">198,490</ix:nonFraction></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left">Mr. Jingwei Zhang</td><td>&#160;</td>
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    <td style="vertical-align: top; text-align: left"><ix:nonNumeric contextRef="c285" name="ygmz:DueToRelatedPartyNature">Advances for operational purpose</ix:nonNumeric></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c286" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DueToRelatedPartiesCurrentAndNoncurrent" scale="0" unitRef="usd">75,021</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-145">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="vertical-align: top; text-align: left">Lihui Wang</td><td>&#160;</td>
    <td style="text-align: left; vertical-align: top">&#160;</td><td>&#160;</td>
    <td style="vertical-align: top; text-align: left"><ix:nonNumeric contextRef="c288" name="ygmz:DueToRelatedPartyNature">Advances for operational purpose</ix:nonNumeric></td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right"><ix:nonFraction contextRef="c289" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DueToRelatedPartiesCurrentAndNoncurrent" scale="0" unitRef="usd">1,552,720</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-146">-</div></td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td style="vertical-align: top; text-align: left; padding-bottom: 1.5pt">Xiangyin Guo</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="text-align: left; padding-bottom: 1.5pt; vertical-align: top">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="vertical-align: top; text-align: left; padding-bottom: 1.5pt"><ix:nonNumeric contextRef="c291" name="ygmz:DueToRelatedPartyNature">Advances for operational purpose</ix:nonNumeric></td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c292" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DueToRelatedPartiesCurrentAndNoncurrent" scale="0" unitRef="usd">4,405,945</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-147">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: left; padding-bottom: 4pt; vertical-align: top">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="text-align: left; padding-bottom: 4pt; vertical-align: top">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="vertical-align: top; text-align: left; padding-bottom: 4pt">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c3" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DueToRelatedPartiesCurrentAndNoncurrent" scale="0" unitRef="usd">6,108,866</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td><td style="padding-bottom: 4pt">&#160;</td>
    <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right"><ix:nonFraction contextRef="c4" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:DueToRelatedPartiesCurrentAndNoncurrent" scale="0" unitRef="usd">294,344</ix:nonFraction></td><td style="padding-bottom: 4pt; text-align: left">&#160;</td></tr>
  </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric></ix:continuation><div>

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</div><div>

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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><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="ygmz_EmployeeBenefitsGovernmentPlanTextBlock-c0_cont_1" escape="true" name="ygmz:EmployeeBenefitsGovernmentPlanTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 18 &#8211; Employee benefits government
plan</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 id="ygmz_EmployeeBenefitsGovernmentPlanTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company participates in a government-mandated
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PRC labor regulations require the Company to pay to the local labor bureau a monthly contribution calculated at a stated contribution
rate based on the basic monthly compensation of qualified employees. The relevant local labor bureau is responsible for meeting all retirement
benefit obligations; the Company has no further commitments beyond its monthly contribution.</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><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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</div><div>

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on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise
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</div><div>

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State Administration of Taxation (&#8220;SAT&#8221;) on March 14, 2022 jointly issued Cai Shui 2022 No. 13. This clarified that from January
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on a rate of 20% (i.e., effective rate is 5%) and the income between RMB 1,000,000 and RMB 3,000,000 is eligible for 50% reduction on
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p><div>

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

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</div><div>

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</div><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 tax effects of temporary difference that give
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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:ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><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">The Company evaluated the recoverable amounts
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net operating loss and temporary difference can be utilized. The Company considers both positive and negative factors when assessing the
future realization of the deferred tax assets and applied weigh to the relative impact of the evidences to the extent it could be objectively
verified.</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"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&#8217;s net operation loss (&#8220;NOL&#8221;)
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</div><div>

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</div><div>

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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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  </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_19" id="_IncomeTaxDisclosureTextBlock-c0_cont_18"><ix:continuation id="_ScheduleOfEffectiveIncomeTaxRateReconciliationTableTextBlock-c0_cont_1"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 0px">&#160;</td> <td style="width: 24px">*</td> <td style="text-align: justify"><ix:footnote id="ix_6_footnote" xml:lang="en-US">Non-deductible items mainly arise from expenses not deductible for tax purposes primarily including professional fees in relation to capital market planning and late penalty fees.</ix:footnote></td></tr> </table><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation></ix:continuation><div>
</div><div>

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associated with the tax positions. The Company does not anticipate any significant increases or decreases in unrecognized tax benefits
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</div><div>

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</div><div>

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</div><div>


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</div><div>

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

</div><ix:nonNumeric contextRef="c0" continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:StockholdersEquityNoteDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 20 &#8211; Shareholders&#8217; equity</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_2" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Ordinary shares</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_3" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">MingZhu Cayman was established under the laws
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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">With the effect of resolutions passed by board
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</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 October 21, 2020, the Company completed the
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</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">On October 30, 2020, the underwriter and sole
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</div><div>

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<ix:nonFraction contextRef="c67" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockIssuedDuringPeriodSharesIssuedForServices" scale="0" unitRef="shares">4,040</ix:nonFraction> ordinary shares of the Company at the IPO price of US$<ix:nonFraction contextRef="c68" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:SaleOfStockPricePerShare" scale="0" unitRef="usdPershares">4.00</ix:nonFraction> per share.</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">As of December 31, 2020, the authorized number
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</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">With the above IPO and over-allotments, the Company
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</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">On March 12, 2021, the Company closed its direct
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of the Company, par value $<ix:nonFraction contextRef="c71" decimals="3" format="ixt:num-dot-decimal" name="ygmz:CommonStockParValuePerShare" scale="0" unitRef="usdPershares">0.001</ix:nonFraction> per share, and (ii) one warrant to purchase <ix:nonFraction contextRef="c69" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:PaymentsForRepurchaseOfWarrants" scale="0" unitRef="usd">0.75</ix:nonFraction> ordinary share. The Company sold the Units at a price
of $<ix:nonFraction contextRef="c71" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:SharesIssuedPricePerShare" scale="0" unitRef="usdPershares">6.00</ix:nonFraction> per Unit. The Company received gross proceeds from the Offering, before deducting estimated offering expenses payable by the
Company, of approximately $<ix:nonFraction contextRef="c69" decimals="0" format="ixt:num-dot-decimal" name="ygmz:OfferingExpensesPayable" scale="0" unitRef="usd">18,000,000</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><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 April 21, 2021, the underwriter and sole book-runner
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consideration.</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 June 14, 2021, the underwriter and sole book-runner
of our underwritten IPO, exercised its partial warrant and purchased a total of <ix:nonFraction contextRef="c73" decimals="0" format="ixt:num-dot-decimal" name="ygmz:WarrantAndPurchasedTotalOfOrdinaryShares" scale="0" unitRef="shares">43,616</ix:nonFraction> ordinary shares of the Company with no cash in
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</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_13" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_12"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 29, 2021, the Company entered into
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which operates its business through its subsidiary Zhejiang Cheyi Network Technology Co., Ltd. (the &#8220;Cheyi Network&#8221;), an integrated
online car-hailing and driver management services company. Pursuant to the agreement, the total consideration for the acquisition of <ix:nonFraction contextRef="c88" decimals="2" format="ixt:num-dot-decimal" name="ygmz:EquityOwnershipPercentage" scale="-2" unitRef="pure">100</ix:nonFraction>%
equity ownership of Cheyi BVI is an aggregate of U.S. $<ix:nonFraction contextRef="c76" decimals="0" format="ixt:num-dot-decimal" name="ygmz:AggregateValue" scale="0" unitRef="usd">23,470,712</ix:nonFraction>, consisting of the issuance by the Company to the shareholders of Cheyi
BVI an aggregate of <ix:nonFraction contextRef="c76" decimals="0" format="ixt:num-dot-decimal" name="ygmz:AggregateShares" scale="0" unitRef="shares">3,189,000</ix:nonFraction> fully paid Company&#8217;s ordinary shares (being U.S. $<ix:nonFraction contextRef="c77" decimals="0" format="ixt:num-dot-decimal" name="ygmz:AggregateValue" scale="0" unitRef="usd">6,760,680</ix:nonFraction> of $<ix:nonFraction contextRef="c78" decimals="2" format="ixt:num-dot-decimal" name="us-gaap:SharesIssuedPricePerShare" scale="0" unitRef="usdPershares">2.12</ix:nonFraction> per share) and payment of $<ix:nonFraction contextRef="c77" decimals="0" format="ixt:num-dot-decimal" name="ygmz:EarnoutPayment" scale="0" unitRef="usd">2,000,000</ix:nonFraction>
at closing, and Year-2021 earnout payment of U.S. $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="ygmz:EarnoutPayment" scale="0" unitRef="usd">8,826,019</ix:nonFraction> and Year-2022 earnout payment of U.S. $<ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="ygmz:EarnoutPayment" scale="0" unitRef="usd">5,884,013</ix:nonFraction> if the Cheyi BVI&#8217;s
audited net income for its fiscal year 2021 and 2022 is no less than U.S. $<ix:nonFraction contextRef="c5" decimals="0" format="ixt:num-dot-decimal" name="ygmz:NetIncomes" scale="0" unitRef="usd"><ix:nonFraction contextRef="c0" decimals="0" format="ixt:num-dot-decimal" name="ygmz:NetIncomes" scale="0" unitRef="usd">3,000,000</ix:nonFraction></ix:nonFraction> respectively. The two earnout payments are due 13
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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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companies, and each of the shareholders of the Yinhua. Under terms of the share purchase agreement, we shall pay $<ix:nonFraction contextRef="c344" decimals="0" format="ixt:num-dot-decimal" name="ygmz:PurchaseAgreement" scale="0" unitRef="usd">10,076,600</ix:nonFraction> in exchange
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</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">As of December 31, 2022, the authorized number
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</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">The Company believes it is appropriate to reflect
the above transactions as re-denomination and nominal issuance of shares on a retroactive basis similar to stock split or dividend pursuant
to ASC 260. According to the above transactions, the Company has retroactively adjusted the shares and per share data for all periods
presented.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></p></ix:continuation><div>

</div><div>




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

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

</div><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"><span style="text-decoration:underline">Share subscription receivables</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

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</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_19" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_18"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Statutory reserves</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_20" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_19"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In accordance with the relevant PRC laws and regulations,
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to other types of reserves in accordance with relevant PRC laws and regulations are to be made at the discretion of the board of directors
of each of the Group&#8217;s subsidiaries in the PRC. The statutory reserves are restricted from being distributed as dividends under
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</div><div>

</div><ix:continuation continuedAt="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_21" id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_20"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Restricted assets</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation id="_StockholdersEquityNoteDisclosureTextBlock-c0_cont_21"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As a result of these PRC laws and regulations
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in accordance with PRC accounting standards, the Group&#8217;s subsidiaries in the PRC are restricted from transferring a portion of their
net assets to the Company. The restricted amounts include the paid-in capital and the statutory reserves of the Group&#8217;s subsidiaries
in the PRC. The aggregate amount of paid-in capital and statutory reserves, which represented the amount of net assets of the Group&#8217;s
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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_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 21 &#8211; Commitments and Contingencies</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:nonNumeric><div>

</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_2" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Guarantee Commitments</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_3" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_2"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In November 2017, the MingZhu entered into guarantee
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2017, the MingZhu entered into a guarantee agreement in which MingZhu Logistics, a related party, guaranteed for the above-mentioned capital
lease. The Company assessed its performance guarantee obligations as of December 31, 2021 in accordance with ASC 460,&#160;Guarantees,
no financial impact was found.</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_4" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_3"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Lease Commitments</span></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>

</div><div>

</div><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_5" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company entered into a lease for office space
located in Shenzhen, Guangdong, China for the period from November 21, 2018 to November 20, 2023. The Company&#8217;s commitments for
minimum lease payment under these operating leases as of December 31, 2022 are listed in section &#8220;Note 12 &#8211; Leases&#8221;.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p></ix:continuation><div>
</div><div>

</div><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><ix:continuation continuedAt="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_6" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_5"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><span style="text-decoration:underline">Contingencies</span>&#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="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_7" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_6"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">From time to time, the Company is party to certain
legal proceedings, as well as certain asserted and unasserted claims.</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_8" id="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_7"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On January 20, 2022, Shenzhen Xincang Freight
Co., Ltd. submitted <ix:nonNumeric contextRef="c350" name="ygmz:ContingenciesDescription">the Civil Complaint to The People&#8217;s Court of Yantian District, requesting the defendant Jian Yang to compensate
for the economic loss of RMB 233,055, judgment of the defendant Yangang Pearl for Jian Yang&#8217;s compensation liability to assume joint
liability. According to the civil order issued by The People&#8217;s Court of Yantian District on January 27, 2022, the applicant Shenzhen
Xincang Freight Co., Ltd. applies for property preservation in the case of the liability dispute between the applicant Shenzhen Xincang
Freight Co., Ltd. of seizing and freezing the property worth RMB 234,990.12 under the name of the respondent Mingzhu. According to the
notice of response issued by The People&#8217;s Court of Yantian District, on February 10, 2022, the case of the liability dispute between
the plaintiff and the defendant Mingzhu and Jian Yang was filed by the Court on January 21, 2022.</ix:nonNumeric> A trial is scheduled for March 18, 2022.
As of the date of this annual report, the case had been concluded and the Company had paid out the claimed amount of compensation.</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="_CommitmentsAndContingenciesDisclosureTextBlock-c0_cont_8"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In accordance with ASC No. 450-20, &#8220;Loss
Contingencies&#8221;, the Company will record accruals for above loss contingencies when it is probable that a liability has been incurred
and the amount of loss can be reasonably estimated. There are no other material loss contingencies than above-mentioned ones for the years
ended December 31, 2022 and 2021.</p></ix:continuation><div>
</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</p><div>

</div><ix:nonNumeric contextRef="c0" continuedAt="_SegmentReportingDisclosureTextBlock-c0_cont_1" escape="true" name="us-gaap:SegmentReportingDisclosureTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Note 22 &#8211; Segment information</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="_SegmentReportingDisclosureTextBlock-c0_cont_2" id="_SegmentReportingDisclosureTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&#8217;s CODM has been identified as
its CEO, who reviews the financial results when making decisions about allocating resources and assessing performance separately of three
business segments as 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="_SegmentReportingDisclosureTextBlock-c0_cont_3" id="_SegmentReportingDisclosureTextBlock-c0_cont_2"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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</div><div>

</div><ix:continuation continuedAt="_SegmentReportingDisclosureTextBlock-c0_cont_4" id="_SegmentReportingDisclosureTextBlock-c0_cont_3"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><tr style="vertical-align: top; text-align: justify">
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</div><div>

</div><ix:continuation continuedAt="_SegmentReportingDisclosureTextBlock-c0_cont_5" id="_SegmentReportingDisclosureTextBlock-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">
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</div><div>

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</div><div>

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

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BVI was completed on December 29, 2021, March 14, 2022 and December 20, 2022, in accordance with the ASC-805, the Company only is able
to account the revenue generated by Cheyi BVI, Yinhua, Feipeng BVI and their subsidiaries after the acquisition is completed. The Company
had carefully evaluated the amount of such revenue generated by Cheyi BVI, Yinhua, Feipeng BVI and their subsidiaries with reasonable
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</div><div>

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</div><div>

</div><ix:continuation continuedAt="_SegmentReportingDisclosureTextBlock-c0_cont_9" id="_SegmentReportingDisclosureTextBlock-c0_cont_8"><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">
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    <td colspan="2">&#160;</td><td>&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
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  <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>

</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 23 &#8211; Subsequent events</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 id="_SubsequentEventsTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">No significant event occurred after the date of
December 31, 2022.</p></ix:continuation><div>

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




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

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

</div><ix:nonNumeric contextRef="c0" continuedAt="_DisclosureOfReclassificationAmountTextBlock-c0_cont_1" escape="true" name="us-gaap:DisclosureOfReclassificationAmountTextBlock"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Note 24 &#8211; Reclassification</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 id="_DisclosureOfReclassificationAmountTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Certain prior year amounts have been reclassified
for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations and performance
position. A reclassification has been made to the Consolidated Balance Sheet and Consolidated Statements of Cash Flows for the fiscal
year ended December 31, 2020, to reclassify the others receivable.</p></ix:continuation><div>

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


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

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</div><div>

</div><ix:continuation continuedAt="_CondensedFinancialStatementsTextBlock-c0_cont_2" id="_CondensedFinancialStatementsTextBlock-c0_cont_1"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company performed a test on the restricted
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</div><div>

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as &#8220;Investment in subsidiary&#8221; and the income of the subsidiary is presented as &#8220;share of income of subsidiary&#8221;.
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</div><div>

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</div><div>

</div><ix:continuation continuedAt="_CondensedFinancialStatementsTextBlock-c0_cont_5" id="_CondensedFinancialStatementsTextBlock-c0_cont_4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">PARENT COMPANY BALANCE SHEETS</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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  <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">&#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="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><div style="-sec-ix-hidden: hidden-fact-158">-</div></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
    <td>&#160;</td><td>&#160;</td>
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td>&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; ">
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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</div><div>

</div><ix:continuation continuedAt="_CondensedFinancialStatementsTextBlock-c0_cont_10" id="_CondensedFinancialStatementsTextBlock-c0_cont_9"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">PARENT COMPANY STATEMENT OF CASH FLOWS</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="_CondensedFinancialStatementsTextBlock-c0_cont_10"><ix:nonNumeric contextRef="c358" escape="true" name="srt:ScheduleOfCondensedCashFlowStatementTableTextBlock"><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
    <td colspan="10" style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the Year Ended<br/> December&#160;31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#160;</td></tr>
  <tr style="vertical-align: bottom">
    <td style="text-align: justify">&#160;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#160;</td>
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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>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <tr style="vertical-align: bottom; ">
    <td style="text-align: justify; padding-bottom: 1.5pt; padding-left: 22.9pt">Prepayments</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="c358" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:StockOptionPlanExpense" scale="0" sign="-" unitRef="usd">1,940,031</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#160;</td>
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; padding-bottom: 1.5pt">Net cash provided by (used in) operating activities</td><td style="padding-bottom: 1.5pt">&#160;</td>
    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right"><ix:nonFraction contextRef="c358" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInOperatingActivities" scale="0" sign="-" unitRef="usd">2,281,591</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-align: justify">&#160;</td><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">Cash flows from financing activities:</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="text-align: left">&#160;</td><td style="text-align: right">(<ix:nonFraction contextRef="c358" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromRelatedPartyDebt" scale="0" unitRef="usd">4,221,622</ix:nonFraction></td><td style="text-align: left">)</td><td>&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify; padding-bottom: 1.5pt; padding-left: 8.7pt">Proceeds from private placement</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="c361" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:ProceedsFromIssuanceOfPrivatePlacement" scale="0" unitRef="usd">18,465,009</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; ">
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    <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="c361" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:NetCashProvidedByUsedInFinancingActivities" scale="0" unitRef="usd">7,908,316</ix:nonFraction></td><td style="padding-bottom: 1.5pt; text-align: left">&#160;</td><td style="padding-bottom: 1.5pt">&#160;</td>
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  <tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
    <td style="text-align: justify">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td><td>&#160;</td>
    <td style="text-align: left">&#160;</td><td style="text-align: right">&#160;</td><td style="text-align: left">&#160;</td></tr>
  <tr style="vertical-align: bottom; ">
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    <td style="border-bottom: Black 1.5pt solid; text-align: left">&#160;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">-</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="c361" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:EffectOfExchangeRateOnCashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents" scale="0" unitRef="usd">2,444</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="c362" decimals="0" format="ixt:num-dot-decimal" name="us-gaap:EffectOfExchangeRateOnCashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents" scale="0" unitRef="usd">82</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: justify">&#160;</td><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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</div><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#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-top: 0pt; margin-bottom: 0pt; text-align: center">F-43</p><div>

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

</div><!-- Field: Rule-Page --><div style="margin-top: 0pt; margin-bottom: 0pt; width: 100%"><div style="border-top: Black 1.5pt solid; font-size: 1pt">&#160;</div></div><!-- Field: /Rule-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: 36pt">&#160;</p><div>

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













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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
20-F
☐
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
December 31
,
2022
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☐
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report:
For the transition period from _________ to
_________.
Commission file number:
001-39564
MingZhu Logistics Holdings Limited
(Exact name of Registrant as specified in its charter)
Cayman Islands
(Jurisdiction of incorporation or organization)
27F, Yantian Modern Industry Service Center
No. 3018 Shayan Road
,
Yantian District
Shenzhen
, Guangdong,
China
518081
(86) 755-25209839
(Address of principal executive offices)
Puglisi & Associates
850 Library Avenue
,
Suite 204
Newark
,
DE
(302)
738-6680
(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
Name of each exchange on which registered
Ordinary shares, par value US$0.001 per share
YGMZ
Nasdaq
Capital Market
Securities registered or to be registered pursuant
to Section 12(g) of the Act:
None
(Title of Class)
Securities for which there is a reporting obligation
pursuant to Section 15(d) of the Act:
None
(Title of Class)
As of May 16, 2023, there were
22,960,277
ordinary shares, par value $0.001 per share, of the registrant 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.
(Check one):
Large accelerated filer ☐                  Accelerated
filer ☐
Non-accelerated
filer
☒                  Emerging
growth company
☒
If an emerging growth company that prepares its
financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition
period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange
Act.
☐
†
The term "new or revised financial accounting standard"
refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate
by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of
its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.
☐
Yes
☒
No
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether
any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the
registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting
the registrant has used to prepare the financial statements included in this filing:
☒
U.S.
GAAP
☐
International Financial Reporting Standards
as issued by the International Accounting Standards Board
☐
Other
☐
If "Other" has been checked in response
to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: Item 17
☐
Item
18
☐
If this is an annual report, indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
☐
No
☒
MINGZHU LOGISTICS HOLDINGS LIMITED
FORM 20-F ANNUAL REPORT
TABLE OF CONTENTS
Page
PART I
Item 1.
Identity of Directors, Senior Management and Advisers
4
Item 2.
Offer Statistics and Expected Timetable
4
Item 3.
Key Information
4
Item 4.
Information on the Company
46
Item 4A.
Unresolved Staff Comments
76
Item 5.
Operating and Financial Review and Prospects
76
Item 6.
Directors, Senior Management and Employees
95
Item 7.
Major Shareholders and Related Party Transactions
100
Item 8.
Financial Information
103
Item 9.
The Offer and Listing
103
Item 10.
Additional Information
104
Item 11.
Quantitative and Qualitative Disclosures About Market Risk
119
Item 12.
Description of Securities Other than Equity Securities
120
PART II
Item 13.
Defaults, Dividend Arrearages and Delinquencies
121
Item 14.
Material Modifications to the Rights of Security Holders and Use of Proceeds
121
Item 15.
Controls and Procedures
121
Item 16.
Reserved
123
Item 16A.
Audit Committee Financial Expert
123
Item 16B.
Code of Ethics
123
Item 16C.
Principal Accountant Fees and Services
124
Item 16D.
Exemptions from the Listing Standards for Audit Committees
124
Item 16E.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
124
Item 16F.
Change in Registrant's Certifying Accountant
125
Item 16G.
Corporate Governance
125
Item 16H.
Mine Safety Disclosure
125
Item 16I.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
125
PART III
Item 17.
Financial Statements
126
Item 18.
Financial Statements
126
Item 19.
Exhibits
126
i
PART I
CERTAIN INFORMATION
In this annual report on Form
20-F, unless otherwise indicated, "we," "us," "our," and the "Company" refer to MingZhu
Logistics Holdings Limited, a company organized in the Cayman Islands, and its predecessor entities.
Unless we indicate otherwise,
all information in this annual report reflects the following:
●
"CAGR" refers to the estimated compound annual growth rate;
●
"China" or "PRC" refer to the People's Republic of China, excluding, for the purpose of this annual report only, Taiwan, Hong Kong and Macau;
●
"Companies Act" refers to the Companies Act (Revised) of the Cayman Islands;
●
"CSRC" refers to the China Securities Regulatory Commission;
●
"Exchange Act" refers to the Securities Exchange Act of 1934, as amended;
●
"FIE" refers to a foreign-invested enterprise;
●
"FINRA" refers to the Financial Industry Regulatory Authority, Inc.;
●
"GAAP" refers to the generally accepted accounting principles in the United States;
●
"HK$", "HKD" or "Hong Kong dollars" refers to the legal currency of the Hong Kong Special Administrative Region;
●
"initial public offering" refers to our initial public offering, in which we offered and sold an aggregate of 3,354,040 ordinary shares at an offering price of US$4.00 per share, including a partial exercise of the underwriters' over-allotment;
●
"JOBS Act" refers to the Jumpstart Our Business Startups Act, enacted in April 2012;
●
"KPIs" refers to key performance indicators;
●
"We," "us," "our company," "the company," "our," or similar terms used in this annual report refer to
MingZhu Logistics Holdings Limited, a Cayman Islands exempted company
.
●
"MingZhu" refers to Shenzhen Yangang Mingzhu Freight Industry Co., Ltd., one of our operating subsidiaries in the PRC;
●
"MOFCOM" refers to China's Ministry of Commerce;
●
"ordinary shares" refers to our ordinary shares par value US$0.001 per share;
1
●
"PCAOB" refers to the Public Company Accounting Oversight Board of the United States;
●
"PFIC" refers to a passive foreign investment company;
●
"Registration Statement" refers to the registration statement we have filed with the SEC (as defined below) relating to this offering of which this annual report forms a part;
●
"RMB" or "Renminbi" refer to the legal currency of the People's Republic of China;
●
"SAFE" refers to China's State Administration of Foreign Exchange;
●
"SAT" refers to China's State Administration of Taxation;
●
"SEC" refers to the United States Securities and Exchange Commission;
●
"Securities Act" refers to the Securities Act of 1933, as amended; and
●
"Unit" or "Units" refer to the 3,333,335 Units of securities of the Company that were sold on March 12, 2021, with each Unit consisting of (a) one ordinary share, par value US$0.001 per share and (b) one warrant to purchase 0.75 ordinary share at an exercise price equal to $6.60, exercisable for three years and six months after the issuance date and subject to certain adjustment and cashless exercise provisions as described herein.
●
"US$,", "$", "dollars", "USD" or "U.S. dollars" refer to the legal currency of the United States.
We use U.S. dollars as the
reporting currency in our financial statements and in this annual report. Monetary assets and liabilities denominated in Renminbi are
translated into U.S. dollars at the rates of exchange as of the applicable balance sheet date. Equity accounts are translated at historical
exchange rates, and revenues, expenses, gains and losses are translated using the average rates for the applicable period. In other parts
of this annual report, any Renminbi denominated amounts are accompanied by the related translations. We make no representation that the
Renminbi or U.S. dollar amounts referred to in this annual report could have been or could be converted into U.S. dollars or Renminbi,
as the case may be, at any particular rate or at all. The PRC government restricts or prohibits the conversion of Renminbi into foreign
currency and foreign currency into Renminbi for certain types of transactions — overseas investments in areas including real estate,
hotels, cinemas, the entertainment industry, and sports clubs will be limited, while investments in some sectors such as gambling will
be banned.
2
FORWARD-LOOKING STATEMENTS
This annual report on Form
20-F contains forward-looking statements that reflect our current expectations and views of future events. Known and unknown risks, uncertainties
and other factors, including those listed under "3.D. Risk Factors", may cause our actual results, performance or achievements
to be materially different from those expressed or implied by the forward-looking statements.
You can identify some of these
forward-looking statements by words or phrases such as "may," "will," "expect," "anticipate,"
"aim," "estimate," "intend," "plan," "believe," "is/are likely to,"
"potential," "continue" or other similar expressions. We have based these forward-looking statements largely on
our current expectations and projections about future events that we believe may affect our financial condition, results of operations,
business strategy and financial needs. These forward-looking statements include statements relating to:
●
our goals and strategies;
●
our future business development, financial condition and results of operations;
●
the expected growth of the logistics industry, particularly, in China;
●
our expectations regarding demand for and market acceptance of our marketplace's products and services;
●
our expectations regarding our platform's base of borrowers and investors;
●
our plans to invest in our platform;
●
our relationships with our partners;
●
competition in our industry; and
●
relevant government policies and regulations relating to our industry.
These forward-looking statements
are subject to various and significant risks and uncertainties, including those which are beyond our control. Although we believe that
our expectations expressed in these forward-looking statements are reasonable, our expectations may later be found to be incorrect. The
forward-looking statements made in this annual report relate only to events or information as of the date on which the statements are
made in this annual report. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements,
whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the
occurrence of unanticipated events. You should thoroughly read this annual report and the documents that we refer to herein with the understanding
that our actual future results may be materially different from and worse than what we expect. We qualify all of our forward-looking statements
by these cautionary statements. We disclaim any obligation to update our forward-looking statements, except as required by law.
This annual report contains
certain data and information that we obtained from various government and private publications, including industry data and information
from Frost & Sullivan. Statistical data in these publications also include projections based on a number of assumptions. The transportation
services market in China may not grow at the rate projected by market data, or at all. Failure of this industry to grow at the projected
rate may have a material adverse effect on our business and the market price of our ordinary shares.
In addition, the new and rapidly
changing nature of the transportation industry results in significant uncertainties for any projections or estimates relating to the growth
prospects or future condition of our industry. Furthermore, if any one or more of the assumptions underlying the market data are later
found to be incorrect, actual results may differ from the projections based on these assumptions. You should not place undue reliance
on these forward-looking statements.
3
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not Applicable.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not Applicable.
ITEM 3. KEY INFORMATION
3.A. Reserved
3.B. Capitalization and Indebtedness
Not Applicable.
3.C. Reasons for The Offer and Use Of Proceeds
Not Applicable.
3.D. Risk Factors
Investing in our securities
is highly speculative and involves a significant degree of risk. You should carefully consider the following risks, as well as other information
contained in this annual report, before making an investment in our company. The risks discussed below could materially and adversely
affect our business, prospects, financial condition, results of operations, cash flows, ability to pay dividends and the trading price
of our ordinary shares. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also
materially and adversely affect our business, prospects, financial condition, results of operations, cash flows and ability to pay dividends,
and you may lose all or part of your investment.
4
Summary of Risk Factors
The
following summary description sets forth an overview of the material risks we are exposed to in the normal course of our business activities.
The summary does not purport to be complete and is qualified in its entirety by reference to the full risk factor discussion immediately
following this summary description. We encourage you to read the full risk factor discussion carefully. Our business, results of operations
and financial condition could be materially and adversely affected by any of the following material risks:
●
We are a Cayman Islands holding company with no equity ownership in our VIEs and we conduct our operations in China through (i) our PRC subsidiaries and (ii) our VIEs with which we have maintained contractual arrangements.
●
We rely on contractual arrangements with our VIE and its shareholders to exercise control over our business, which may not be as effective as direct ownership in providing operational control.
●
Uncertainties exist with respect to the interpretation and implementation of the newly enacted Foreign Investment Law and how it may impact the viability of our current structure, our business, financial condition and results of operations.
●
Our contractual arrangements are governed by PRC law. Accordingly, these contracts would be interpreted in accordance with PRC law, and any disputes would be resolved in accordance with PRC legal procedures, which may not protect you as much as those of other jurisdictions, such as the United States.
●
In the event we are unable to enforce the contractual arrangements with VIEs, we may not be able to exert effective control over the VIEs. If the government of the PRC finds that VIE Agreements do not comply with PRC laws, we could be subject to significant penalties or be forced to relinquish our interests in those operations or we could be unbale to assert our contractual control rights over the VIEs.
●
The PRC government has significant authority to regulate or intervene in the China operations of an offshore holding company, such as us, at any time. Therefore, investors in our ordinary shares and our business face potential uncertainty from the PRC government's policy.
●
Substantial uncertainties and restrictions with respect to the political and economic policies of the PRC government and PRC laws and regulations could have a significant impact upon the business the Company may be able to conduct in the PRC and accordingly on the results of its operations and financial condition.
●
There are uncertainties under the PRC laws relating to the procedures and time requirement for the U.S. regulators to bring about investigations and evidence collection within the territory of the PRC.
●
The failure to comply with PRC regulations relating to mergers and acquisitions of domestic enterprises by offshore special purpose vehicles may subject the Company to severe fines or penalties and create other regulatory uncertainties regarding the Company's corporate structure.
●
The Holding Foreign Companies Accountable Act, recent regulatory actions taken by the SEC and PCAOB, and proposed rule changes submitted by U.S. stock exchanges calling for additional and more stringent criteria to be applied to China-based public companies could add uncertainties to our capital raising activities and compliance costs.
5
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Cyber-attacks, computer viruses, physical or electronic break-ins or other unauthorized access to our or our business partners' computer systems could result in misuse of confidential information and misappropriation of funds of our borrowers and investors, subject us to liabilities, cause reputational harm and adversely impact our results of operations and financial condition.
●
Our reliance on major customers and any loss of our major customers or changes in their demands for our services would likely have a material adverse effect on our business, results of operations, financial conditions and prospect.
●
We generate a significant portion of our revenue from transportation services of slack coal in Xinjiang. Our reliance on such services subjects us to risks resulting from any decline in the business performance of our customers in the slack coal industry and adverse events in the slack coal industry or in the Xinjiang region in general.
●
Our cash flow position may deteriorate owing to the difference in timing between receipt of payments from our customers and payments to our suppliers and subcontractors if we are unable to such timing difference and its impact on our cash flow properly.
●
We rely on subcontractors to handle a proportion of our trucking services. Any delay or failure in their services would adversely affect our operations and financial results.
●
Difficulty in obtaining material, equipment, goods and services from our vendors and suppliers could adversely affect our business.
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The trucking service market in the PRC is highly competitive and fragmented, which subjects us to competitive pressures pertaining to pricing, capacity and service.
●
The trucking service market is affected by economic and business risks that are largely beyond our control.
●
We are, to a certain extent, dependent on the consumer and retail market in the PRC.
●
We may not be able to implement all or any of our business plans successfully.
●
Our business operations have been and may continue to be materially and adversely affected by the outbreak of the coronavirus disease (COVID-19).
●
Our results of operations may fluctuate significantly and may not fully reflect the underlying performance of our business.
●
We may need additional capital, and financing may not be available on terms acceptable to us, or at all.
●
We will be subject to changing laws, rules and regulations in the U.S. regarding regulatory matters, corporate governance and public disclosure that will increase both our costs and the risks associated with non-compliance.
●
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.
●
We have identified material weaknesses in our internal accounting controls, and if we fail to implement and maintain an effective system of internal controls or fail to remediate the material weaknesses in our internal control over financial reporting that have been identified, we may be unable to accurately report our results of operations or prevent fraud or fail to meet our reporting obligations, and customer confidence and the market price of our ordinary shares may be materially and adversely affected.
6
Risks Related to Our Corporate Structure
We are a Cayman Islands holding company
with no equity ownership in our VIEs and we conduct our operations in China through (i) our PRC subsidiaries and (ii) our VIEs with which
we have maintained contractual arrangements.
We are a Cayman Islands holding
company with no equity ownership in the VIEs and we conduct our operations in China through (i) our PRC subsidiaries and (ii) the VIEs
and their subsidiaries with which we have maintained contractual arrangements. Investors of our ordinary shares or the ADSs thus are not
purchasing equity interest in the VIEs and their subsidiaries in China but instead are purchasing equity interest in a Cayman Islands
holding company. If the PRC government deems that our contractual arrangements with the VIEs do not comply with PRC regulatory restrictions
on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change in the
future, we could be subject to severe penalties or be forced to relinquish our interests in those operations. Our holding company in the
Cayman Islands, the VIEs, and investors of our company face uncertainty about potential future actions by the PRC government that could
affect the validity and enforceability of the contractual arrangements with the VIEs and, consequently, significantly affect the financial
performance of the VIEs and our company as a group.
We rely on contractual
arrangements with our VIE and its shareholders to exercise control over our business, which may not be as effective as direct ownership
in providing operational control.
We have relied and expect
to continue to rely on contractual arrangements with VIEs, and their shareholders, to operate a portion of our business in China. These
contractual arrangements may not be as effective as direct ownership in providing us with control over the VIE. For example, the VIE and
its shareholders could breach their contractual arrangements with us by, among other things, failing to conduct their operations in an
acceptable manner or taking other actions that are detrimental to our interests. If we had direct ownership of the VIE, we would be able
to exercise our rights as a shareholder to effect changes in the board of directors of the VIE, which in turn could implement changes,
subject to any applicable fiduciary obligations, at the management and operational level. However, under the current contractual arrangements,
we rely on the performance by the VIE and its shareholders of their respective obligations under the contracts to exercise control over
the VIE. The shareholders of the VIE may not act in the best interests of our company or may not perform their obligations under these
contracts. Such risks exist throughout the period in which we intend to operate certain portion of our business through the contractual
arrangements with the VIE. If any dispute relating to these contracts remains unresolved, we will have to enforce our rights under these
contracts through arbitration, litigation or other legal proceedings and therefore will be subject to uncertainties in the PRC legal system.
Therefore, our contractual arrangements with the VIE may not be as effective in controlling our business operations as direct ownership.
Uncertainties exist
with respect to the interpretation and implementation of the newly enacted Foreign Investment Law and how it may impact the viability
of our current structure, our business, financial condition and results of operations.
Pursuant to the Regulations
for the Administration of Foreign-Invested Telecommunications Enterprises (the "FITE Regulations") promulgated by the State
Council, foreign investors are not allowed to hold more than 50% of the equity interests of any company providing value-added telecommunications
services, or VATS, including Internet Content Provider ("ICP") services. In addition, foreign-invested telecommunication enterprises
should meet the requirements as prescribed in the relevant regulations. We have to conduct our VATS business through the VIEs.
On March 15, 2019, the
Standing Committee of the National People's Congress of the PRC passed the Foreign Investment Law of the People's Republic
of China, or the Foreign Investment Law, which took effect on January 1, 2020 and replaced three existing laws regulating foreign
investment in China, namely, the PRC Equity Joint Venture Law, the PRC Cooperative Joint Venture Law and the Wholly Foreign-owned Enterprise
Law, together with their implementation rules and ancillary regulations. Among other things, the Foreign Investment Law defines the "foreign
investment" as the investment activities in China conducted by foreign individuals, enterprises and other organizations, or collectively,
the Foreign Investors, in a direct or indirectly manner, including any of the following circumstances: (1) the foreign investor establishes
a foreign-invested enterprise within the territory of China, independently or jointly with any other investor; (2) the foreign investor
acquires shares, equities, property shares or any other similar rights and interests of an enterprise within the territory of China; (3) the
foreign investor makes investment to initiate a new project within the territory of China, independently or jointly with any other investor;
and (4) the foreign investor makes investment in any other way stipulated by laws, administrative regulations or provisions of the
State Council. The Foreign Investment Law leaves uncertainty with respect to whether Foreign Investors controlled PRC onshore variable
interest entities via contractual arrangements will be recognized as "foreign investment". PRC governmental authorities will
administrate foreign investment by applying the principal of pre-entry national treatment together with a "negative list,"
or the Negative List, which shall be promulgated by or promulgated with approval by the State Counsel, to be specific, Foreign Investors
are prohibited from making any investments in the fields which are catalogued into prohibited industries for foreign investment based
on the Negative List, while Foreign Investors are allowed to make investments in the restricted industries provided that all the requirements
and conditions as set forth in the Negative List have been satisfied; when Foreign Investors make investments in the fields other than
those included in the Negative List, the national treatment principle shall apply. Besides, certain approval and/or filing requirements
shall be fulfilled in accordance with applicable foreign investment laws and regulations.
If our control over the VIE
through contractual arrangements are deemed as foreign investment in the future, and any business of the VIE is restricted or prohibited
from foreign investment under the "negative list" effective at the time, we may be deemed to be in violation of the Foreign
Investment Law, the contractual arrangements that allow us to have control over the VIE may be deemed as invalid and illegal, and we may
be required to unwind such contractual arrangements and/or restructure our business operations, any of which may have a material adverse
effect on our business operation and consequently affecting our ability to prepare for and seek approval and commercialization of our
product candidates both in China and elsewhere.
7
Contractual arrangements
in relation to the VIEs may be subject to scrutiny by the PRC tax authorities and they may determine that we or the VIEs owes additional
taxes, which could negatively affect our financial condition and the value of your investment.
Under applicable PRC laws
and regulations, arrangements and transactions among related parties may be subject to audit or challenge by the PRC tax authorities.
The Enterprise Income Tax Law requires every enterprise in China to submit its annual enterprise income tax return together with a report
on transactions with its related parties to the relevant tax authorities. The tax authorities may impose reasonable adjustments on taxation
if they have identified any related party transactions that are inconsistent with arm's length principles. We may face material
and adverse tax consequences if the PRC tax authorities determine the contractual arrangements among the VIEs and its shareholders were
not entered into on an arm's length basis in such a way as to result in an impermissible reduction in taxes under applicable PRC
laws, rules and regulations, and adjust the income of the VIEs in the form of a transfer pricing adjustment. A transfer pricing adjustment
could, among other things, result in a reduction of expense deductions recorded by the VIEs for PRC tax purposes, which could increase
our tax expenses. In addition, the PRC tax authorities may impose late payment fees and other penalties on the VIEs for the adjusted but
unpaid taxes according to the applicable regulations. Our financial position could be materially and adversely affected if the VIEs'
tax liabilities increase or if it is required to pay late payment fees and other penalties.
We may lose the
ability to use and enjoy assets held by the VIEs that are important to our business if the VIEs declare bankruptcy or become subject to
a dissolution or liquidation proceeding.
As part of our contractual
arrangements with the VIEs, the VIEs hold certain assets that are material to the operation of certain portion of our business, including
permits, domain names and certain of our intellectual property rights. If the VIEs are declared bankrupt and all or part of their assets
become subject to liens or rights of third-party creditors, we may be unable to continue some or all of our business activities, which
could materially and adversely affect our business, financial condition and results of operations. Under the contractual arrangements,
the VIEs may not, in any manner, sell, transfer, mortgage or dispose of its assets or legal or beneficial interests in the business without
our prior consent. If our consolidated affiliated entity undergoes a voluntary or involuntary liquidation proceeding, the independent
third-party creditors may claim rights to some or all of these assets, thereby hindering our ability to operate our business, which could
materially and adversely affect our business, financial condition and results of operations.
If the chops of
our PRC subsidiaries or VIEs are not kept safely, are stolen or are used by unauthorized persons or for unauthorized purposes, the corporate
governance of these entities could be severely and adversely compromised.
In China, a company chop or
seal serves as the legal representation of the company towards third parties even when unaccompanied by a signature. Each legally registered
company in China is required to maintain a company chop, which must be registered with the local Public Security Bureau. In addition to
this mandatory company chop, companies may have several other chops which can be used for specific purposes. The chops of our PRC subsidiaries
and VIEs are generally held securely by personnel designated or approved by us in accordance with our internal control procedures. To
the extent those chops are not kept safely, are stolen or are used by unauthorized persons or for unauthorized purposes, the corporate
governance of these entities could be severely and adversely compromised and those corporate entities may be bound to abide by the terms
of any documents so chopped, even if they were chopped by an individual who lacked the requisite power and authority to do so. In addition,
if the chops are misused by unauthorized persons, we could experience disruption to our normal business operations. We may have to take
corporate or legal action, which could involve significant time and resources to resolve while distracting management from our operations.
Our contractual
arrangements are governed by PRC law. Accordingly, these contracts would be interpreted in accordance with PRC law, and any disputes would
be resolved in accordance with PRC legal procedures, which may not protect you as much as those of other jurisdictions, such as the United
States.
All the agreements under our
contractual arrangements with the VIEs and their equity owners are governed by PRC law and provide for the resolution of disputes through
arbitration in China. Accordingly, these contracts would be interpreted in accordance with PRC law and any disputes would be resolved
in accordance with PRC legal procedures. The legal system in the PRC is not as developed as in some other jurisdictions, such as the United
States. As a result, uncertainties in the PRC legal system could limit our ability to enforce these contractual arrangements. Meanwhile,
there are very few precedents and little formal guidance as to how contractual arrangements in the context of a VIE should be interpreted
or enforced under PRC law, and our contractual arrangements have not been tested in court. There remain significant uncertainties regarding
the ultimate outcome of such arbitration should legal action become necessary. In addition, under PRC law, rulings by arbitrators are
final, parties cannot appeal the arbitration results in courts, and if the losing parties fail to carry out the arbitration awards within
a prescribed time limit, the prevailing parties may only enforce the arbitration awards in PRC courts through arbitration award recognition
proceedings, which would require additional expenses and delay. In the event we are unable to enforce these contractual arrangements,
or if we suffer significant delay or other obstacles in the process of enforcing these contractual arrangements, we may not be able to
exert effective control over the VIEs, and our ability to conduct our business may be negatively affected.
8
In the event we are unable to enforce the
contractual arrangements with VIEs, we may not be able to exert effective control over the VIEs. If the government of the PRC finds that
VIE Agreements do not comply with PRC laws, we could be subject to significant penalties or be forced to relinquish our interests in those
operations or we could be unbale to assert our contractual control rights over the VIEs.
We do not own any direct equity
interest in VIEs. Instead, we control and receive the economic benefits of VIEs' business operations through certain contractual
arrangements in lieu of direct equity ownership. A VIE is an entity that has either a total equity investment that is insufficient
to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics
of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation
to absorb the expected losses of the entity. We have the power to direct activities at VIEs that most significantly impact VIEs'
economic performance, and has the right to receive benefits from VIEs. As such, we exert control over VIEs and is the primary beneficiary
of the VIEs, for accounting purposes, based upon such contractual arrangements. All the agreements under our contractual arrangements
with the VIEs and their equity owners are governed by PRC law and provide for the resolution of disputes through arbitration
in China. Accordingly, these contracts would be interpreted in accordance with PRC law and any disputes would be resolved in accordance
with PRC legal procedures. As of the date hereof, the agreements governed by PRC law that serve as the basis for a VIE arrangement have
not been tested in a court of law. As a result, uncertainties in the PRC legal system could limit our ability to enforce these contractual
arrangements. Currently, there are very few precedents and little formal guidance as to how contractual arrangements in the context of
a VIE should be interpreted or enforced under PRC law. There remain significant uncertainties regarding the ultimate outcome of such arbitration
should legal action become necessary. In the event we are unable to enforce these contractual arrangements, or if we suffer significant
delay or other obstacles in the process of enforcing these contractual arrangements, we may not be able to exert effective control over the
VIEs. These uncertainties or an adverse outcome of an arbitration may adversely affect our operations.
If we or any of our VIEs are
found to be in violation of any existing or future local laws or regulations, the relevant regulatory authorities might have the discretion
to:
●
revoke the business and operating licenses of the VIEs;
●
confiscate relevant income and impose fines and other penalties;
●
discontinue or restrict the operations of the VIEs;
●
require us or the VIEs to restructure the relevant ownership structure or operations;
●
restrict or prohibit our ability to finance our businesses and operations in the relevant jurisdiction; or
●
impose conditions or requirements with which we or VIEs may not be able to comply.
If the government of the PRC
finds that VIE Agreements, do not comply with PRC laws, or if these regulations or the interpretation of existing regulations change in
the future, we could be subject to significant penalties or be forced to relinquish our interests in those operations or we could be unbale
to assert our contractual control rights over the VIEs, which could cause the value of our common stock to depreciate significantly.
Risks Related to Doing Business in China
The PRC government
has significant authority to regulate or intervene in the China operations of an offshore holding company, such as us, at any time. Therefore,
investors in our ordinary shares and our business face potential uncertainty from the PRC government's policy.
We conduct our operations
in China through our PRC subsidiaries and VIEs. Our operations in China are governed by PRC laws and regulations. The PRC government's
significant oversight over our business operation could result in a material adverse change in our operations and the value of our ordinary
shares. The Chinese government may intervene or influence the operation of our operating entities and exercise significant oversight and
discretion over the conduct of their business and may intervene in or influence their operations at any time or may exert more control
over offerings conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in operations
and/or the value of our shares. Further, any actions by the Chinese government to exert more oversight and control over offerings that
are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to
offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.
9
On December 24, 2021, the
China Securities Regulatory Commission (the "CSRC") issued the Administrative Provisions of the State Council Regarding the
Overseas Issuance and Listing of Securities by Domestic Enterprises (Draft for Comments) (the "Draft Administrative Provisions")
and the Measures for the Overseas Issuance of Securities and Listing Record-Filings by Domestic Enterprises (Draft for Comments) (the
"Draft Filing Measures," collectively with the Draft Administrative Provisions, the "Overseas Issuance and Listing Regulations
Drafts"), which are currently published for public comments only. According to the Overseas Issuance and Listing Regulations Drafts,
among other things, after making initial applications with overseas stock markets for initial public offerings or any offerings after
the initial public offering, all domestic companies shall file with the CSRC within three working days. The Overseas Issuance and Listing
Regulations Drafts further stipulate that a fine between RMB 1 million and RMB 10 million may be imposed if an applicant fails to fulfill
the filing requirements with the CSRC or conducts an overseas offering or listing in violation of the Overseas Issuance and Listing Regulations
Drafts, and in cases of severe violations, a parallel order to suspend relevant businesses or halt operations for rectification may be
issued, and relevant business permits or operational licenses revoked. The Overseas Issuance and Listing Regulations Drafts, if enacted,
may subject us to additional compliance requirements in the future, and though we believe that none of the situations that would significantly
limit our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline
or be worthless.
Furthermore, the Ministry
of Commerce ("MOFCOM") and the National Development and Reform Commission ("NDRC") promulgated the Special Administrative
Measures for Access of Foreign Investment (2021 Edition), or the Negative List (2021), stipulates that if a domestic enterprise engaged
in business in the prohibited investment field issues shares abroad and is listed for trading, it shall be examined and approved by the
relevant competent authorities of the state. According to a press release issued by the NDRC in relation to the Negative List (2021),
the above provisions are only applicable to the direct overseas listing of domestic enterprises engaged in the prohibited investment field.
We believe our listing on Nasdaq does not constitute a direct overseas listing of domestic enterprises mentioned in the above press release
and therefore we are not subject to the examination and approval by the relevant competent authorities of the state in accordance with
the Negative List (2021). However, the above regulations and drafts for comments also indicate the intention of the Chinese government
to increase its regulation of offshore investment in company's utilizing the VIE structure to participate in the prohibited investment
fields. If relevant governmental authority determines or new future rules provides that we are required to obtain the approval, we would
have to apply for such approval. There is no assurance that we will be able to obtain such approval in time or at all. If we fail to obtain
the approve as required or in a timely manner, the VIE arrangement may be deemed illegal and ordered to be cancelled by relevant government
authorities, and other administrative measures or penalties may be imposed on us, which could materially and adversely affect our business,
financial condition, results of operations and the value of our shares. Any failure of us to fully comply with new regulatory requirements
may significantly limit or completely hinder our ability to offer or continue to offer our shares, cause significant disruption to our
business operations, severely damage our reputation, materially and adversely affect our financial condition and results of operations
and cause our shares to significantly decline in value or become worthless.
The new, stricter regulations
or interpretations of existing regulations imposed by the central or local governments may require additional expenditures and efforts
on our part to ensure our compliance with such regulations or interpretations, and if relevant regulations are issued and become effective
in a short notice, we may not be able to take the required actions in a timely manner without allocating significant resource.
The Chinese economy differs from the economies
of most developed countries in many respects, including a higher level of government involvement, the ongoing development of a market-oriented
economy, a higher level of control over foreign exchange, and a less efficient allocation of resources.
While the PRC economy has
experienced significant growth since the late 1970s, growth has been uneven, both geographically and among various sectors of the economy.
The PRC government has implemented various measures to encourage economic growth and guide the allocation of resources. These measures
are intended to benefit the overall PRC economy, but may also have a negative effect on us. For example, our business, financial condition
and results of operations could be adversely affected by PRC government control over capital investments or changes in regulations that
are applicable to us. The PRC economy has been transitioning from a centrally planned economy to a more market-oriented economy. Although
the PRC government has implemented measures since the late 1970s that emphasize the utilization of market forces for economic reform,
the PRC government continues to play a significant role in regulating industry development by imposing industrial policies. The PRC government
also exercises significant control over China's economic growth through the allocation of resources, controlling payment of foreign
currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies.
Substantial uncertainties
and restrictions with respect to the political and economic policies of the PRC government and PRC laws and regulations could have a significant
impact upon the business the Company may be able to conduct in the PRC and accordingly on the results of its operations and financial
condition.
The Company's business
operations may be adversely affected by the current and future political environment in the PRC. The Chinese government exerts substantial
influence and control over the manner in which the Company must conduct its business activities. The Company's ability to operate
in China may be adversely affected by changes in Chinese laws and regulations. Under the current government leadership, the government
of the PRC has been pursuing economic reform policies that encourage private economic activities and greater economic decentralization.
However, the government of the PRC may not continue to pursue these policies, or may significantly alter these policies from time to time
without notice.
10
There are certain uncertainties
regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws and regulations governing
the Company's business, or the enforcement and performance of the Company's arrangements with clients. Only after 1979 did
the Chinese government begin to promulgate a comprehensive system of laws that regulate economic affairs in general, deal with economic
matters such as foreign investment, corporate organization and governance, commerce, taxation and trade, as well as encourage foreign
investment in China. Although the influence of the law has been increasing, China has not developed a fully integrated legal system and
recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China. Also, because these laws
and regulations are relatively new, and because of the limited volume of published cases and their lack of force as precedents, interpretation
and enforcement of these laws and regulations involve significant uncertainties. New laws and regulations that affect existing and proposed
future businesses may also be applied retroactively. In addition, there have been constant changes and amendments of laws and regulations
over the past 30 years in order to keep up with the rapidly changing society and economy in China. Because government agencies and courts
provide interpretations of laws and regulations and decide contractual disputes and issues, their inexperience in adjudicating new business
and new polices or regulations in certain less developed areas causes uncertainty and may affect the Company's business. Consequently,
we cannot predict the future direction of Chinese legislative activities with respect to either businesses with foreign investment or
the effectiveness on enforcement of laws and regulations in China. The uncertainties, including new laws and regulations and changes of
existing laws, as well as judicial interpretation by inexperienced officials in the agencies and courts in certain areas, may cause possible
problems to foreign investors.
There are uncertainties under the PRC laws
relating to the procedures and time requirement for the U.S. regulators to bring about investigations and evidence collection within the
territory of the PRC.
On December 28, 2019, the
newly amended Securities Law of the PRC (the "PRC Securities Law") was officially promulgated, which became effective on March
1, 2020. According to Article 177 of the PRC Securities Law ("Article 177"), the securities regulatory authority of the State
Council may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement
cross-border supervision and administration. Article 177 further provides that overseas securities regulatory authorities may not carry
out investigations and evidence collection directly within the territory of the PRC, and that no Chinese entity or individual is allowed
to provide any documents or materials related to securities business activities to overseas agencies without prior consent of the securities
regulatory authority of the State Council and the competent departments of the State Council. Moreover, the Civil Procedure Law of the
PRC, promulgated in 1991 and last amended in 2017, provides that except for the request for and provision of judicial assistance in accordance
with international treaties concluded or participated by the PRC, or via diplomatic channels, no foreign agency or individual may, without
the consent of the competent authorities of the PRC, carry out investigation or collect evidence within the territory of the PRC.
It is our understanding that
(i) the Article 177 is applicable in the circumstances related to direct investigation or evidence collection conducted by overseas authorities
within the territory of the PRC (in such case, the foregoing activities are required to be conducted through collaboration with or by
obtaining prior consent of competent PRC authorities) and (ii) as of the date of this annual report, we are not aware of any implementing
rules or regulations which have been published regarding application of the Article 177.
Our principal business operation
is conducted in the PRC. In the event that the U.S. regulators carry out investigation on us and there is a need to conduct investigation
or collect evidence within the territory of the PRC, the U.S. regulators may not be able to carry out the investigation or evidence collection
directly in the PRC under the PRC laws. The U.S. regulators may consider cross-border cooperation with securities regulatory authority
of the PRC by way of judicial assistance, diplomatic channels or regulatory cooperation mechanism established with the securities regulatory
authority of the PRC. However, there is no assurance that the U.S. regulators could succeed in establishing such cross-border cooperation
in a specific case or could establish the cooperation in a timely manner.
Furthermore, as the Article
177 is relatively new and there is no implementing rules or regulations which have been published regarding application of the Article
177, it remains unclear how the law will be interpreted, implemented or applied by the Chinese Securities Regulatory Commission or other
relevant government authorities. As such, there are uncertainties as to the procedures and time requirement for the U.S. regulators to
bring about investigations and evidence collection within the territory of the PRC. If U.S. regulators are unable to conduct such investigations,
such U.S. regulators may determine to suspend and ultimately delist our ordinary shares from the Nasdaq Capital Market or choose to suspend
or de-register our SEC registration.
11
If any of our subsidiaries
fails to maintain the requisite registered capital, licenses and approvals required under PRC law, our business, financial condition and
results of operations may be materially and adversely affected.
Numerous regulatory authorities
of the central PRC government, provincial and local authorities are empowered to issue and implement regulations governing various aspects
of the financial industry. Each of our subsidiaries may be required to obtain and maintain certain assets relevant to its business as
well as applicable licenses or approvals from different regulatory authorities in order to provide its current services. These registered
capitals, licenses and approvals will be essential to the operation of the Company's business. If any of our subsidiaries fails
to obtain or maintain any of the required registered capital, licenses or approvals for its business, it may be subject to various penalties,
such as confiscation of illegal net revenue, fines and the discontinuation or restriction of its operations. Any such disruption in its
business operations could materially and adversely affect our business, financial condition and results of operations.
The failure to
comply with PRC regulations relating to mergers and acquisitions of domestic enterprises by offshore special purpose vehicles may subject
the Company to severe fines or penalties and create other regulatory uncertainties regarding the Company's corporate structure.
On August 8, 2006, the MOFCOM,
joined by the China Securities Regulatory Commission ("CSRC"), the State-owned Assets Supervision and Administration Commission
of the State Council, the State Administration of Taxation ("SAT"), the State Administration for Industry and Commerce (the
"SAIC"), and the State Administration of Foreign Exchange ("SAFE"), jointly promulgated regulations entitled the
Provisions Regarding Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the "M&A Rules"), which took
effect as of September 8, 2006, and as amended on June 22, 2009. This regulation, among other things, has certain provisions that require
offshore companies formed for the purpose of acquiring PRC domestic companies and controlled directly or indirectly by PRC individuals
and companies which are the related parties with the PRC domestic companies, to obtain the approval of MOFCOM prior to engaging in such
acquisitions and to obtain the approval of the CSRC prior to publicly listing special purpose vehicles' securities on an overseas
stock market. On September 21, 2006, the CSRC published on its official website a notice specifying the documents and materials that are
required to be submitted for obtaining CSRC approval.
If prior CSRC approval for
overseas financings is required and not obtained, the Company may face severe regulatory actions or other sanctions from MOFCOM, the CSRC
or other PRC regulatory agencies. In such event, these regulatory agencies may impose fines or other penalties on the Company's
operations in the PRC, limit the Company's operating privileges in the PRC, delay or restrict the repatriation of the proceeds from
overseas financings into the PRC, restrict or prohibit payment or remittance of dividends to us or take other actions that could have
a material adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading
price of our ordinary shares. The CSRC or other PRC regulatory agencies may also take actions requiring us, or making it advisable for
us, to delay or cancel overseas financings, to restructure the Company's corporate structure, or to seek regulatory approvals that
may be difficult or costly to obtain.
The M&A Rules, along with
certain foreign exchange regulations discussed below, will be interpreted or implemented by the relevant government authorities in connection
with our future offshore financings or acquisitions, and we cannot predict how they will affect our acquisition strategy.
The M&A Rules
and certain other PRC regulations establish complex procedures for some acquisitions of PRC companies by foreign investors, which could
make it more difficult for us to pursue growth through acquisitions in China.
The M&A Rules and relevant
regulations and rules concerning mergers and acquisitions established additional procedures and requirements that could make merger and
acquisition activities by foreign investors more time-consuming and complex. The M&A Rules require that MOFCOM be notified in advance
of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise, if (i) any
important industry is concerned, (ii) such transaction involves factors that have or may have an impact on the national economic
security; or (iii) such transaction will lead to a change in control of a domestic enterprise which holds a famous trademark or PRC
time-honored brand. The approval from MOFCOM shall be obtained in circumstances where overseas companies established or controlled by
PRC enterprises or residents acquire affiliated domestic companies.
12
The Anti-Monopoly Law promulgated
by the Standing Committee of the National People's Congress, or NPC, which became effective in August 2008, requires that when a
concentration of undertakings occurs and reaches statutory thresholds, the undertakings concerned shall file a prior notification with
the anti-monopoly enforcement agency of the State Council. Without the clearance from such agency, no concentration of undertakings shall
be implemented and effected. Mergers, acquisitions or contractual arrangements that allow one market player to take control of or to exert
decisive impact on another market player must also be notified in advance to the anti-monopoly enforcement agency of the State Council,
when the threshold under the Provisions on Thresholds for Prior Notification of Concentrations of Undertakings, or the Prior Notification
Rules, issued by the State Council in August 2008 and amended in September 2018 is triggered. If such prior notification is not obtained,
the anti-monopoly enforcement agency may order the concentration to cease its operations, dispose of shares or assets, transfer the business
of the concentration within a time limit, take any other necessary measures to restore the situation as it was before the concentration,
and may impose administrative fines. We also have not implemented monopolistic behaviors including monopoly agreements, abuse of a dominant
position and concentration of undertakings that may have the effect to eliminate or restrict competition in the field of platform economy.
However, since we anticipate that long term success in China's market will require consolidation of the many small participants
in that market, and our goal is to be one of the survivors of that consolidation, when it happens. Aggressive enforcement of new anti-monopoly
regulations could interfere with our ability to achieve that goal. As of the date of this report, we have not been involved in any investigations
on anti-monopoly initiated by the related governmental regulatory authorities, and we have not received any inquiry, notice, warning,
or sanction in such respect.
In addition, the Implementing
Rules Concerning Security Review on the Mergers and Acquisitions by Foreign Investors of Domestic Enterprises, issued by the MOFCOM in
August 2011, specify that mergers and acquisitions by foreign investors involved in "an industry related to national security"
are subject to strict review by the MOFCOM, and prohibit any activities attempting to bypass such security review, including by structuring
the transaction through a proxy or contractual control arrangement. In the future, we may grow our business by acquiring complementary
businesses. Complying with the requirements of the abovementioned regulations and other relevant rules to complete such transactions could
be time-consuming, and any required approval processes, including obtaining approval from the MOFCOM or its local counterparts may delay
or inhibit our ability to complete such transactions.
We cannot preclude the possibility
that the MOFCOM or other government agencies may publish explanations contrary to our understanding or broaden the scope of such security
reviews in the future, in which case our future acquisitions in the PRC, including those by way of entering into contractual control arrangements
with target entities, may be closely scrutinized or prohibited. Our ability to expand our business or maintain or expand our market share
through future acquisitions would as such be materially and adversely affected.
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.
The Regulations on Mergers and Acquisitions of
Domestic Companies by Foreign Investors (the "M&A Rules"), adopted by six PRC regulatory agencies in 2006 and amended
in 2009, include, among other things, provisions that purport to require that an offshore special purpose vehicle, formed for the purpose
of an overseas listing of securities through acquisitions of PRC domestic enterprises or assets and controlled by PRC enterprises 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. On September 21, 2006, pursuant to the M&A Rules and other PRC laws, the CSRC published on its official website relevant
guidance regarding its approval of the listing and trading of special purpose vehicles' securities on overseas stock exchanges,
including a list of application materials. However, substantial uncertainty remains regarding the scope and applicability of the M&A
Rules to offshore special purpose vehicles. If the CSRC approval is required for any of our future offering of securities overseas or
to maintain our offshore listing status on U.S. exchanges, 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, may subject us to sanctions imposed by the CSRC or other
PRC regulatory authorities, which 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. These opinions and any related
implementation rules to be enacted may subject us to additional compliance requirement in the future. As these opinions were recently
issued, official guidance to act upon and the interpretation thereof remain unclear at this time. We cannot assure that we will remain
fully compliant with all new regulatory requirements of these opinions or any future implementation rules on a timely basis, or at all.
13
On February 17, 2023, the CSRC issued the Trial
Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the "Trial Administrative Measures")
and relevant supporting guidelines (together with the Trial Administrative Measures, the "New Administrative Rules Regarding Overseas
Listings"), which came into effective on March 31, 2023. According to the New Administrative Rules Regarding Overseas Listings,
a company based in the mainland of China that seeks to offer and list securities in overseas markets should fulfill the filing procedure
with the CSRC as per requirement of the Trial Administrative Measures. In particular, where a domestic company seeks to indirectly offer
and list securities in overseas markets, the issuer should designate a major domestic operating entity as the domestic responsible entity
to file with the CSRC. Initial public offerings or listings in overseas markets should be filed with the CSRC within 3 working days after
the relevant application is submitted overseas. Subsequent securities offerings of an issuer in the same overseas market where it has
previously offered and listed securities should be filed with the CSRC within 3 working days after the offering is completed. The required
filing materials with the CSRC include (without limitation) record-filing reports and related undertakings and PRC legal opinions issued
by domestic law firms (with related undertakings), in which the VIE structure (if applicable) and reasons and risk factor thereof is required
to be clarified in details. In addition, under the New Administrative Rules Regarding Overseas Listings, a domestic company is prohibited
from overseas offering and listing if any of the following circumstances is involved: (1) where such securities offering and listing is
explicitly prohibited by provisions in laws, administrative regulations and relevant state rules; (2) where the intended securities offering
and listing may endanger national security as reviewed and determined by competent authorities under the State Council in accordance with
law; (3) where the domestic company intending to make the securities offering and listing, or its controlling shareholders and the actual
controller, have committed crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining the order of
the socialist market economy during the latest three years; (4) where the domestic company intending to make the securities offering and
listing is suspected of committing crimes or major violations of laws and regulations, and is under investigation according to law, and
no conclusion has yet been made thereof; and (5) where there are material ownership disputes over equity held by the domestic company's
controlling shareholder or by other shareholders that are controlled by the controlling shareholder and/or actual controller. Moreover,
a domestic company that seeks to offer and list securities in overseas markets should abide by certain other regulatory requirements as
set out in the New Administrative Rules Regarding Overseas Listings, including without limitation to, compliance with national secrecy,
foreign investment, cybersecurity, data security, cross-border investment and financing, foreign exchange, and other laws and relevant
provisions. Based on the New Administrative Rules Regarding Overseas Listings, we will be subject to additional filing requirements in
connection with this offering and our follow-up offerings completed after such effective date, and we cannot assure you that we will be
able to get the clearance of filing procedures under the New Administrative Rules Regarding Overseas Listings on a timely basis, or at
all. Any failure of us to fully comply with new regulatory requirements will result in rectification, warnings and fines on our subsidiaries
or VIEs, and may significantly limit or completely hinder our ability to continue to offer our securities, cause significant disruption
to our business operations, and severely damage our reputation, which would materially and adversely affect our consolidated financial
condition and results of operations and cause our securities to significantly decline in value or become worthless.
On December 27, 2021, the NDRC and MOFCOM jointly
issued the Negative List (2021 Version), which became effective on January 1, 2022. Pursuant to the Negative List (2021 Version), if a
PRC company engaging in the prohibited business stipulated in the Negative List (2021 Version) seeks an overseas offering and listing,
it shall obtain the approval from the competent governmental authorities. The foreign investors of the issuer shall not be involved in
the company's operation and management, and their shareholding percentages shall be subject, mutatis mutandis, to the relevant regulations
on the domestic securities investments by foreign investors. As the 2021 Negative List is relatively new, there remain substantial uncertainties
as to the interpretation and implementation of these new requirements, and it is unclear as to whether and to what extent listed companies
like us will be subject to these new requirements. If we are required to comply with these requirements and fail to do so on a timely
basis, if at all, our business operation, financial condition and business prospect may be adversely and materially affected.
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 annual data security review under the Administrative Measures for Internet Data Security (Draft for Comments),
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, may subject us to sanctions by the CSRC or other PRC regulatory authorities, which could materially and adversely affect our business,
results of operations, financial condition 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.
14
You may experience
difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions against us or our management,
in China, based upon United States laws, including the U.S. federal securities laws, or other foreign laws.
We are a company organized
under the laws of the Cayman Islands. Substantially all of our operations are conducted in China, and substantially all of our assets
are located in China. None of our subsidiaries is organized under the laws of the United States. All of our directors and officers reside
in China, and substantially all of the assets of those persons are located outside of the United States. As a result, it may be difficult
for a shareholder to effect service of process within the United States upon these persons, or to enforce judgments against us which are
obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United
States or any state in the United States. Furthermore, the recognition and enforcement of foreign judgments are provided for under the
PRC Civil Procedures Law. PRC courts may recognize and enforce foreign judgments in accordance with the requirements of the PRC Civil
Procedures Law based either on treaties between China and the country where the judgment is made or on principles of reciprocity between
jurisdictions. China does not have any treaties or other form of reciprocity with the United States providing for the reciprocal recognition
and enforcement of foreign judgments. In addition, according to the PRC Civil Procedures Law, courts in the PRC will not enforce a foreign
judgment against us or our directors or officers if they decide that the judgment violates the basic principles of PRC laws, national
sovereignty, security or public interest. As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment
rendered by a court in the United States. Lastly, in the event shareholders originate an action against a company without domicile in
China for disputes related to contracts or other property interests, the PRC courts may accept a cause of action if (a) the disputed contract
is concluded or performed in the PRC or the disputed subject matter is located in the PRC, (b) the company (as defendant) has properties
that can be seized within the PRC, (c) the company has a representative organization within the PRC, or (d) the parties chose to submit
to the jurisdiction of the PRC courts in the contract on the condition that such submission does not violate the requirements of jurisdiction
under the PRC Civil Procedures Law. The action may be initiated by the shareholder by filing a complaint with the PRC courts. The PRC
courts would determine whether to accept the complaint in accordance with the PRC Civil Procedures Law. The shareholder may participate
in the action by itself or entrust any other person or PRC legal counsel to participate on behalf of such shareholder. Foreign citizens
and companies will have the same rights as PRC citizens and companies in such an action unless such foreign country restricts the rights
of PRC citizens and companies.
We and our shareholders
face uncertainties with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.
On February 3, 2015, the State
Administration of Taxation issued an Announcement on Several Issues Concerning Enterprise Income Tax on Income Arising from Indirect Transfers
of Property by Non-PRC Resident Enterprises, or Announcement 7, with the same effective date. Under Announcement 7, an "indirect
transfer" refers to a transaction where a non-resident enterprise transfers its equity interest and other similar interest in an
offshore holding company, which directly or indirectly holds Chinese taxable assets (the assets of an "establishment or place"
situated in China; real property situated in China and equity interest in Chinese resident enterprises) and any indirect transfer without
reasonable commercial purposes are subject to the PRC taxation. In addition, Announcement 7 specifies the conditions under which an indirect
transfer is deemed to lack a reasonable commercial purpose which include: (1) 75% or more of the value of the offshore holding company's
equity is derived from Chinese taxable assets, (2) anytime in the year prior to the occurrence of the indirect transfer of Chinese
taxable assets, 90% or more of the total assets (excluding cash) of the offshore holding company are direct or indirect investment in
China, or 90% or more of the revenue of the offshore holding company was sourced from China; (3) the functions performed and risks assumed
by the offshore holding company(ies), although incorporated in an offshore jurisdiction to conform to the corporate law requirements there,
are insufficient to substantiate their corporate existence and (4) the foreign income tax payable in respect of the indirect transfer
is lower than the Chinese tax which would otherwise be payable in respect of the direct transfer if such transfer were treated as a direct
transfer. As a result, gains derived from such indirect transfer will be subject to PRC enterprise income tax, currently at a rate of
10%.
Announcement 7 grants a safe
harbor under certain qualifying circumstances, including transfers in the public securities market and certain intragroup restricting
transactions, however, there is uncertainty as to the implementation of Announcement 7. For example, Announcement 7 requires the buyer
to withhold the applicable taxes without specifying how to obtain the information necessary to calculate taxes and when the applicable
tax shall be submitted. Announcement 7 may be determined by the tax authorities to be applicable to our offshore restructuring transactions
or sale of the shares of our offshore subsidiaries where non-resident enterprises, being the transferors, were involved. Though Announcement
7 does not impose a mandatory obligation of filing the report of taxable events, the transferring party shall be subject to PRC withholding
tax if the certain tax filing conditions are met. Non-filing may result in an administrative penalty varying from 50% to 300% of unpaid
taxes. As a result, we and our non-resident enterprises in such transactions may become at risk of being subject to taxation under Announcement
7, and may be required to expend valuable resources to comply with Announcement 7 or to establish that we and our non-resident enterprises
should not be taxed under Announcement 7, for any restructuring or disposal of shares of our offshore subsidiaries, which may have a material
adverse effect on our financial condition and results of operations.
PRC laws and regulations
have established more complex procedures for certain acquisitions of Chinese companies by foreign investors, which could make it more
difficult for the Company to pursue growth through acquisitions in China.
Further to the Regulations
on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the New M&A Rules, the Anti-monopoly Law of the PRC,
the Rules of Ministry of Commerce on Implementation of Security Review System of Mergers and Acquisitions of Domestic Enterprises by Foreign
Investors promulgated by MOFCOM or the MOFCOM Security Review Rules, was issued in August 2011, which established additional procedures
and requirements that are expected to make merger and acquisition activities in China by foreign investors more time-consuming and complex,
including requirements in some instances that MOFCOM be notified in advance of any change of control transaction in which a foreign investor
takes control of a PRC enterprise, or that the approval from MOFCOM be obtained in circumstances where overseas companies established
or controlled by PRC enterprises or residents acquire affiliated domestic companies. PRC laws and regulations also require certain merger
and acquisition transactions to be subject to merger control review and or security review.
15
The MOFCOM Security Review
Rules, effective from September 1, 2011, which implement the Notice of the General Office of the State Council on Establishing the Security
Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors promulgated on February 3, 2011, further provide
that, when deciding whether a specific merger or acquisition of a domestic enterprise by foreign investors is subject to the security
review by MOFCOM, the principle of substance over form should be applied and foreign investors are prohibited from bypassing the security
review requirement by structuring transactions through proxies, trusts, indirect investments, leases, loans, control through agreements
control or offshore transactions.
Further, if the business of
any target company that the Company seeks to acquire falls into the scope of security review, the Company may not be able to successfully
acquire such company either by equity or asset acquisition, capital contribution or through any VIE Agreement. The Company may grow its
business in part by acquiring other companies operating in its industry. Complying with the requirements of the relevant regulations to
complete such transactions could be time consuming, and any required approval processes, including approval from MOFCOM, may delay or
inhibit its ability to complete such transactions, which could affect its ability to maintain or expand its market share.
In addition, SAFE promulgated
the Circular on the Settlement of Foreign Currency Capital of Foreign-invested Enterprises, or Circular 19, on June 1, 2015. Under Circular
19 (partly modified by Huifa No.39 [2019]), registered capital of a foreign-invested company settled in RMB converted from foreign currencies
may only be used within the business scope approved by the applicable governmental authority and the equity investments in the PRC made
by the foreign-invested company shall be subject to the relevant laws and regulations about the foreign-invested company's reinvestment
in the PRC. In addition, foreign-invested companies cannot use such capital to make the investments on securities, and cannot use such
capital to issue the entrusted RMB loans (except approved in its business scope), repay the RMB loans between the enterprises and the
ones which have been transferred to the third party. Circular 19 may significantly limit our ability to effectively use the proceeds from
future financing activities as the Chinese subsidiaries may not convert the funds received from us in foreign currencies into RMB, which
may adversely affect their liquidity and our ability to fund and expand our business in the PRC.
Governmental control
of currency conversion may affect the value of your investment.
Currently, the RMB cannot
be freely converted into any foreign currency. The PRC government imposes controls on the convertibility of RMB into foreign currencies
and, in certain cases, the remittance of currency out of China. Shortages in the availability of foreign currency may restrict the ability
of our PRC subsidiary to remit sufficient foreign currency to pay dividends or other payments to us, or otherwise satisfy their foreign
currency dominated obligations. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions,
interest payments and expenditures from trade-related transactions, can be made in foreign currencies without prior approval from the
PRC State Administration of Foreign Exchange, or SAFE, by complying with certain procedural requirements. However, for most capital account
items, approval from or registration with appropriate government authorities is required where RMB is to be converted into foreign currency
and remitted out of China to pay capital expenses such as the repayment of bank loans denominated in foreign currencies. The PRC government
may also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange
control system prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends
in foreign currencies to our shareholders, including holders of the ordinary shares.
The U.S. law and
regulations, including the Holding Foreign Companies Accountable Act, call for additional and more stringent criteria to be applied to
emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by
the PCAOB. These developments could add uncertainties to our capital raising activities and compliance costs.
On April 21, 2020, SEC
Chairman Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting
the risks associated with investing in companies based in or have substantial operations in emerging markets including China. The joint
statement emphasized the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers in China and higher
risks of fraud in emerging markets.
On May 18, 2020, NYSE
American filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating in "Restrictive
Market", (ii) adopt a new requirement relating to the qualification of management or board of director for Restrictive Market companies,
and (iii) apply additional and more stringent criteria to an applicant or listed company based on the qualifications of the company's
auditors.
16
On May 20, 2020, the U.S.
Senate passed the Holding Foreign Companies Accountable Act requiring a foreign company to certify it is not owned or controlled by a
foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to PCAOB inspection.
If the PCAOB is unable to inspect the Company's auditors for three consecutive years, the issuer's securities are prohibited
to trade on a U.S. stock exchange. On December 2, 2020, the U.S. House of Representatives approved the Holding Foreign Companies Accountable
Act. On December 18, 2020, the Holding Foreign Companies Accountable Act was signed into law.
On March 24, 2021, the
SEC announced that it had adopted interim final amendments to implement congressionally mandated submission and disclosure requirements
of the Act. The interim final amendments will apply to registrants that the SEC identifies as having filed an annual report on Forms
10-K, 20-F, 40-F or N-CSR with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction
and that the PCAOB has determined it is unable to inspect or investigate completely because of a position taken by an authority in that
jurisdiction. The SEC will implement a process for identifying such a registrant and any such identified registrant will be required to
submit documentation to the SEC establishing that it is not owned or controlled by a governmental entity in that foreign jurisdiction
and will also require disclosure in the registrant's annual report regarding the audit arrangements of, and governmental influence
on, such a registrant.
On June 22, 2021, the
U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, or the AHFCAA, which
was
enacted on December 29, 2022 under the Consolidated Appropriations Act, 2023, and amended
the HFCAA to decrease
the number of non-inspection years under the HFCAA from three years to two, thus reducing the time period before an issuer's securities
may be prohibited from trading on any U.S. securities exchange or any U.S. over-the-counter market or delisted.
On December 2, 2021, the
SEC adopted amendments to finalize the rules implementing the submission and disclosure requirements of the HFCAA. The rules will 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 the PCAOB is unable to inspect or investigation such registered public accounting
firm, such SEC identified registrants are referred to as Commission-Identified Issuers. The final amendments require that Commission-Identified
Issuers submit documentation to the SEC establishing, among other things, that, if true, it is not owned or controlled by a governmental
entity in the public accounting firm's foreign jurisdiction and if the Commission-Identified Issuer is a "foreign issuer,"
as defined in Exchange Act Rule 3b-4, to provide certain additional disclosures in its annual report.
On December 16, 2021,
the PCAOB issued a HFCAA Determination Report, pursuant to 15 U.S.C. Section 7214(i)(2)(A) and PCAOB Rule 6100 (the "Report").
Pursuant to the Report, the PCAOB notified the U.S. Securities and Exchange Commission that it issued two determinations that (1) the
PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in mainland China of the PRC because
of a position taken by one or more authorities in mainland China (the "Mainland China Determination") and (2) the PCAOB is
unable to inspect or investigate completely registered public accounting firms headquartered in Hong Kong, a Special Administrative Region
of the PRC, because of a position taken by one or more authorities in Hong Kong (the "Hong Kong Determination"). In its two
appendixes the Report identifies the auditors that are subject to the Mainland China Determination and the Hong Kong Determination.
The
lack of access to the PCAOB inspection in China prevents the PCAOB from fully evaluating audits and quality control procedures of the
auditors based in China. As a result, the investors may be deprived of the benefits of such PCAOB inspections. The inability of the PCAOB
to conduct inspections of auditors in China makes it more difficult to evaluate the effectiveness of these accounting firms' audit
procedures or quality control procedures as compared to auditors outside of China that are subject to the PCAOB inspections, which could
cause existing and potential investors in our share to lose confidence in our audit procedures and reported financial information and
the quality of our financial statements.
17
On August 26, 2022, the PCAOB announced
that it had signed a Statement of Protocol (the "SOP") with the China Securities Regulatory Commission and the Ministry of
Finance of China. The SOP, together with two protocol agreements governing inspections and investigations (together, the "SOP
Agreement"), establishes a specific, accountable framework to make possible complete inspections and investigations by the PCAOB of
audit firms based in mainland China and Hong Kong, as required under U.S. law.  The SOP Agreement remains unpublished and is subject
to further explanation and implementation. Pursuant to the fact sheet with respect to the SOP Agreement disclosed by the SEC, the
PCAOB shall have sole discretion to select any audit firms for inspection or investigation and the PCAOB inspectors and investigators
shall have a right to see all audit documentation without redaction. On December 15, 2022, the PCAOB announced that PCAOB has secured
complete access to inspect and investigate public accounting firms headquartered in mainland China and Hong Kong, and vacated previous
determinations to the contrary.
Our auditor, the independent
registered public accounting firms that issue the audit report included elsewhere in this annual report, as an auditor of companies that
are traded publicly in the United States and a firm registered with the PCAOB, are subject to laws in the United States pursuant to which
the PCAOB conducts regular inspections to assess our auditors' compliance with the applicable professional standards.
However, the recent developments
would add uncertainties to our offering, and we cannot assure you whether Nasdaq or regulatory authorities would apply additional and
more stringent criteria to us after considering the effectiveness of our auditor's audit procedures and quality control procedures,
adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial
statements. In addition, any additional actions, proceedings, or new rules resulting from the efforts to increase U.S. regulatory access
to audit information could create some uncertainty for investors, the market price of our ordinary share could be adversely affected,
and we could be delisted if we and our auditor are unable to meet the PCAOB inspection requirement or being required to engage a new audit
firm, which would require significant expense and management time.
Various proceedings
and legislative and regulatory developments due to political tensions between the U.S. and China may have an adverse impact on our listing
and trading in the U.S., including adverse impact on the market prices of the ordinary shares.
Political tensions between
the United States and China have escalated due to, among other things, trade disputes, the COVID-19 outbreak, sanctions imposed by
the U.S. Department of Treasury on certain officials of the Hong Kong Special Administrative Region and the central government of the
PRC and the executive orders issued by the former U.S. President Donald J. Trump in August 2020 that prohibit certain transactions with
certain Chinese companies and their applications. Rising political tensions could reduce levels of trade, investment, technological exchange
and other economic activities between the two major economies, which would have a material adverse effect on global economic conditions
and the stability of global financial markets. Any of these factors could have a material adverse effect on our business, prospects, financial
condition and results of operations.
18
Cyber-attacks,
computer viruses, physical or electronic break-ins or other unauthorized access to our or our business partners' computer systems
could result in misuse of confidential information and misappropriation of funds of our borrowers and investors, subject us to liabilities,
cause reputational harm and adversely impact our results of operations and financial condition.
In our business, we collect,
store and process certain sensitive data from customers and other business partners. The data that we have processed and stored may make
us the target of, and potentially vulnerable to, cyber-attacks, computer viruses, physical or electronic break-ins or other unauthorized
access. While we have not experienced any material business or reputational harm as a result of such breach in the past, there can be
no assurance that our security measures to protect such confidential information will not be breached in the future. Because techniques
used to sabotage or obtain unauthorized access into 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 or our server hosting service providers' systems could cause confidential
borrower and investor information to be stolen and used for criminal purposes. As personally identifiable and other confidential information
is subject to legislation and regulations in numerous domestic and international jurisdictions, inability to protect confidential information
of our borrowers and investors could result in additional cost and liability for us, damage our reputation, inhibit the use of our platform
and harm our business.
The Administrative Measures
for the Security of the International Network of Computer Information Network, issued in December 1997 and amended in January 2011,
requires us to report any data or security breaches to the local offices of the PRC Ministry of Public Security within 24 hours of any
such breach. The Cyber Security Law of the PRC, issued in June 2017, requires us to take immediate remedial measures when we discover
that our products or services are subject to risks, such as security defects or bugs. Such remedial measures include, informing our customers
of the specific risks and reporting such risks to the relevant competent departments. Cybersecurity and data privacy and security issues
are subject to increasing legislative and regulatory focus in China. The Data Security Law of the People's Republic of China, which
took effect on September 1, 2021, requires that data collection must be conducted in a legitimate and proper manner, and in order to safeguard
data, data processing activities must be conducted to comply with respective graded protection systems for cybersecurity. On August 20,
2021, the NPC promulgated the Personal Information Protection Law (the "PIPL"), which has come into effect on November 1,
2021. The PIPL further emphasizes processors' obligations and responsibilities for personal information protection and sets out
the basic rules for processing personal information and the rules for cross-border transfer of personal information. On January 4, 2022,
the Cyber Administration of China, together with 12 other departments, promulgated the Cybersecurity Review Measures, or the New CAC Measures,
which came into effect on February 15, 2022. According to the New CAC Measures, critical information infrastructure operators purchasing
network products and services and online platform operators carrying out data processing activities that affect or may affect national
security shall conduct a cybersecurity review. Network platform operators holding personal information of more than 1 million users seeking
to be listed abroad must apply for a cybersecurity review as well. On July 30, 2021, the State Council of the PRC promulgated the Regulations
on the Protection of the Security of Critical Information Infrastructure, which took effect on September 1, 2021. The regulations require,
among others, that certain competent authorities shall identify critical information infrastructures. If any critical information infrastructure
is identified, they shall promptly notify the relevant operators and the Ministry of Public Security.
The New CAC Measures do not
apply to the Company or any of its subsidiaries or VIEs as of the date of this annual report. The Company and any of its subsidiaries
or VIEs are not critical information infrastructure operators purchasing network products and services or online platform operators carrying
out data processing activities that affect or may affect national security. We hold less than 1 million users' personal information.
We believe we are not subject to the cybersecurity review under the New CAC Measures. As of the date of this report, we have not been
involved in any investigations on cybersecurity review initiated by the CAC, and we have not received any warning, sanction or penalty
in such respect. We believe that we are compliant with the regulations or policies that have been issued by the CAC as of the date of
this annual report.
Continued expansion of business
operations by the Company, however, could bring the Company within the scope of authority of the CAC rules, and future enacted or amended
CAC rules may increase compliance standards on our business operation, and thus have a substantial impact on our business. There are substantial
uncertainties as to whether and how the CAC's further actions and any amended version of the Cybersecurity Review Measures would
impact U.S. listed companies like us. It is likely that our data processing activities within China are regulated under any future enacted
or amended CAC rules, which may subject us to cybersecurity review if the PRC governmental authorities deem such activities have affected
or may affect national security. If we will be subject to increased scrutiny regarding data security and data protection, our business,
operation, reputation and the price of our securities may be adversely affected. Any unauthorized access, disclosure, misuse or other
loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information,
regulatory penalties, disruption to our operations and the services we provide to customers or damage our reputation, any of which could
adversely affect our results of operations, reputation and competitive position. As there remains significant uncertainty in the interpretation
and enforcement of relevant PRC cybersecurity laws and regulations, we could be subject to cybersecurity review, and if so, there is no
assurance that we would be able to pass such review in a timely manner or at all. In addition, we could become subject to enhanced cybersecurity
review or investigations launched by PRC regulators in the future. Any failure or delay in the completion of the cybersecurity review
procedures or any other non-compliance with the related laws and regulations may result in fines or other penalties, including suspension
of business, website closure, and revocation of prerequisite licenses, as well as reputational damage or legal proceedings or actions
against us, which may result in a material change in our operations, the value of the securities registered or could significantly limit
or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly
decline or be worthless.
19
Any failure to comply with relevant regulations
relating to social insurance and housing provident fund may subject us to penalty and materially and adversely affect our business, financial
condition and results of operations.
In accordance with the PRC
Social Insurance Law and the Regulations on the Administration of Housing Fund and other relevant laws and regulations, China has established
a social insurance system and other employee benefits including basic pension insurance, basic medical insurance, work-related injury
insurance, unemployment insurance, maternity insurance, housing fund, and a handicapped employment security fund, or collectively the
Employee Benefits. An employer shall pay the Employee Benefits for its employees in accordance with the rates provided under relevant
regulations and shall withhold the social insurance and other Employee Benefits that should be assumed by the employees. For example,
an employer that has not made social insurance contributions at a rate and based on an amount prescribed by the law, or at all, may be
ordered to rectify the non-compliance and pay the required contributions within a stipulated deadline and be subject to a late fee of
up to 0.05% or 0.2% per day, as the case may be. If the employer still fails to ratify the failure to make social insurance contributions
within the stipulated deadline, it may be subject to a fine ranging from one to three times of the amount overdue.
Under the Social Insurance
Law and the Regulations on the Administration of Housing Fund, our PRC subsidiaries or VIEs shall register with local social insurance
agencies and register with applicable housing fund management centers and establish a special housing fund account in an entrusted bank.
Our PRC subsidiaries and VIEs and their employees are required to pay the Employee Benefits.
Some of our PRC subsidiaries
are in the process of completing the social insurance registration and the housing fund registration, and we have only made social insurance
payments and housing provident fund contributions for some of our PRC employees, and did not make contributions in full for the social
insurance fund and housing provident fund for our employees as required under the relevant PRC laws and regulations. Although we have
not received any order or notice from the local authorities nor any claims or complaints from our current and former employees regarding
our non-compliance in this regard, we cannot assure you that we will not be subject to any order to rectify non-compliance in the future,
nor can we assure you that there are no, or will not be any, employee complaints regarding social insurance payment or housing provident
fund contributions against us, or that we will not receive any claims in respect of social insurance payment or housing provident fund
contributions under the PRC laws and regulation. In addition, we may incur additional costs to comply with such laws and regulations by
the PRC Government or relevant local authorities. Any such development could materially and adversely affect our business, financial condition
and results of operations.
Non-compliance with labor-related laws and
regulations of the PRC may have an adverse impact on our financial condition and results of operation.
We have been subject to stricter
regulatory requirements in terms of entering into labor contracts with our employees and paying various statutory employee benefits, including
pensions, housing fund, medical insurance, work-related injury insurance, unemployment insurance and childbearing insurance to designated
government agencies for the benefit of our employees. Pursuant to the PRC Labor Contract Law, or the Labor Contract Law, that became effective
in January 2008 and amended in December 2012 and its implementing rules that became effective in September 2008, employers are subject
to stricter requirements in terms of signing labor contracts, minimum wages, paying remuneration, determining the term of employees'
probation and unilaterally terminating labor contracts. In the event that we decide to terminate some of our employees or otherwise change
our employment or labor practices, the Labor Contract Law and its implementation rules may limit our ability to affect those changes in
a desirable or cost-effective manner, which could adversely affect our business and results of operations. We believe our current practice
complies with the Labor Contract Law and its amendments. However, the relevant governmental authorities may take a different view and
impose fines on us in such circumstance.
As the interpretation and
implementation of labor-related laws and regulations are still evolving, we cannot assure you that our employment practice does not and
will not violate labor-related laws and regulations in China, which may subject us to labor disputes or government investigations. If
we are deemed to have violated relevant labor laws and regulations, we could be required to provide additional compensation to our employees
and our business, financial condition and results of operations could be materially and adversely affected.
20
Some of the lease agreements of our leased
properties have not been registered with the relevant PRC government authorities as required by PRC law, which may expose us to potential
fines.
Under PRC law, all lease agreements
are required to be registered with the local land and real estate administration bureau. Although failure to do so does not in itself
invalidate the leases, the lessees may not be able to defend these leases against bona fide third parties and may also be exposed to potential
fines if they fail to ratify such non-compliance within the prescribed time frame after receiving notice from the relevant PRC government
authorities. The penalty ranges from RMB1,000 (approximately $141.50) to RMB10,000 (approximately $1,415.00) for each unregistered lease,
at the discretion of the relevant authority. As of the date of this annual report, the lease agreement for our leased building in China
has not been registered with the relevant PRC government authorities. In the event that any fine is imposed on us for our failure to register
our lease agreements, we may not be able to recover such losses from the lessors.
Our rights to use our leased properties
could be challenged by property owners or other third parties, which may disrupt our operations and incur relocation costs.
As of the date of this annual
report, the lessors of our leased properties in China have not been able to provide us with valid property ownership certificates or authorizations
from the property owners for the lessors to sublease the properties, and we have subleased certain of our leased properties to third parties.
There is a risk that such lessors may not have the relevant property ownership certificates or the right to lease or sublease such properties
to us, in which case the relevant lease agreements and the sublease agreements may be deemed invalid and we may be forced to vacate these
properties. In addition, our usage of the leased properties may be inconsistent with the designated usage, in which case we may not be
able to continue to use the leased properties. The above risks could interrupt our business operations and result in relocation costs.
Moreover, if our lease agreements are challenged by third parties, it could result in diversion of management attention and cause us to
incur costs associated with defending such actions, even if such challenges are ultimately determined in our favor.
Fluctuation in the currency exchange rate
of RMB may have a material adverse effect on our business, operations and financial position.
Our revenue and expenses have
been and are expected to continue to be primarily denominated in RMB and we are exposed to the risks associated with the fluctuation in
the currency exchange rate of RMB. Should RMB appreciate against other currencies, any future financings, which are to be converted from
US dollar or other currencies into RMB, would be reduced and might accordingly hinder our business development due to the lessened amount
of funds raised. On the other hand, in the event of the devaluation of RMB, the dividend payments of our Company, which are to be paid
in US dollars after the conversion of the distributable profit denominated in RMB, would be reduced. Hence, substantial fluctuation in
the currency exchange rate of RMB may have a material adverse effect on our business, operations and financial position and the value
of your investment in the Shares.
We are a holding company and our ability
to pay dividends is primarily dependent upon the earnings of, and distributions by, our subsidiaries and VIEs in the PRC.
We are a holding company incorporated
under the laws of the Cayman Islands with limited liability. No dividends have been paid or declared by our Company. The majority of our
business operations are conducted through our subsidiaries and VIEs in the PRC and hence, our revenue and profit are substantially contributed
by our subsidiaries and VIEs in the PRC.
Our ability to pay dividends
to our shareholders is primarily dependent upon the earnings of our subsidiaries and VIEs in the PRC and their distribution of funds to
us, primarily in the form of dividends. The ability of our subsidiaries in the PRC to make distributions to us depends upon, among others,
their distributable earnings. Under the PRC laws, payment of dividends is only permitted out of accumulated profits according to PRC accounting
standards and regulations, and our subsidiaries and VIEs in the PRC are also required to set aside part of its after-tax profits to fund
certain reserve funds that are not distributable as cash dividends. Other factors such as cash flow conditions, restrictions on distributions
contained in our PRC subsidiaries' and VIEs' articles of associations, restrictions contained in any debt instruments, withholding
tax and other arrangements will also affect the ability of our subsidiaries and VIEs in the PRC to make distributions to us. These restrictions
could reduce the amount of distributions that we receive from our subsidiaries and VIEs in the PRC, which in turn would restrict our ability
to pay dividends on the Shares. The amounts of distributions that any of our subsidiaries or VIEs declared and made in the past are not
indicative of the dividends that we may pay in the future. There is no assurance that we will be able to declare or distribute any dividend
in the future.
21
There are significant uncertainties under
the PRC Enterprise Income Tax Law relating to the withholding tax liabilities of our PRC subsidiaries and VIEs, and dividends payable
by our PRC subsidiaries to our offshore subsidiaries and may not qualified to enjoy certain treaty benefits.
Under the PRC Enterprise Income
Tax Law and its implementation rules, the profits of a foreign-invested enterprise ("FIE") generated through operations, which
are distributed to its immediate holding company outside China, will be subject to a withholding tax rate of 10%. Pursuant to a special
arrangement between Hong Kong and China, such rate may be reduced to 5% if a Hong Kong resident enterprise owns more than 25% of the equity
interest in the PRC company. Our current PRC subsidiaries are wholly-owned by our Hong Kong subsidiaries, YGMZ (Hong Kong) Limited ("MingZhu
HK"), Cheyi (Hong Kong) Limited, Yinhua (HK) Limited and Feipeng Enterprises (HK) Limited. Accordingly, they may qualify for a 5%
tax rate in respect of distributions from its PRC subsidiaries. Under the Notice on Certain Issues with Respect to the Enforcement of
Dividend Provisions in Tax Treaties promulgated in 2009, the tax payer needs to satisfy certain conditions to enjoy the benefits under
a tax treaty. These conditions include: (i) the taxpayer must be the beneficial owner of the relevant dividends, and (ii) the corporate
shareholder to receive dividends from the PRC subsidiaries must have met the direct ownership thresholds during the 12 consecutive months
preceding the receipt of the dividends. Further, in February 2018, the SAT issued the Announcement of the State Administration of Taxation
on Issues Relating to "Beneficial Owner" in Tax Treaties, which sets forth certain detailed factors in determining "beneficial
owner" status.
Entitlement to a lower tax
rate on dividends according to tax treaties or arrangements between the PRC central government and governments of other countries or regions
is subject to the Administrative Measures on Entitlement of Non-resident Taxpayers to Tax Treaty Benefits, which provides that entitlement
to treaty benefits for non-resident taxpayers shall be handled by means of "self-judgment of eligibility, declaration of entitlement,
and retention of relevant materials for future reference." Where non-resident taxpayers judge by themselves that they meet the conditions
for entitlement to treaty benefits, they may obtain such entitlement themselves at the time of making tax declarations, or at the time
of making withholding declarations via withholding agents. At the same time, they shall collect, gather and retain relevant materials
for future reference in accordance with the provisions of these Measures, and shall accept the follow-up administration of tax authorities.
As a result, we cannot assure you that we will be entitled to any preferential withholding tax rate under treaties for dividends received
from our PRC subsidiaries.
PRC regulations relating to offshore investment
activities by PRC residents may limit our PRC subsidiaries' and VIEs' ability to change their registered capital or distribute
profits to us or otherwise expose us or our PRC resident beneficial owners to liability and penalties under PRC laws.
In July 2014, SAFE promulgated
the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents' Offshore Investment and Financing and
Roundtrip Investment Through Special Purpose Vehicles, or SAFE Circular 37. SAFE Circular 37 requires PRC residents (including PRC individuals
and PRC corporate entities as well as foreign individuals that are deemed as PRC residents for foreign exchange administration purpose)
to register with SAFE or its local branches in connection with their direct or indirect investment activities. SAFE Circular 37 further
requires an amendment to the SAFE registrations in the event of any changes with respect to the basic information of the offshore special
purpose vehicle, such as change of a PRC individual shareholder, name and operation term, or any significant changes with respect to the
offshore special purpose vehicle, such as increase or decrease of capital contribution, share transfer or exchange, or mergers or divisions.
SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make
in the future.
If our shareholders who are
PRC residents fail to make the required registration or to update the previously filed registration, our PRC subsidiaries and VIEs may
be prohibited from distributing or transferring their profits or the proceeds from any capital reduction, share transfer or liquidation
to us, and we may also be prohibited from making additional capital contribution into our PRC subsidiaries or transfer funds to VIEs.
In February 2015, SAFE promulgated a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment,
or SAFE Notice 13, effective from June 2015 and partially repealed on December 30, 2019. Under SAFE Notice 13, applications for foreign
exchange registration of inbound foreign direct investments and outbound overseas direct investments, including those required under SAFE
Circular 37, will be filed with qualified banks instead of SAFE. The qualified banks will directly examine the applications and accept
registrations under the supervision of SAFE.
22
Mr. Jinlong Yang, our controlling
shareholder, has completed the initial registrations with the local SAFE branch or qualified banks as required by SAFE Circular 37. However,
we may not be informed of the identifies of all the PRC residents holding direct or indirect interest in our company, and we cannot provide
any assurance that these PRC residents will comply with our request to make or obtain any applicable registrations or continuously comply
with all requirements under SAFE Circular 37 or other related rules. The failure or inability of the relevant shareholders to comply with
the registration procedures set forth in these regulations may subject us to fines and legal sanctions, such as restrictions on our cross-border
investment activities, on the ability of our wholly foreign-owned subsidiaries in China to distribute dividends and the proceeds from
any reduction in capital, share transfer or liquidation to us. Moreover, any failure to comply with the various foreign exchange registration
requirements described above could result in liability under PRC law for circumventing applicable foreign exchange restrictions. Furthermore,
as these foreign exchange regulations are still relatively new and their interpretation and implementation have been constantly evolving,
it is unclear how these regulations, and any future regulation concerning offshore or cross-border transactions, will be interpreted,
amended and implemented by the relevant government authorities. As a result, our business operations and our ability to distribute profits
to you could be materially and adversely affected.
PRC regulation of loans to and direct investment
in PRC entities by offshore holding companies and governmental control of currency conversion may delay us from using funds out of PRC,
to make loans or additional capital contributions to our PRC subsidiaries, which could materially and adversely affect our liquidity and
our ability to fund and expand our business.
Any funds we transfer to our
PRC subsidiaries, either as a shareholder loan or as an increase in registered capital, are subject to approval by or registration with
relevant governmental authorities in China regardless of the amount of the transfer. According to the relevant PRC regulations on FIEs
in China, capital contributions to our PRC subsidiaries are subject to submit the report of changes through the enterprise registration
system and registration with a local bank authorized by SAFE. In addition, (i) any foreign loan procured by our PRC subsidiaries is required
to be registered with SAFE or their respective local branches and (ii) our PRC subsidiaries may not procure loans which exceed the difference
between their respective total project investment amount and registered capital or 2.5 times of their net worth. Furthermore, the foreign
loan is required to be registered with the NPRC. See "4.B. Business Overview – Regulations Relating to Funds Transfer to PRC
Subsidiaries." We may not be able to complete such registrations or obtain necessary approvals on a timely basis with respect to
future capital contributions or foreign loans by us to our PRC subsidiaries. If we fail to complete such registrations or other procedures,
our ability to use funds out of PRC, and to capitalize our PRC operations may be negatively affected, which could adversely affect our
liquidity and our ability to fund and expand our business.
On March 30, 2015, the SAFE
promulgated the Circular 19, which took effect as of June 1, 2015 and partially repealed on December 30, 2019. Circular 19 launched a
nationwide reform of the administration of the settlement of the foreign exchange capitals of FIEs and allows FIEs to settle their foreign
exchange capital at their discretion, but continues to prohibit FIEs from using the Renminbi fund converted from their foreign exchange
capital for expenditure beyond their business scopes, providing entrusted loans or repaying loans between nonfinancial enterprises. The
SAFE issued the Circular on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or
SAFE Circular 16, effective in June 2016. Pursuant to SAFE Circular 16, enterprises registered in China may also convert their foreign
debts from foreign currency to Renminbi on a self-discretionary basis. SAFE Circular 16 provides an integrated standard for conversion
of foreign exchange under capital account items (including but not limited to foreign currency capital and foreign debts) on a self-discretionary
basis which applies to all enterprises registered in China. SAFE Circular 16 reiterates the principle that Renminbi converted from foreign
currency-denominated capital of a company may not be directly or indirectly used for purposes beyond its business scope or prohibited
by PRC laws or regulations, while such converted Renminbi shall not be provided as loans to its non-affiliated entities. As this circular
is relatively new, there remains uncertainty as to its interpretation and application and any other future foreign exchange related rules.
Violations of these Circulars could result in severe monetary or other penalties. SAFE Circular 19 and SAFE Circular 16 may significantly
limit our ability to use Renminbi converted from the funds out of PRC, to invest in or acquire any other PRC companies through our PRC
subsidiaries, which may adversely affect our business, financial condition and results of operations.
23
If we are classified as a PRC resident enterprise
for PRC enterprise income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders.
Under the PRC Enterprise Income
Tax Law and its implementation rules, an enterprise established outside of the PRC with its "
de facto
management body"
within the PRC is considered a "resident enterprise" and will be subject to the enterprise income tax on its global income
at the rate of 25%. The implementation rules define the term "
de facto
management body" as the body that exercises
full and substantial control and overall management over the business, productions, personnel, accounts and properties of an enterprise.
In 2009, the SAT, issued a circular, known as SAT Circular 82, partially abolished on December 29, 2017, which provides certain specific
criteria for determining whether the "
de facto
management body" of a PRC-controlled enterprise that is incorporated
offshore is located in China. Although this circular applies only to offshore enterprises controlled by PRC enterprises or PRC enterprise
groups, not those controlled by PRC individuals or foreigners, the criteria set forth in the circular may reflect the SAT's general
position on how the "
de facto
management body" text should be applied in determining the tax resident status of all
offshore enterprises. According to SAT Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise
group will be regarded as a PRC tax resident by virtue of having its "
de facto
management body" in China, and will
be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (i) the primary location
of the day-to-day operational management is in the PRC; (ii) decisions relating to the enterprise's financial and human resource
matters are made or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise's primary assets, accounting
books and records, company seals, and board and shareholder resolutions are located or maintained in the PRC; and (iv) at least 50% of
voting board members or senior executives habitually reside in the PRC.
We believe that, as a Cayman
Islands exempted company, our company is not a PRC resident enterprise for PRC tax purposes. However, the tax resident status of an enterprise
is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term "
de
facto
management body." If the PRC tax authorities determine that our company is a PRC resident enterprise for enterprise income
tax purposes, we would be subject to PRC enterprise income on our worldwide income at the rate of 25%. Furthermore, we would be required
to withhold a 10% tax from dividends we pay to our shareholders that are non-resident enterprises, including the holders of our ordinary
shares. In addition, non-resident enterprise shareholders may be subject to PRC tax on gains realized on the sale or other disposition
of the ordinary shares, if such income is treated as sourced from within the PRC. Furthermore, if we are deemed a PRC resident enterprise,
dividends paid to our non-PRC individual shareholders and any gain realized on the transfer of the ordinary shares by such shareholders
may be subject to PRC tax at a rate of 20% (which, in the case of dividends, may be withheld at source by us). These rates may be reduced
by an applicable tax treaty, but it is unclear whether non-PRC shareholders of our company would be able to claim the benefits of any
tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise. Any such
tax may reduce the returns on your investment in our securities.
Epidemics, acts of war and other disasters may adversely affect
our operations.
Our business is subject to
general economic and social conditions in the PRC. Natural disasters, epidemics and other acts of God which are beyond human control may
adversely affect the economy, infrastructure and livelihood of the people of the PRC. Many major cities in the PRC are under threat of
flood, earthquake, typhoon, sandstorm or drought. Our business, results of operations and financial condition may be adversely affected
if such natural disasters occur. We may be required to disinfect our affected operational premises, which could adversely affect our operations.
Even if we are not directly affected by the epidemic, it could slow down or disrupt the level of economic activity generally, which could
in turn adversely affect our operating results.
24
In addition, acts of war and
terrorist attacks may cause damage or disruption to our operations, employees, markets or clients, any of which could adversely impact
our turnover, cost of sales, overall results and financial condition or the market price of the Shares. Potential war or terrorist attacks
may also cause uncertainty and cause the business to suffer in ways that we cannot currently predict.
Risks Related to Our Business and Our Industry
Our reliance on major customers and any
loss of our major customers or changes in their demands for our services would likely have a material adverse effect on our business,
results of operations, financial conditions and prospect.
We have historically relied
on a limited number of major customers for a significant portion of our revenues, and we anticipate that such reliance will remain unchanged
in the near future. During the years ended December 31, 2022, 2021 and 2020, sales to our top five customers accounted for approximately
31.4%, 49.4% and 78.2%, respectively.
Our service agreements with
our customers are generally for an average term of one year. While certain service agreements contain options of renewal, there is no
assurance that our major customers will continue their business relationship with us, or the revenue generated from dealings with them
will be maintained or increased in the future. In particular, if there is any claim against us related to the quality of our services
from our major customers, such claim would affect the relationship with our major customers or substantially reduce their demand of our
trucking services.
If we are unable to renew
service agreements with our customers, or there is a reduction or cessation of demands from these customers for whatever reasons and we
are unable to enter into new service agreements of comparable size and on similar terms in substitution, our business, financial conditions
and results of operation may be materially and adversely affected. In addition, any deterioration on our customers' ability to use
our services and/or pay for our services in a timely manner will also have a material adverse effect on our business, results of operations,
financial conditions and prospect.
Although a number of our business
strategies will help mitigate risks resulting from our reliance on major customers, see "4.B. Business Overview – Our Strategies",
"4.B. Business Overview – Customers – Our Relationship with Major Customers" there is no assurance that these
strategies will be implemented successfully or, if implemented, fully mitigate the risks in connection with the loss of one or more major
customers.
None of our service agreements with our
customers are on an exclusive basis.
None of our service agreements
with our customers are on an exclusive basis and our customers can engage other transportation services provider(s) for the provision
of transportation and delivery services in addition to or in lieu of us.
Though we have had stable
business relationships with our major customers, there is no assurance that our major customers will not engage one or more service providers
for the provision of transportation services during the term of our service agreements with them. We cannot assure you that we can generate
the same level of or increased revenue from our major customers as compared to the existing scenario. Any appointment of any additional
transportation services providers by our major customers could therefore have a material adverse impact on our business, financial condition
and operating results.
25
If we are unable to collect our receivables
from our existing customers, our results of operations and cash flows could be adversely affected.
Our business depends on our
ability to successfully obtain payment from our customers of the amounts they owe us for our services. As of December 31, 2022 we had
accounts receivable recorded at $20,073,082, of which $945,761 was allowanced and $nil was past due but not impaired.
We establish an allowance
for doubtful accounts based upon estimates, historical experience and other factors surrounding the credit risk of specific customers.
However, actual losses on customer receivables balance could differ from those that we anticipate and as a result we might need to adjust
our allowance. There is no guarantee that we will accurately assess the creditworthiness of our customers. Macroeconomic conditions, including
related turmoil in the global financial system, could also result in financial difficulties for our customers, including limited access
to the credit markets, insolvency or bankruptcy, and as a result could cause customers to delay payments to us, requesting modifications
to their payment arrangements that could increase our receivables balance or default on the payment obligations to us. As a result, an
extended delay or default in payment relating to a significant account will have a material and adverse effect on the aging schedule and
turnover days of our accounts receivable. If we are unable to collect our receivables from our customers in accordance with the contracts
with our customers, our results of operations and cash flows could be adversely affected.
The agreements governing the loan facilities
MingZhu currently has contain restrictions and limitations that could significantly affect our ability to operate our business, raise
capital, as well as significantly affect our liquidity, and therefore could adversely affect our results of operations.
Under its loan agreements
with existing lenders, Shenzhen Yangang Mingzhu Freight Industry Co., Ltd. (or "MingZhu"), one of our operating subsidiaries
in the PRC, Mingzhu has the obligation to notify its lenders prior to certain corporate actions. Such corporation actions include, among
other events, mergers, equity offerings, transfers of material assets, involvement in a material lawsuit and certain material related
party transactions. In addition, pursuant to its loan agreements, MingZhu cannot provide guarantees to any third party, prioritize repayment
of other loans, pay dividends to its shareholders or consummate a reorganization or share ownership restructuring without prior written
consent of certain lenders.
The foregoing provisions restrict,
among other aspects, MingZhu's ability to:
●
incur or permit to exist any additional indebtedness or liens;
●
guarantee or otherwise become liable with respect to the obligations of another party or entity;
●
acquire any assets or enter into merger or joint venture transactions; and
●
consummate certain related party transactions.
Our ability to comply with
these provisions may be affected by events beyond our control. A failure to comply with any of such provisions will constitute an event
of default under existing loan agreements of MingZhu, upon which the lenders will have the right to take a number of remedial actions
that could adversely affect our liquidity and results of operations. See "– Defaults under our loan agreements could result
in a substantial loss of our assets."
Defaults under our loan agreements could
result in a substantial loss of our assets and adversely affect our financial condition and operating results.
A failure to repay any of
the indebtedness under our loan agreements as they become due or to otherwise comply with the covenants contained therein could result
in an event of default thereunder. In addition, the loan agreements between MingZhu and certain lenders contain a cross-default provision,
pursuant to which a default under any other loan agreement will be deemed an event of default under such agreements. If not cured or waived,
an event of default under our existing loan agreements could enable the lenders to declare all borrowings outstanding on such debt, together
with accrued and unpaid interest and fees, to be due and payable and terminate all commitments to extend further credit. The lenders could
also elect to foreclose on our assets securing such debt. In such an event, we may not be able to refinance or repay our indebtedness,
pay dividends or have sufficient liquidity to meet operating and capital expenditure requirements. Any such acceleration could cause us
to lose a substantial portion of our assets and will substantially adversely affect our financial condition and operating results.
26
Our cash flow position may deteriorate owing
to the difference in timing between receipt of payments from our customers and payments to our suppliers and subcontractors if we are
unable to such timing difference and its impact on our cash flow properly.
For our daily operations,
we outsourced a portion of our transportation services to external transportation companies, and sourced tires and fuel oils from the
third-party suppliers. Our cash flows depend on timely receipt of payments from our customers to meet our payment obligations to our suppliers
and subcontractors. As of December 31, 2022, 2021 and 2020, our trade payables amounted to approximately $10,134,535, $1,344,532 and $1,415,591,
respectively, whereas the respective trade payables accounted for approximately 16.4%, 3.9% and 11.3% of our total current liabilities,
respectively.
Our accounts receivable turnover
days were approximately 145.8, 94.6 and 157.6 days, respectively, during 2022, 2021 and 2020. As a result of the above, our daily operation
has to rely on our internal resources, bank borrowings and loans from shareholders to maintain our cash flow and satisfy the needs of
our daily operations.
If we fail to manage the timing
difference between receipt of customer payments and supplier payments, or if the timing difference is further aggravated, we may have
to resort to reserve further funds from our internal resources and/or obtain banking facilities and/or shareholder loans to meet our payment
obligations, which may not be readily available, or if available on reasonable economic terms and our financial condition may be materially
and adversely affected as a result.
We rely on subcontractors to handle a proportion
of our trucking services. Any delay or failure in their services would adversely affect our operations and financial results.
We subcontract a portion of
our trucking services, specifically delivery orders from customers with irregular delivery schedules, to external transportation companies.
For the years ended December 31, 2022, 2021 and 2020, subcontracting charges incurred by us were approximately 85.0% 48.1% and 61% of
our total transportation costs, respectively. Any significant increase in the service fees charged by our subcontractors may have an adverse
impact on our financial results.
There is no assurance that
we will be able to monitor the performance of our subcontractors as directly and efficiently as with our own staff. If their performance
is below our requisite standards or those of our customers, these sub-standard services may adversely damage our business reputation,
cause our customers to deduct our service fees, negatively affect the relationship with our customers and potentially expose us to litigations
and claims from our customers. Further, we may incur additional costs for sourcing alternative services providers at a price higher than
we originally anticipated. This could adversely affect the profitability of our business.
Notwithstanding the stable
business relationship with our subcontractors, there is no assurance that we would be able to maintain such a relationship with them in
the future. There is also no assurance that we would be able to find alternative subcontractors with the requisite expertise, experience
and capability that can meet our business needs and tight delivery schedules with competitive prices and acceptable terms of service in
a timely manner. In addition, we are not sure that our all customers will allow us to subcontract our business in the future. In such
event, our ability to complete our trucking services on time with effective cost could be impaired, thereby damaging our business reputation
and adversely affecting our operations and financial result.
Difficulty in obtaining material, equipment,
goods and services from our vendors and suppliers could adversely affect our business.
We are dependent upon our
suppliers for certain products and materials, including our tractors and trailers. We manage our over-the-road fleet to a five-year trade
cycle with the current average age-of-fleet of our vehicles at approximately three years. Accordingly, we rely on suppliers of our trucks
and truck components to maintain the age of our fleet. We believe that we have positive relationships with our suppliers and are generally
able to obtain favorable pricing and other terms from such parties. If we fail to maintain these relationships with our suppliers, or
if our suppliers are unable to provide the products and materials we need or undergo financial hardship, we could experience difficulty
in obtaining needed goods and services because of production interruptions, limited material availability or other reasons. Subsequently,
our business and operations could be adversely affected.
27
The trucking service market in the PRC is
highly competitive and fragmented, which subjects us to competitive pressures pertaining to pricing, capacity and service.
Our operating segments compete
with many trucking service carriers, certain railroads, logistics, brokerage, freight forwarding and other transportation companies. The
trucking service market in the PRC is highly competitive and fragmented. Some of our competitors may have greater access to equipment,
a larger fleet, a wider range of services, preferential dedicated customer contracts, greater capital resources or other competitive advantages.
Numerous competitive factors could impair our ability to maintain or improve our profitability. These factors include the following:
●
Many of our competitors periodically reduce their freight rates to gain business, especially during times of reduced growth in the economy. This may make it difficult for us to maintain or increase freight rates, or may require us to reduce our freight rates. Additionally, it may limit our ability to maintain or expand our business.
●
Since some of our customers also operate their own private trucking fleets, they may decide to transport more of their own freight.
●
Many customers periodically solicit bids from multiple carriers for their shipping needs, despite the existence of dedicated contracts, which may depress freight rates or result in a loss of business to our competitors.
●
The continuing trend toward consolidation in the transportation industry may result in more large carriers with greater financial resources and other competitive advantages, with which we may have difficulty competing.
●
Higher fuel prices and higher fuel surcharges to our customers may cause some of our customers to consider freight transportation alternatives, including rail transportation.
●
Advancements in technology may necessitate that we increase investments in order to remain competitive, and our customers may not be willing to accept higher freight rates to cover the cost of these investments.
●
Competition from freight logistics and brokerage companies may negatively impact our customer relationships and freight rates.
●
Smaller carriers may build economies of scale with procurement aggregation providers, which may improve such carriers' abilities to compete with us.
The trucking service market is affected
by economic and business risks that are largely beyond our control.
The trucking service market
is highly cyclical, and our business is dependent on a number of factors that may have a negative impact on our operating results, many
of which are beyond our control. We believe that some of the most significant factors beyond our control that may negatively impact our
operating results are economic changes that affect supply and demand in transportation industry, such as:
●
changes in customers' inventory levels, including shrinking product/package sizes, and in the availability of funding for their working capital;
●
commercial driver shortages;
●
industry compliance with an ongoing regulatory environment;
●
excess truck capacity in comparison with shipping demand; and
●
downturns in customers' business cycles, which may be caused by declines in consumer spending.
28
The
risks associated with these factors are heightened when the Chinese economy is weakened. Some of the principal risks during such times
are as follows:
●
low
    overall freight levels, which may impair our asset utilization;
●
customers with credit
    issues and cash flow problems;
●
changing freight patterns
    resulting from redesigned supply chains, resulting in an imbalance between our capacity and customer demand; and
●
customers bidding out
    freight or selecting competitors that offer lower rates, in an attempt to lower their costs, forcing us to lower our rates or lose
    freight.
Economic
conditions that decrease shipping demand or increase the supply of capacity in the trucking service market can exert downward pressure
on rates and equipment utilization, thereby decreasing asset productivity. Declining freight levels and rates, a prolonged recession
or general economic instability could result in declines in our results of operations, which declines may be material.
We
also are subject to cost increases outside our control that could materially reduce our profitability if we are unable to increase our
rates sufficiently. Such cost increases include, but are not limited to, fuel and energy prices, driver wages, taxes and interest rates,
tolls, license and registration fees, insurance premiums, regulations, revenue equipment and related maintenance costs and healthcare
and other benefits for our associates. We cannot predict whether, or in what form, any such cost increase or event could occur. Any such
cost increase or event could adversely affect our profitability.
In
addition, events outside our control, such as strikes or other work stoppages at our facilities or at customer, port, border or other
shipping locations, weather, actual or threatened armed conflicts or terrorist attacks, efforts to combat terrorism, military action
against a foreign country or group located in a foreign country or heightened security requirements could lead to reduced economic demand,
reduced availability of credit or temporary closing of shipping locations. Such events or enhanced security measures in connection with
such events could impair our operations and result in higher operating costs.
We
are, to a certain extent, dependent on the consumer and retail market in the PRC.
We
mainly provide trucking services to our customers in the transportation industry, some of whom ultimately provide transportation services
to end customers in the consumer and retail market in the PRC. As such, our business performance will, to a certain extent, be affected
by our customers' business performance and the consumer and retail market in the PRC. Although these customers of ours who are
consumer goods delivery services providers may not have contributed substantially to our total revenue in the past two years, if these
customers' sales in the PRC decline, such decline may likely lead to a corresponding decrease in demand for our services. Furthermore,
as we expand our business, we may solicit new customers who are consumer goods delivery services providers or strengthen our relationships
with this type of existing customers, which may lead to stronger reliance on these customers. Any adverse developments in our customers'
business performance could therefore materially and adversely affect our business, financial condition and results of operations.
We
may not be able to implement all or any of our business plans successfully.
As
part of our business strategies, we plan to expand our own fleet of delivery vehicles and labor force, expand our sales and marketing
network and establish an information technology system which can facilitate our preparation of delivery routes and schedules and enable
tracking and monitoring of the status of delivery by our self-owned trucking vehicles and subcontractors. Such future plan is developed
based on a number of assumptions, forecasts and commitment of our management. We may not succeed in executing our business strategies
due to a number of reasons, including the following:
●
we may fail to acquire
    delivery vehicles at our expected prices or recruit a sufficient number of skilled drivers and employees to align with our expansion;
●
we may not have sufficient financial resources available;
●
we may fail to adapt ourselves to the information technology
    system;
●
we may fail to expand our sales and marketing network;
●
we may fail to meet our customers' demands for
    our trucking services; and
●
we may fail to reach the targets we expect from our
    expansion and business strategies.
If
we fail to successfully implement our business strategies, we may not be able to maintain our growth rate and our business, financial
condition and results of operations may be materially and adversely affected.
29
Expanding
our self-owned vehicle fleet may result in a significant increase in our depreciation expenses.
We
intend to expand the scale of our own vehicle fleet in order to accommodate potential new business opportunities. Such expansion of our
self-owned vehicle fleet may result in a significant increase in our depreciation expenses, which may in turn materially and adversely
affect our business, financial condition and results of operations.
Our
operation is exposed to disruptions due to bad weather, possible occurrences of natural disasters, epidemics and other diseases and uncertainties,
traffic congestions and public civil movements
.
As
we provide trucking services, any significant disruption in traffic due to severe traffic congestions, weather conditions or disturbances
such as public civil movements, flash floods, or breakdown in major road infrastructure may lead to a reduction in and/or delay of our
services. Such service interruptions may adversely affect our service quality in meeting our customers' key performance indicators
("KPIs") requirements and negatively affect our relationship with our customers. Further, we may have to engage additional
delivery vehicles from other transportation companies to maintain our service operations. The occurrence of any of the foregoing events
may adversely affect our business, financial condition and results of operations.
Our
business operations have been and may continue to be materially and adversely affected by the outbreak of the coronavirus disease (COVID-19).
An
outbreak of respiratory illness caused by a novel coronavirus (COVID-19) was first emerged in China in late 2019 and continues to expand
within the PRC and globally. On January 30, 2020, the WHO declared the outbreak of COVID-19 a public health emergency of international
concern. On March 11, 2020, the WHO declared the outbreak of COVID-19 a pandemic, expanding its assessment of the threat beyond the global
health emergency it had announced in January. As of the date of this annual report, the virus had spread globally. With an aim to contain
the COVID-19 pandemic, the PRC government had imposed extreme measures across the PRC during the first half of 2020 including complete
or partial lockdown measures across various cities in the PRC, the extended shutdown of business operations, and the mandatory quarantine
requirements on infected individuals and anyone deemed potentially infected.
The
COVID-19 pandemic, which has resulted in a high number of fatalities worldwide, has an adverse impact on the livelihood of the people
in and the economy of the PRC. The trucking services and transportation industry in the PRC have been and may continue to be adversely
impacted. The economy slowdown and/or negative business sentiment have a negative impact on the transportation industry and our business
operations and financial condition have been and may continue to be adversely affected.
The
impacts of COVID-19 on our business, financial condition, and results of operations include, but are not limited to, the following:
●
Extended Collection Time and Increase
    in Bad Debts
. Our customers may require additional time to pay us or fail to pay us which may require us to record additional
    allowances. In order to faithful reflect the performance and condition of the Company, we had temporally revised our policy of allowance
    for doubtful accounts with additional allowances recorded. We are currently working with our customers for payments and have not
    experienced significant collection issues as of the date of this annual report. We will monitor our collection closely through 2023.
●
Shortage of Drivers
. Due to the travel
    restrictions imposed by the local governments, some of our drivers have not been able to get back on road for work. However, the
    impact of such shortage of drivers is not significant to the Company because the customer orders have dropped due the COVID-19 pandemic
    and we pay our drivers on a per-drive basis for fulfilled customer orders only.
With
daily life in China gradually returning to normal since April 2022, our business related to logistics industry has gone back to normal
as well. However some new cases found in Xinjiang region caused heavy lockdown starting from June 2022. Our revenue generated from Xinjiang
was substantially reduced during June. To the date of this filing, our revenue is still negatively affected by temporarily lockdown across
the nation. We cannot foresee whether the COVID-19 pandemic will be effectively contained, nor can we predict the severity and duration
of its impact. If the COVID-19 pandemic is not effectively and timely controlled, our business operations and financial condition may
be adversely affected as a result of the deteriorating market outlook, the slowdown in regional and national economic growth, weakened
liquidity and financial condition of our customers or other factors that we cannot foresee.
We
may experience labor shortage or unrest.
Our
services involve a substantial amount of labor force. While we have not experienced any significant labor shortage, we may face such
problem in the future. We may be required to increase the wages for our workers as a result of changes in the labor market conditions
or industry practices.
30
We
expect that the wage levels of our employees will continue to be determined in accordance with the prevailing market rates in the relevant
regions in the PRC as well as the performance of the relevant employees in the foreseeable future. There is no assurance that we will
not face labor unrest or we do not have to adjust the wages upward for our employees demanding higher wages from us. Labor unrest will
disrupt our services and the higher wages will result in increased services costs for us. Should we fail to increase our service prices
to offset the additional labor costs in a timely manner or fail to manage labor shortage or labor unrest, our business, operation and
financial performance could be adversely affected.
Our
customers could become our competitors.
Many
of our customers are logistic companies which have the capability and financial resources to diversity and own their own vehicle fleet.
These customers may also continue to evaluate whether to own their vehicle fleet or engage other transportation companies to provide
the logistics services. In the event that our customers own their vehicle fleet, such customers could reduce or eliminate their need
of our trucking services, which would subsequently result in a reduction of our revenue and would adversely affect our business and results
of operations.
We
may not be familiar with new regions or markets we enter and may not be successful in offering new products and services or maintain
our current growth.
The
growth of our company was based on the services we currently provided to existing markets. We may expand our business and enter other
regional markets in the future. However, we may be unable to replicate our initial success in new markets. In expanding our business,
we may enter markets in which we have limited, or no, experience. We may not be familiar with the local business and regulatory environment
and we may fail to attract a sufficient number of customers due to our limited presence in that region. In addition, competitive conditions
in new markets may be different from those in our existing markets and may make it difficult or impossible for us to generate high income
in these new markets. If we are unable to manage these and other difficulties in our expansion into other regions in China, our prospects
and results of operations may be adversely affected.
Our
results of operations may fluctuate significantly and may not fully reflect the underlying performance of our business.
Our
results of operations, including our operating revenue, expenses and other key metrics, may vary significantly in the future and period-to-period
comparisons of our operating results may not be meaningful. Accordingly, the results for any one quarter are not necessarily an indication
of future performance. Our financial results may fluctuate due to a variety of factors, some of which are outside of our control and,
as a result, may not fully reflect the underlying performance of our business. Fluctuation in our operational results may adversely affect
the price of our ordinary shares. Factors that may cause fluctuations in our quarterly results include:
●
our ability to attract new customers, maintain
    relationships with existing customers, and expand into new territories in China;
●
the amount and timing of operating expenses
    related to acquiring customers and the maintenance and expansion of our business, operations and infrastructure;
●
general economic, industry and market conditions
    in China;
●
our emphasis on customer experience instead
    of near-term growth; and
●
the timing of expenses related to the development
    or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired technologies or
    businesses.
If
we fail to promote and maintain our brand in an effective and cost-efficient way, our business and results of operations may be harmed.
We
believe that developing and maintaining awareness of our brand effectively is critical to attracting new and retaining existing customers.
Our efforts to build our brand have caused us to incur significant expenses, and it is likely that our future marketing efforts will
require us to incur significant additional expenses. These efforts may not result in increased revenues in the immediate future or at
all and, even if they do, any increases in revenues may not offset the expenses incurred. If we fail to promote and maintain our brand,
while incurring substantial expenses, our results of operations and financial condition would be adversely affected, which may impair
our ability to grow our business.
If
labor costs in the PRC increase substantially, our business and costs of operations may be adversely affected.
In
recent years, the Chinese economy has experienced inflation and labor cost increases. Average wages are projected to continue to increase.
Further, under PRC law we are required to pay various statutory employee benefits, including pensions, housing funds, medical insurance,
work-related injury insurance, unemployment insurance and maternity insurance to designated government agencies for the benefit of our
employees. The relevant government agencies may examine whether an employer has made adequate payments to the statutory employee benefits,
and those employers who fail to make adequate payments may be subject to late payment fees, fines and/or other penalties. We expect that
our labor costs, including wages and employee benefits, will continue to increase. If we are unable to control our labor costs or pass
such increased labor costs on to our customers by increasing the price of our products and services, our financial condition and results
of operations may be adversely affected.
31
Competition
for our employees is intense, and we may not be able to attract and retain the highly skilled employees needed to support our business.
As
we continue to experience growth, we believe our success depends on the efforts and talents of our employees, including experienced drivers,
financial personnel and marketing professionals. Our future success depends on our continued ability to attract, develop, motivate and
retain highly qualified and skilled employees. Competition for highly skilled 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. Many of the companies
with which we compete for experienced employees have greater resources than we have and may be able to offer more attractive terms of
employment.
In
addition, we invest significant time and expense in training our employees, which increases their value to competitors who may seek to
recruit them. If we fail to retain our employees, we could incur significant expenses in hiring and training their replacements, and
the quality of our services and our ability to serve customers could diminish, resulting in a material adverse effect on our business.
Our
business depends on the continued efforts of our senior management, particularly Mr. Jinlong Yang. If Mr. Yang, or one or more other
of our key executives, were unable or unwilling to continue in their present positions, our business may be severely disrupted.
Our
business operations depend on the continuing services of our senior management, particularly Mr. Jinlong Yang, our Chairman and Chief
Executive Officer, and our other executive officers named in this annual report. While we have provided different incentives to our management,
we cannot assure you that we can continue to retain their services. If one or more of our key executives were unable or unwilling to
continue in their present positions, we may not be able to replace them easily or at all, our future growth may be constrained, our business
may be severely disrupted and our financial condition and results of operations may be materially and adversely affected, and we may
incur additional expenses to recruit, train and retain qualified personnel. In addition, although we have entered into confidentiality
and non-competition agreements with our key executives of our subsidiaries and VIEs in China, there is no assurance that any member of
our management team will not join our competitors or form a competing business. If any dispute arises between us and our current or former
officers, we may have to incur substantial costs and expenses in order to enforce such agreements in China or we may be unable to enforce
them at all.
Our
executive officers have limited prior experience in operating a U.S. public company, and their inability to operate the public company
aspects of our business could harm us.
Our
executive officers have limited experience in operating a U.S. public company, which makes our ability to comply with applicable laws,
rules and regulations uncertain. Our failure to comply with all laws, rules and regulations applicable to U.S. public companies could
subject us or our management to regulatory scrutiny or sanction, which could harm our reputation and share price.
From
time to time we may evaluate and potentially consummate acquisitions or alliances, which could require significant management attention,
disrupt our business, adversely affect our financial results, be unsuccessful or fail to achieve the desired result.
We
plan to evaluate and consider strategic transactions, combinations, acquisitions or alliances to enhance our existing business or develop
new products and services. These transactions could be material to our financial condition and results of operations if consummated.
If we are able to identify an appropriate business opportunity, we may not be able to successfully consummate the transaction and, even
if we do consummate the transaction, we may be unable to obtain the benefits or avoid the difficulties and risks of such a transaction.
Any
acquisition or alliance will involve risks commonly encountered in business relationships, including:
●
difficulties in assimilating and integrating
    the operations, personnel, systems, data, technologies, products and services of the acquired business;
●
inability of the acquired technologies,
    products or businesses to achieve expected levels of revenue, profitability, productivity or other benefits;
●
difficulties in retaining, training, motivating
    and integrating key personnel;
●
diversion of management's time and
    resources from our normal daily operations;
●
difficulties in successfully incorporating
    licensed or acquired technology and rights into our products;
●
difficulties in retaining relationships
    with customers, employees and suppliers of the acquired business;
●
regulatory risks; and
●
liability for activities of the acquired
    business before the acquisition, including patent, copyright and trademark infringement claims, violations of laws, commercial disputes,
    tax liabilities and other known and unknown liabilities.
32
Any
future acquisitions or alliances may not be successful. Furthermore, we may not benefit from our business strategy, nor generate sufficient
revenue to offset the associated costs or may otherwise not result in the intended benefits. In addition, we cannot assure you that any
future acquisition of, or alliance with respect to, new businesses or technology will lead to the successful development of new or enhanced
services or that any new or enhanced services, if developed, will achieve market acceptance or prove to be profitable.
We
may need additional capital, and financing may not be available on terms acceptable to us, or at all.
Although
our current cash and cash equivalents, anticipated cash flows from operating activities will be sufficient to meet our anticipated working
capital requirements and capital expenditures in the ordinary course of business, there is a risk that we may need additional cash resources
in the future to fund our growth plans or if we experience adverse changes in business conditions or other developments. We may also
need additional cash resources in the future if we find and wish to pursue opportunities for new investments, acquisitions, capital expenditures
or similar actions. If we determine that our cash requirements exceed the amount of cash and cash equivalents we have on hand at the
time, we may seek to issue equity or debt securities or obtain credit facilities. We cannot assure you that financing will be available
in amounts or on terms acceptable to us, if at all. The issuance and sale of additional equity would result in further dilution to our
shareholders.
●
default and foreclosure on our assets if
    our operating revenue is insufficient to repay debt obligations;
●
acceleration of obligations to repay the
    indebtedness (or other outstanding indebtedness), even if we make all principal and interest payments when due, if we breach any
    covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
●
our inability to obtain necessary additional
    financing if the debt security contains covenants restricting our ability to obtain such financing while the debt security is outstanding;
●
diverting a substantial portion of cash
    flow to pay principal and interest on such debt, which would reduce the funds available for expenses, capital expenditures, acquisitions
    and other general corporate purposes; and
●
creating potential limitations on our flexibility
    in planning for and reacting to changes in our business and in the industry in which we operate.
The
occurrence of any of these risks could adversely affect our operations or financial condition.
We
will be subject to changing laws, rules and regulations in the U.S. regarding regulatory matters, corporate governance and public disclosure
that will increase both our costs and the risks associated with non-compliance.
Following
this annual report, we will be subject to rules and regulations by various governing bodies and self-regulatory organizations, including,
for example, the SEC and The Nasdaq Stock Market, which are charged with the protection of investors and the oversight of companies whose
securities are publicly traded, and to new and evolving regulatory measures under applicable law. Our efforts to comply with new and
changing laws and regulations have resulted in and are likely to continue to result in increased general and administrative expenses
and a diversion of management time and attention from revenue-generating activities to compliance activities.
Moreover,
because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time
as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs
necessitated by ongoing revisions to our disclosure and governance practices. If we fail to address and comply with these regulations
and any subsequent changes, we may be subject to penalty and our business may be harmed.
Our
business is subject to risks related to lawsuits and other claims brought by our clients or business partners. If the outcomes of these
proceedings are adverse to us, it could have a material adverse effect on our business, results of operations and financial condition.
We
are subject to lawsuits and other claims in the ordinary course of our business. We are currently not involved in any lawsuits with any
of our customers. However, claims arising out of actual or alleged violations of law could be asserted against us by individuals, companies,
governmental or other entities in civil, administrative or criminal investigations and proceedings. These claims could be asserted under
a variety of laws and regulations, including but not limited to contract laws, consumer protection laws or regulations, intellectual
property laws, environmental laws, and labor and employment laws. These actions could expose us to adverse publicity and to monetary
damages, fines and penalties, as well as suspension or revocation of licenses or permits to conduct business. Even if we eventually prevail
in these matters, we could incur significant legal fees or suffer reputational harm, which could have a material adverse effect on our
business and results of operations as well as our future growth and prospects.
33
We
are subject to extensive environmental laws and regulations, and the costs related to compliance with, or our failure to comply with,
existing or future laws and regulations, could adversely affect the business and results of operations.
Our
operations are subject to national and local laws and regulations relating to the protection of the environment. Sanctions for noncompliance
may include revocation of permits, corrective action orders, significant administrative or civil penalties and criminal prosecution.
In recent years, the PRC government has strengthened the regulations of environmental protection by enacting new laws and modifying existing
laws. Our business involves environmental management and issues typically associated with fuel consumption. We have not received any
non-compliance notice or warning from the government regarding environmental violations. However, the PRC government may pass new legislation
or amend current laws and regulations and set higher requirements and standards for vehicle operations. Our cost of complying with environmental
laws and regulations may increase and we may assign more personnel for environmental compliance. As a result, our financial conditions
and results of operation may be materially and adversely affected.
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.
In
accordance with the relevant laws and regulations in jurisdictions in which we operate, we are required to maintain various approvals,
licenses and permits to operate our business, including but not limited to business license, road transport business license. These approvals,
licenses and permits are obtained upon satisfactory compliance with, among other things, the applicable laws and regulations.
We
were engaged in the business of air freight as an international freight forwarding agency and had entered into master agreements with
the subcontractors. Due to the COVID-19 pandemic, this particular business has been suspended and no significant revenue was recorded
since the beginning of 2020. We have not obtained the relevant certificate for this type of business, or completed filings with the competent
governmental agencies. All of our subcontractors are qualified to conduct relevant business activities. According to the Detailed Rules
for Implementing the Regulations of the People's Republic of China on the Administration of the International Freight Forwarding
Industry, entities engaging in international freight forwarding operations which are in violation of the provisions of the Regulations
of the People's Republic of China on the Administration of the International Freight Forwarding Industry and the present Detailed
Rules are subject to bans against any illegal operational activities imposed by governmental agencies that are in charge of the trade
sector. The agencies for industry and commerce shall impose penalties on such entities in accordance with the provisions of the relevant
laws and administrative regulations, and the agencies in charge of the trade sector shall announce the ban thereof. The relevant local
agencies of commerce shall file a record for archival purposes with the MOFCOM after making the announcement. Such entities are prohibited
from applying for handling international freight forwarding operations independently or jointly with other applicants for five years.
Meanwhile, Implementing Regulations of the Customs of the People's Republic of China on Administrative Penalties, which was promulgated
in 2004 by the State Council, further provides that in case anyone undertakes customs declaration business without going through customs
registration or fails to obtain the customs declaration practicing qualification, it shall be banned from conducting the business activities,
the illegal gains shall be confiscated, and a fine of less than RMB 100,000 (approximately $14,544) may be imposed. Although we have
suspended conducting this type of business for now, we face the risk of violating the foregoing PRC regulations. We may also face the
risk of breaching the agreements we have entered into with our customers or subcontractors for air freight services and be banned from
conducting this type of business and subject to punishments or confiscation of the gains derived from related business. As of the date
of this annual report, we have not received any order or penalty from any governmental authorities but we cannot assure you that we will
not be subject to any order or penalties for the lack of relevant qualifications before we complete necessary registration and filing
requirements.
As
of the date of this annual report, we have obtained the business license and road transport business license, but there can be no assurance
that we will be able to obtain, renew and/or convert all of the approvals, licenses and permits required for our existing business operations
upon their expiration in a timely manner or duly complete necessary registration or filings in the relevant governmental authorities
for any of our new business, which could adversely affect our business operations.
34
Our
business may be materially and adversely affected if our Chinese subsidiaries or VIEs declare bankruptcy or become subject to a dissolution
or liquidation proceedings.
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 PRC subsidiaries and
VIEs hold the bulk of the assets that are important to our business operations. If any of our PRC subsidiaries or VIEs gets involved
in 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 or adversely affect our business, financial condition and
results of operations.
Any
failure to protect our own intellectual property rights could impair our brand, negatively impact our business or both.
We
currently own 6 PRC patents related to technologies used in connection with trucking services, including 1 invention patent and 5 utility
patents. We also own one PRC trademark and 17 PRC copyright registrations, including 1 art-work copyright and 16 software copyrights.
Our intellectual property rights are key to our operations and business prospects.
Our
success and ability to compete also depend in part on protecting our own intellectual property. We rely on a combination of patents,
copyrights, trade secrets, trademarks and other rights, as well as confidentiality procedures and contractual provisions to protect our
proprietary technology, processes and other intellectual property. However, the steps we take to protect our intellectual property rights
may be inadequate. We have only filed patent applications in China and we have not acquired any related international patent rights by
filing pursuant to the Patent Cooperation Treaty. Our patents are under no protections outside of China.
Third
parties may seek to challenge, invalidate or circumvent our patents, copyrights, trade secrets, trademarks and other rights or applications
for any of the foregoing. In order to protect our intellectual property rights, we may be required to spend significant resources. Litigation
brought to protect and enforce our intellectual property rights could be costly, time-consuming and distracting to management. Our failure
to secure, protect and enforce our intellectual property rights could adversely affect our brand and impact our business.
We
may be sued by third parties for alleged infringement of their proprietary rights, which could harm our business.
Our
competitors, as well as other entities and individuals, may own or claim to own intellectual property relating to our industry. From
time to time, a third-party provider may claim that we are infringing on their intellectual property rights. We may, however, be unaware
of the intellectual property rights that others may claim over some or all of our applications, technology or services. Any claims or
litigation could cause us to incur significant expenses and, if successfully asserted against us, could require that we pay substantial
damages or ongoing royalty payments, restrict us from conducting our business or require that we comply with other unfavorable terms.
We may also be obligated to indemnify parties or pay substantial settlement costs, including royalty payments, in connection with any
such claim or litigation and to obtain licenses, modify applications or refund fees, which could be costly. Even if we were to prevail
in such a dispute, any litigation regarding our intellectual property could be costly and time-consuming and divert the attention of
our management from our business operations.
35
We
have identified material weaknesses in our internal accounting controls, and if we fail to implement and maintain an effective system
of internal controls or fail to remediate the material weaknesses in our internal control over financial reporting that have been identified,
we may be unable to accurately report our results of operations or prevent fraud or fail to meet our reporting obligations, and customer
confidence and the market price of our ordinary shares may be materially and adversely affected.
We
are subject to the reporting requirements of the Exchange Act of 1934, or Exchange Act, the Sarbanes-Oxley Act of and the rules and regulations
of the Nasdaq Stock Market. We are not required to provide a report of management's assessment on our internal control over financial
reporting in this annual report due to a transition period established by the rules of the SEC for newly public companies. In addition,
we are not required to include an attestation report on internal control over financial reporting issued by our independent registered
public accounting firm in this annual report, since we are an emerging growth company as defined under the JOBS Act. However, in the
course of auditing our consolidated financial statements included in this annual report, we and our independent registered public accounting
firm identified one material weakness in our internal control over financial reporting. As defined in standards established by the Public
Company Accounting Oversight Board ("PCAOB"), a "material weakness" is a deficiency, or a combination of deficiencies,
in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual
or interim financial statements will not be prevented or detected on a timely basis. The material weakness identified relates to our
lack of sufficient skilled staff with U.S. GAAP knowledge and the SEC reporting knowledge for the purpose of financial reporting as well
as the lack in formal accounting policies and procedures manual to ensure proper financial reporting in accordance with U.S. GAAP and
SEC reporting requirements.
We
have already taken some steps and have continued to implement measures to remediate the material weakness identified, including but not
limited to (i) streamline our accounting department structure and enhance our staff's U.S. GAAP expertise on a continuous basis;
(2) hire a new reporting manager who has sufficient expertise in U.S. GAAP to improve the quality of U.S. GAAP reports; (3) make an overall
assessment on the current finance and accounting resources and have plans to hire new finance team members with U.S. GAAP qualification
in order to strengthen our U.S. GAAP reporting framework; (4) participate in trainings and seminars provided by professional services
firms on a regular basis to gain knowledge on regular accounting/SEC reporting updates; and (5) provide internal training to our current
accounting team on US GAAP knowledge. We are also in the process of completing a systematic accounting manual for US GAAP and financial
closing process. However, we cannot assure you that we will not identify additional material weaknesses or significant deficiencies in
the future. In addition, if we are unable to meet the requirements of Section 404 of the Sarbanes-Oxley Act, our common shares may not
be able to remain listed on the NASDAQ Capital Market.
Section
404 of the Sarbanes-Oxley Act of 2002 requires that we include a report of management on our internal control over financial reporting
in our annual report on Form 20-F beginning with our annual report for the fiscal year ending December 31, 2020. In addition, once we
cease to be an "emerging growth company" as such term is defined under the JOBS Act, our independent registered public accounting
firm must attest to and report on the effectiveness of our internal control over financial reporting. Our management may conclude that
our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control
over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing,
may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented,
designed, operated or reviewed, or if it interprets the relevant requirements differently from us. In addition, as we are a public company,
our reporting obligations may place a significant strain on our management, operational and financial resources and systems for the foreseeable
future. We may be unable to timely complete our evaluation testing and any required remediation.
During
the course of documenting and testing our internal control procedures, in order to satisfy the requirements of Section 404 of the Sarbanes-
Oxley Act of 2002, we may identify other weaknesses and deficiencies in our internal control over financial reporting. In addition, if
we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended
from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting.
If we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial
statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial
information. This could in turn limit our access to capital markets, harm our results of operations and lead to a decline in the trading
price of our shares. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or
misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations
and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.
36
Certain
data and information in this annual report were obtained from third-party sources and were not independently verified by us.
We
have engaged Frost & Sullivan to prepare a commissioned industry report that analyzes the PRC transportation industry, which we refer
to as the "Frost& Sullivan Report". Information and data relating to the PRC transportation industry have been derived
from Frost & Sullivan Report. Statistical data included in the Frost & Sullivan Report also include projections based on a number
of assumptions. The transportation industry may not grow at the rate projected by market data, or at all. Any failure of the PRC transportation
industry to grow at the projected rate may have a material adverse effect on our business and the market price of our ordinary shares.
Furthermore, if any one or more of the assumptions underlying the market data is later found to be incorrect, actual results may differ
from the projections based on these assumptions.
We
have not independently verified the data and information contained in the Frost & Sullivan Report or any third-party publications
and reports Frost & Sullivan has relied on in preparing its report. Data and information contained in such third-party publications
and reports may be collected using third-party methodologies, which may differ from the data collection methods used by us. In addition,
these industry publications and reports generally indicate that the information contained therein is believed to be reliable, but do
not guarantee the accuracy and completeness of such information.
Insurance
and claims expenses could significantly reduce our earnings.
Although
we maintain auto insurance for our vehicles, our future insurance and claims expenses might exceed historical levels, which could reduce
our earnings. We maintain a high deductible for a portion of our claims exposure resulting from auto liability. Estimating the number
and severity of claims, as well as related judgment or settlement amounts is inherently difficult. This, along with legal expenses, incurred
but not reported claims and other uncertainties can cause unfavorable differences between actual claim costs and our reserve estimates.
We reserve for anticipated losses and expenses and periodically evaluate and adjust our claims reserves to reflect our experience. However,
ultimate results may differ from our estimates, which could result in losses over our reserved amounts.
We
maintain insurance with licensed insurance carriers above the amounts which we retain. Although we believe our aggregate auto insurance
limits should be sufficient to cover reasonably expected claims, it is possible that the amount of one or more claims could exceed our
aggregate coverage limits. If any claim were to exceed our coverage, we would bear the excess, in addition to our other retained amounts.
Insurance carriers have raised premiums for many businesses, including transportation companies. As a result, our insurance and claims
expense could increase, or we could raise our deductible when our policies are renewed or replaced. Our operating results and financial
condition could be materially and adversely affected if (i) cost per claim, premiums, or the number of claims significantly exceeds our
estimates, (ii) we experience a claim in excess of our coverage limits, (iii) our insurance carriers fail to pay on our insurance claims
or (iv) we experience a claim for which coverage is not provided.
37
Any
failure to pay the full amount of taxes may subject us to penalty and materially and adversely affect our business, financial condition
and results of operation.
In
accordance with the Law of the PRC on the Administration of Tax Collection and its Implementation Regulations, where a taxpayer or a
withholding agent fails to pay or underpays the amount of tax that should be paid or remitted within the specified time, the tax authorities
shall order the taxpayer or withholding agent to pay or remit the tax within the specified time limit, and impose a penalty for late
payment on a daily basis at the rate of 0.05% of the amount of tax in arrears from the date the tax payment is defaulted. If the taxpayer
or withholding agent still fails to do so on the expiration of the time limit, the tax authorities may recover such unpaid taxes by adopting
compulsory enforcement measures, and impose a fine of not less than 50 percent but not more than five times the amount of tax the taxpayer
or withholding agent fails to pay or underpays or fails to remit. Furthermore, the taxation authorities shall also announce the tax payments
defaulted by taxpayers regularly. See "10.E. Taxation" – Tax Collection and Payment."
Affected
by polity factors such as credit tightening, some of our accounts receivable that met the collection conditions have not been recovered
on time, which has an adverse impact on our liquidity. As of December 31, 2022, the Company and its VIEs and subsidiaries owed taxes
in the amount of $5,278,436.
As
of the date of this annual report, we have not received any order or notice from the local tax authorities to set a specific time limit
for us to pay the outstanding taxes referenced above, or impose any penalty for the late tax payment, but we cannot assure you that we
will not be subject to any order to pay the taxes within a specific time limit. Despite our efforts to minimize the impact of this matter
on us, there are uncertainties whether we will have enough funds to make the tax payment within the time limit set by the tax authorities.
If we fail to do so, the tax authorities may recover such unpaid taxes and late payment fees by adopting compulsory enforcement measures
such as withholding the taxes from our bank account, or sealing up, auctioning or disposing of our properties. In addition, the tax authorities
may even impose a fine on us as prescribed by the laws. If any of the above were to occur, our business, operations and financial position
would be materially and adversely affected.
We
do not have any business insurance coverage.
Insurance
companies in China currently do not offer an extensive array of insurance products as insurance companies in more developed economies
do. Currently, we do not have any business liability or disruption insurance, except auto insurances, to cover our operations. We have
determined that the costs of insuring for these risks and the difficulties associated with acquiring such insurance on commercially reasonable
terms make it impractical for us to have such insurance. Any uninsured business disruptions may result in our incurring substantial costs
and the diversion of resources, which could have an adverse effect on our results of operations and financial condition.
We
may have exposure to greater than anticipated tax liabilities.
We
are subject to enterprise income tax, value-added tax, and other taxes in each province and city in China where we have operations. Our
tax structure is subject to review by various local tax authorities. The determination of our provision for income tax and other tax
liabilities requires significant judgment. In the ordinary course of our business, there are many transactions and calculations where
the ultimate tax determination is uncertain. Although we believe our estimates are reasonable, the ultimate decisions by the relevant
tax authorities may differ from the amounts recorded in our financial statements and may materially affect our financial results in the
period or periods for which such determination is made.
38
Risks
Related to Our Securities
We
may not maintain our listing on Nasdaq which could limit investors' ability to make transactions in our securities and subject
us to additional trading restrictions.
Our
ordinary shares are listed on Nasdaq. We cannot assure you that our ordinary shares will continue to be listed on Nasdaq in the future.
In order to continue listing our securities on Nasdaq, we must maintain certain financial, distribution and share price levels. Generally,
we must (i) maintain a minimum amount in shareholders' equity (generally above $2,500,000), maintain a minimum market value of
listed securities (generally above $35,000,000) or have a minimum net income from operations for the prior year of for two of the preceding
years (generally above $500,000); and (ii) a minimum number of publicly held shares (generally greater than 500,000) and a minimum number
of public shareholders (generally greater than 300 shareholders). Our ordinary shares also cannot have a bid price of less than $1.00.
Moreover, we must comply with certain listing standards regarding the independence of our board of directors and members of our audit
committee. We intend to fully comply with these requirements, but we may not continue to be able to meet these requirements in the future.
If
Nasdaq delists our securities from trading on its exchange and we are not able to list our securities on another national securities
exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material
adverse consequences, including:
●
a limited availability of market quotations
    for our securities;
●
reduced liquidity for our securities;
●
a determination that our ordinary shares
    is a "penny stock" which will require brokers trading in our ordinary shares to adhere to more stringent rules and possibly
    result in a reduced level of trading activity in the secondary trading market for our securities;
●
a limited amount of news and analyst coverage;
    and
●
a decreased ability to issue additional
    securities or obtain additional financing in the future.
The
National Securities Markets Improvement Act of 1996, which is a U.S. federal statute, prevents or preempts the states from regulating
the sale of certain securities, which are referred to as "covered securities." Because we expect that our ordinary shares
will be listed on Nasdaq, such securities will be covered securities. Although the states are preempted from regulating the sale of our
securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding
of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. Further, if we were
no longer listed on Nasdaq, our securities would not be covered securities and we would be subject to regulations in each state in which
we offer our securities.
39
The
trading price of our ordinary shares may be volatile, which could result in substantial losses to investors.
The
trading price of our securities may be volatile and could fluctuate widely due to factors beyond our control. This may happen because
of the broad market and industry factors, like the performance and fluctuation of the market prices of other companies with business
operations located mainly in China that have listed their securities in the United States. A number of Chinese companies have listed
or are in the process of listing their securities on U.S. stock markets. The securities of some of these companies have experienced significant
volatility, including price declines in connection with their initial public offerings. The trading performances of these Chinese companies'
securities after their offerings may affect the attitudes of investors toward Chinese companies listed in the United States in general
and consequently may impact the trading performance of our ordinary shares, regardless of our actual operating performance.
In
addition to market and industry factors, the price and trading volume for our ordinary shares may be highly volatile for factors specific
to our own operations, including the following:
●
variations in our revenues, earnings, cash
    flow and data related to our user base or user engagement;
●
announcements of new investments, acquisitions,
    strategic partnerships or joint ventures by us or our competitors;
●
announcements of new product and service
    offerings, solutions and expansions by us or our competitors;
●
changes in financial estimates by securities
    analysts;
●
detrimental adverse publicity about us or
    our industry;
●
additions or departures of key personnel;
●
release of lock-up or other transfer restrictions
    on our outstanding equity securities or sales of additional equity securities; and
●
potential litigation or regulatory investigations.
Any
of these factors may result in large and sudden changes in the volume and price at which our ordinary shares will trade.
In
the past, shareholders of public companies have often brought securities class action suits against those companies following periods
of instability in the market price of their securities. If we were involved in a class action suit, it could divert a significant amount
of our management's attention and other resources from our business and operations and require us to incur significant expenses
to defend the suit, which could harm our results of operations. Any such class action suit, whether or not successful, could harm our
reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be
required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.
40
If
securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations
regarding our ordinary shares, the market price for our ordinary shares and trading volume could decline.
The
trading market for our ordinary shares will be influenced by research or reports that industry or securities analysts publish about our
business. If one or more analysts who cover us downgrade our ordinary shares, the market price for our ordinary shares would likely decline.
If one or more of these analysts cease to cover us or fail to regularly publish reports on us, we could lose visibility in the financial
markets, which in turn could cause the market price or trading volume for our ordinary shares to decline.
Techniques
employed by short sellers may drive down the market price of the ordinary shares.
Short
selling is the practice of selling securities that the seller does not own but rather has borrowed from a third party with the intention
of buying identical securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value
of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects
to pay less in that purchase than it received in the sale. As it is in the short seller's interest for the price of the security
to decline, many short sellers publish, or arrange for the publication of, negative opinions and allegations regarding the relevant issuer
and its business prospects in order to create negative market momentum and generate profits for themselves after selling a security short.
These short attacks have, in the past, led to selling of shares in the market. If we were to become the subject of any unfavorable allegations,
whether such allegations are proven to be true or untrue, we could have to expend a significant amount of resources to investigate such
allegations and/or defend ourselves. While we would strongly defend against any such short seller attacks, we may be constrained in the
manner in which we can proceed against the relevant short seller by principles of freedom of speech, applicable state law or issues of
commercial confidentiality.
Because
we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of our ordinary shares for a return
on your investment.
We
currently intend to retain all of our available funds and any future earnings to fund the development and growth of our business. As
a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our
ordinary shares as a source for any future dividend income.
Our
board of directors has complete discretion as to whether to distribute dividends, subject to certain requirements of Cayman Islands law.
In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our
board of directors. Under Cayman Islands law, a Cayman Islands company may pay a dividend out of either profit or share premium account,
provided that in no circumstances may a dividend be paid if this would result in the company being unable to pay its debts as they fall
due in the ordinary course of business. Even if our board of directors decides to declare and pay dividends, the timing, amount and form
of future dividends, if any, will depend on, among other things, our future results of operations and cash flow, our capital requirements
and surplus, the amount of distributions, if any, received by us from our subsidiaries and VIEs, our financial condition, contractual
restrictions and other factors deemed relevant by our board of directors. Accordingly, the return on your investment in our securities
will likely depend entirely upon any future price appreciation of our ordinary shares. There is no guarantee that our ordinary shares
will appreciate in value or even maintain the price at which you purchased our ordinary shares. You may not realize a return on your
investment in our ordinary shares and you may even lose your entire investment.
If
we are classified as a passive foreign investment company, United States taxpayers who own our securities may have adverse United States
federal income tax consequences.
A
non-U.S. corporation such as ourselves will be classified as a passive foreign investment company, which is known as a PFIC, for any
taxable year if, for such year, either
●
At least 75% of our gross income for the
    year is passive income; or
●
The average percentage of our assets (determined
    at the end of each quarter) during the taxable year which produces passive income or which are held for the production of passive
    income is at least 50%.
41
Passive
income generally includes dividends, interest, rents, royalties (other than rents or royalties derived from the active conduct of a trade
or business) and gains from the disposition of passive assets.
If
we are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. taxpayer who
holds our securities, the U.S. taxpayer may be subject to increased U.S. federal income tax liability and may be subject to additional
reporting requirements.
With
any assets held for the production of passive income, it is possible that, for our current taxable year or for any subsequent year, more
than 50% of our assets may be assets which produce passive income. We will make this determination following the end of any particular
tax year. Although the law in this regard is unclear, we treat our consolidated affiliated entities as being owned by us for United States
federal income tax purposes, not only because we exercise effective control over the operation of such entities but also because we are
entitled to substantially all of their economic benefits, and, as a result, we consolidate their operating results in our consolidated
financial statements. For purposes of the PFIC analysis, in general, a non-U.S. corporation is deemed to own its pro rata share of the
gross income and assets of any entity in which it is considered to own at least 25% of the equity by value.
For
a more detailed discussion of the application of the PFIC rules to us and the consequences to U.S. taxpayers if we were determined to
be a PFIC, see "10.E. Taxation" — Passive Foreign Investment Company."
The
amended and restated memorandum and articles of association contain anti-takeover provisions that could have a material adverse effect
on the rights of holders of our securities.
Our
amended and restated memorandum and articles of association contain provisions which may discourage, delay or prevent a change-of-control
of our company or management that shareholders may consider favorable, including provisions that authorize our board of directors, without
further action by our shareholders, to issue preferred shares in one or more series and to fix their designations, powers, preferences,
privileges, and other rights, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences,
any or all of which may be greater than the rights associated with our ordinary shares. Preferred shares could be issued quickly with
terms calculated to delay or prevent a change in control of our company or make removal of management more difficult. If our board of
directors decides to issue preferred shares, the price of our ordinary shares may fall and the voting and other rights of the holders
of our ordinary shares underlying the ordinary shares may be materially and adversely affected.
Our
principal shareholders have substantial influence over our company. Their interests may not be aligned with the interests of our other
shareholders, and they could prevent or cause a change of control or other transactions.
As
of the date of this annual report, Mr. Jinlong Yang, our founder and chairman of our board of directors, beneficially owns an aggregate
of 23.5% of our outstanding ordinary shares.
Accordingly,
our executive officers and directors, together with our existing shareholders, could have significant influence in determining the outcome
of any corporate transaction or other matter submitted to the shareholders for approval, including mergers, consolidations, the election
of directors and other significant corporate actions. In cases where their interests are aligned and they vote together, these shareholders
will also have the power to prevent or cause a change in control. Without the consent of some or all of these shareholders, we may be
prevented from entering into transactions that could be beneficial to us or our minority shareholders. In addition, our directors and
officers could violate their fiduciary duties by diverting business opportunities from us to themselves or others. The interests of our
largest shareholders may differ from the interests of our other shareholders. The concentration in the ownership of our ordinary shares
may cause a material decline in the value of our ordinary shares. For more information regarding our principal shareholders and their
affiliated entities, see "7.A. Major Shareholders."
42
As
a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance
matters that differ significantly from Nasdaq corporate governance listing standards. These practices may afford less protection to shareholders
than they would enjoy if we complied fully with Nasdaq corporate governance listing standards.
As
an exempted company incorporated in the Cayman Islands that is listed on Nasdaq, we are subject to Nasdaq corporate governance listing
standards. However, Nasdaq rules permit a foreign private issuer like us to follow the corporate governance practices of its home country.
Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from Nasdaq corporate
governance listing standards. Currently, we do not plan to rely on the home country practice with respect to our corporate governance.
However, if we choose to follow home country practice in the future, our shareholders may be afforded less protection than they otherwise
would enjoy under Nasdaq corporate governance listing standards applicable to U.S. domestic issuers.
You
may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because
we are incorporated under Cayman Islands law.
We
are an exempted company incorporated under the laws of the Cayman Islands with limited liability. Our corporate affairs are governed
by our amended and restated memorandum and articles of association, the Companies Act (Revised) of the Cayman Islands and the common
law of the Cayman Islands. The rights of shareholders to take action against our directors and us, actions by minority shareholders and
the fiduciary duties of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands.
The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as
from the English common law, which are generally of persuasive authority, but are not binding, on a court in the Cayman Islands. The
rights of our shareholders and the fiduciary duties of our directors under Cayman Islands law are not as clearly established as they
would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different
body of securities laws than the United States, and provide significantly less protection to investors. In addition, Cayman Islands companies
may not have the standing to initiate a shareholder derivative action in a federal court of the United States. There is no statutory
recognition in the Cayman Islands of judgments obtained in the United States, although the courts of the Cayman Islands will in certain
circumstances, recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits.
Shareholders
of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records (other than
the memorandum and articles of association) or to obtain copies of lists of shareholders of these companies. Our directors have discretion
under our second amended and restated memorandum and articles of association we expect to adopt, to determine whether or not, and under
what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders.
This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder resolution
or to solicit proxies from other shareholders in connection with a proxy contest.
Certain
corporate governance practices in the Cayman Islands, which is our home country, differ significantly from requirements for companies
incorporated in other jurisdictions such as the U.S. Currently, we do not plan to rely on home country practice with respect to any corporate
governance matter. However, if we choose to follow our home country practice in the future, our shareholders may be afforded less protection
than they otherwise would under rules and regulations applicable to U.S. domestic issuers.
As
a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken
by our management, members of the board of directors or controlling shareholders than they would as public shareholders of a company
incorporated in the United States. For a discussion of significant differences between the provisions of the Companies Act and the laws
applicable to companies incorporated in the United States and their shareholders, see "10.B. Memorandum and Articles of Association
— Material Differences between U.S. Corporate Law and British Virgin Islands Corporate Law."
43
Certain
judgments obtained against us by our shareholders may not be enforceable.
We
are a Cayman Islands exempted company and substantially all of our assets are located outside of the United States. All of our current
operations are conducted in China. In addition, all of our current directors and officers are nationals and residents of countries other
than the United States. Substantially all of the assets of these persons are located outside the United States. As a result, it may be
difficult for a shareholder to effect service of process within the United States upon these persons or to enforce against us or them
judgments obtained in the United States courts, including judgments predicated upon the civil liability provisions of the securities
laws of the United States or any state in the United States. Even if you are successful in bringing an action of this kind, the laws
of the Cayman Islands and of China may render you unable to enforce a judgment against our assets or the assets of our directors and
officers. For more information regarding the relevant laws of the Cayman Islands and China. As a result of all of the above, our shareholders
may have more difficulties in protecting their interests through actions against us or our officers, directors, or major shareholders
than would shareholders of a corporation incorporated in a jurisdiction in the United States.
We
are an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements.
We
are an "emerging growth company," as defined in the JOBS Act, and we may take advantage of certain exemptions from various
requirements applicable to other public companies that are not emerging growth companies including, most significantly, not being required
to comply with the auditor attestation requirements of Section 404 of Sarbanes-Oxley Act of 2002 for so long as we are an emerging growth
company. As a result, if we elect not to comply with such auditor attestation requirements, our investors may not have access to certain
information they may deem important.
The
JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards
until such date that a private company is otherwise required to comply with such new or revised accounting standards. In other words,
an "emerging growth company" can delay the adoption of certain accounting standards until those standards would otherwise
apply to private companies. We have elected to take advantage of the extended transition period, although we have early adopted certain
new and revised accounting standards based on transition guidance permitted under such standards. As a result of this election, our future
financial statements may not be comparable to other public companies that comply with the public company effective dates for these new
or revised accounting standards.
We
are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions
applicable to United States domestic public companies.
Because
we are a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations
in the United States that are applicable to U.S. domestic issuers, including:
●
the rules under the Exchange Act requiring
    the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with the SEC;
●
the sections of the Exchange Act regulating
    the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act;
●
the sections of the Exchange Act requiring
    insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades
    made in a short period of time; and
●
the selective disclosure rules by issuers
    of material non-public information under Regulation FD.
We
are required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish
our results on a quarterly basis through press releases, distributed pursuant to the rules and regulations of the Nasdaq. Press releases
relating to financial results and material events will also be furnished to the SEC on Form 6-K. However, the information we are required
to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S.
domestic issuers. As a result, you may not be afforded the same protections or information, which would be made available to you, were
you investing in a U.S. domestic issuer.
44
We
may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.
As
discussed above, we are a foreign private issuer, and therefore, we are not required to comply with all of the periodic disclosure and
current reporting requirements of the Exchange Act. The determination of foreign private issuer status is made annually on the last business
day of an issuer's most recently completed second fiscal quarter, and, accordingly, the next determination will be made with respect
to us on June 30, 2021. In the future, we would lose our foreign private issuer status if (1) more than 50% of our outstanding voting
securities are owned by U.S. residents and (2) a majority of our directors or executive officers are U.S. citizens or residents, or we
fail to meet additional requirements necessary to avoid loss of foreign private issuer status. If we lose our foreign private issuer
status, we will be required to file with the SEC periodic reports and registration statements on U.S. domestic issuer forms, which are
more detailed and extensive than the forms available to a foreign private issuer. We will also have to mandatorily comply with U.S. federal
proxy requirements, and our officers, directors and principal shareholders will become subject to the short-swing profit disclosure and
recovery provisions of Section 16 of the Exchange Act. In addition, we will lose our ability to rely upon exemptions from certain corporate
governance requirements under the listing rules of the Nasdaq. As a U.S. listed public company that is not a foreign private issuer,
we will incur significant additional legal, accounting and other expenses that we will not incur as a foreign private issuer.
As
a foreign private issuer, we are permitted to, and we have elected to, rely on exemptions from certain Nasdaq corporate governance standards
applicable to U.S. issuers. This may afford less protection to holders of our ordinary shares.
As
a Cayman Islands company listed on the Nasdaq Global Select Market, we are subject to the Nasdaq corporate governance listing standards.
For example, Rule 5605 of the Nasdaq Stock Market Rules requires listed companies to have, among other things, a majority of its board
members to be independent, and to obtain shareholder approval for certain issuances of securities. However, Nasdaq rules permit a foreign
private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in the
Cayman Islands, which is our home country, may differ significantly from the Nasdaq corporate governance listing standards. For example,
under Cayman Islands law we are not required to have a majority of our board consist of independent directors or obtain shareholder approval
for certain issuances of our securities. With respect to the foregoing corporate governance requirement, we have elected to follow home
country practice. See "Item 16G. Corporate Governance." We may also elect to rely on home country practice to be exempted
from other corporate governance requirements. As a result, our shareholders may be afforded less protection than they otherwise would
enjoy under the Nasdaq corporate governance listing standards applicable to U.S. domestic issuers.
We
will incur significantly increased costs and devote substantial management time as a result of the listing of our ordinary shares.
We
will incur additional legal, accounting and other expenses as a public reporting company, particularly after we cease to qualify as an
emerging growth company. For example, we will be required to comply with the additional requirements of the rules and regulations of
the SEC and the Nasdaq rules, including applicable corporate governance practices. We expect that compliance with these requirements
will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. In addition, we
expect that our management and other personnel will need to divert attention from operational and other business matters to devote substantial
time to these public company requirements. We cannot predict or estimate the number of additional costs we may incur as a result of becoming
a public company or the timing of such costs.
In
addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for
public companies, increasing legal and financial compliance costs and making some activities more time-consuming. These laws, regulations
and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application
in practice may evolve over time as new guidelines are provided by regulatory and governing bodies. This could result in continuing uncertainty
regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to
invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative
expenses and a diversion of management's time and attention from revenue-generating activities to compliance activities. If our
efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due
to ambiguities related to their application and practice, regulatory authorities may also initiate legal proceedings against us and our
business may be adversely affected.
45
ITEM 4.
INFORMATION ON THE COMPANY
4.A.
History and Development of the Company
We
were incorporated under the laws of the Cayman Islands. Our registered office is located at 27F, Yantian Modern Industry Service Center,
No. 3018 Shayan Road, Yantian District, Shenzhen, Guangdong, China 518081. The telephone number of the registered office is +86 (755)
2520-9839. Our World Wide Web address is www.szygmz.com. Information contained on our website does not constitute a part of this annual
report.
Our
agent for service of process in the United States is Puglisi & Associates, 850 Library Avenue, Suite 204, Newark, DE 1971. The telephone
number for our service agent is: (302) 738-6680
The
Company was incorporated on January 2, 2018 as an exempted company structured as a holding company incorporated under the laws of Cayman
Islands. Immediately prior to our initial public offering, we were owned by three entities and one individual: (i) Alpha Global (BVI)
Limited, a company formed under the laws of the British Virgin Islands and wholly-owned by Jinlong Yang, our Chairman and Chief Executive
Officer; (ii) Excelsior Investment Limited (Hong Kong), a company formed under the laws of Hong Kong and wholly-owned by Gui Ling Guo,
a director and the Vice Chair of the board of directors of MingZhu and (iii) Exquisite Elite Limited (BVI), a company formed under the
laws of the British Virgin Islands, with 86% of its equity interest owned by Zhuo Wang, our director. We began our operations in China
in 2002 and currently conduct our business through our subsidiaries and VIEs.
Our
main subsidiaries as of the date of this annual report are as follows:
Name
Background
Ownership
MingZhu
    Investment Limited ("MingZhu BVI")
●
●
●
A British
    Virgin Islands company
Incorporated
    on January 15, 2018
A holding
    company
100% directly owned by MingZhu
    Cayman
YGMZ (Hong Kong) Limited
    ("MingZhu HK")
●
●
●
A Hong
    Kong company
Incorporated
    on February 2, 2018
A holding
    company
100% directly owned by MingZhu BVI
Shenzhen Yangang Mingzhu
    Freight Industry Co., Ltd. ("MingZhu" or "Mingzhu")
●
●
●
A PRC
    limited liability company
Incorporated
    on July 10, 2002
Providing
    trucking services
100% directly owned by MingZhu HK
Shenzhen Yangang Mingzhu
    Supply Chain Management Co., Ltd. ("MingZhu Management")
●
●
●
A PRC
    limited liability company
Incorporated
    on September 5, 2018
Transportation
    and supply chain management services
100% directly owned by MingZhu HK
Shenzhen Pengcheng Shengshi
    Logistics Co., Ltd. ("MingZhu Pengcheng")
●
●
●
A PRC
    limited liability company
Incorporated
    on April 7, 2010
Providing
    trucking services
100% directly owned by MingZhu
Cheyi (BVI) Limited ("Cheyi
    BVI")
●
●
●
A British
    Virgin Islands company
Incorporated
    on September 29, 2021
A holding
    company
100% directly owned by MingZhu Cayman
Cheyi (Hong Kong) Limited
    ("Cheyi HK")
●
●
●
A Hong
    Kong company
Incorporated
    on October 22, 2021
A holding
    company
100% directly owned by Cheyi BVI
Ningbo Cheyi Corporate
    Information Consulting Co., Ltd. ("Ningbo Cheyi" or Cheyi WFOE)
●
●
●
A PRC
    limited liability company
Incorporated
    on November 2, 2021
A holding
    company
100% directly owned by Cheyi HK
Zhejiang Cheyi Network
    Technology Co., Ltd. ("Cheyi Network")
●
●
●
A PRC
    limited liability company
Incorporated
    on December 10, 2015
An integrated
    online car-hailing and driver management services company
100% owned by Ningbo Cheyi via contractual arrangements
46
Name
Background
Ownership
Yinhua (BVI) Limited ("Yinhua")
●
●
●
A British
    Virgin Islands company
Incorporated
    on November 12, 2021
A holding
    company
100% directly owned by MingZhu Cayman
Yinhua (HK) Limited ("Yinhua
    HK")
●
●
●
A Hong Kong company
        Incorporated on December 1, 2021
A holding company
100% directly owned by Yinhua
Zhejiang Caiyunlian Technology
    Co. Ltd. ("Yinhua WFOE")
●
●
●
A PRC
    limited liability company
Incorporated
    on January 7, 2021
A holding
    company
100% directly owned by Yinhua HK
Hainan Zhisheng Automobile
    Services Co., Ltd. ("Zhisheng")
●
●
●
A PRC
    limited liability company
Incorporated
    on September 13, 2018
A comprehensive
    auto related service platform to serve auto insurance companies
100% owned by Yinhua WFOE via contractual arrangements
Feipeng Global Limited
    ("Feipeng BVI")
●
●
●
A British
    Virgin Islands company
Incorporated
    on March 17, 2022
A holding
    company
100% directly owned by MingZhu Cayman
Feipeng Enterprises (HK)
    Limited ("Feipeng HK")
●
●
●
A Hong Kong company
Incorporated on April 27, 2022
A holding
    company
100% directly owned by Feipeng BVI
Shenzhen Feipeng Zongheng
    Supply Chain Management Co., Ltd. ("Feipeng WFOE")
●
●
●
A PRC
    limited liability company
Incorporated
    on September 13, 2022
A holding
    company
100% directly owned by Feipeng HK
Xinjiang Feipeng Logistics
    Co., Ltd. ("Feipeng")
●
●
●
A PRC
    limited liability company
Incorporated
    on July 3, 2014
A regional
    trucking services provider
100% owned by Feipeng WFOE via contractual arrangements
A
reorganization of our legal structure was completed in April 2018. On April 13, 2018, the former shareholders transferred their 100%
ownership interest in MingZhu to MingZhu HK, which is 100% owned by the Company through MingZhu BVI. In consideration of such transfer,
the Company issued 1,000 ordinary shares to the former shareholders of MingZhu. After the reorganization, the Company owns 100% of the
equity interests of MingZhu BVI, MingZhu HK and MingZhu. The controlling shareholder of the Company is same as that of MingZhu prior
to the reorganization.
47
On
October 21, 2020, we completed our firm commitment initial public offering ("IPO") of 3,000,000 ordinary shares at a public
offering price of US$4.00 per share, for total gross proceeds of US$12 million, before deducting underwriting discounts, commissions
and other related expenses. Our ordinary shares began trading on The Nasdaq Capital Market on October 21, 2020 under the symbol "YGMZ".
On
October 30, 2020, the underwriter and sole book-runner of our underwritten IPO, exercised the partial over-allotment option and purchased
an additional 350,000 ordinary shares of the Company at the IPO price of US$4.00 per share.
On
December 4, 2020, the underwriter and sole book-runner of our underwritten IPO, further exercised the partial over-allotment option and
purchased an additional 4,040 ordinary shares of the Company at the IPO price of US$4.00 per share.
On
March 12, 2021, the Company closed its direct public offering of 3,333,335 Units, with each Unit consisting of (i) one ordinary share
of the Company, par value $0.001 per share, and (ii) one warrant to purchase 0.75 ordinary share. The Company sold the Units at a price
of $6.00 per Unit. The Company received gross proceeds from the Offering, before deducting estimated offering expenses payable by the
Company, of approximately $18,000,000.
On
April 21, 2021, the underwriter and sole book-runner of our underwritten IPO, exercised its partial warrant and purchased a total of
214,286 ordinary shares of the Company with no cash in consideration.
On
June 14, 2021, the underwriter and sole book-runner of our underwritten IPO, exercised its partial warrant and purchased a total of 43,616
ordinary shares of the Company with no cash in consideration.
On
December 29, 2021, we entered into a Share Purchase Agreement with Cheyi BVI which operates its business through its VIE, Cheyi Network,
an integrated online car-hailing and driver management services company, and each of shareholders of Cheyi BVI.
Pursuant
to the agreement, the total consideration for the acquisition of 100% equity ownership of Cheyi BVI is an aggregate of $23,470,712, consisting
of the issuance by the Company to the shareholders of Cheyi BVI an aggregate of 3,189,000 Company's ordinary shares (representing
$6,760,680 with $2.12 per ordinary share) and payment of $2,000,000 at closing, and Year-2021 earnout payment of $8,826,019 and Year-2022
earnout payment of $5,884,013 if Cheyi BVI's audited net income for its fiscal year 2021 and 2022 is no less than U.S. $3,000,000
respectively. The two earnout payments are due 13 months upon the delivery of Cheyi BVI's audited financial statements.
Cheyi
Network was established in December 2015 as a comprehensive automobile service platform, providing a full range of services to the automotive
industry. Cheyi Network has built an integrated business platform with more than 6,000 vehicles and drivers for ride hailing services
under management. Its vehicles and drivers provide services to major mobility technology platforms, such as SAIC Mobility and T3 Mobility. The
acquisition is expected to offer our customers additional platform enhancements, and directly fits with our acquisition strategy, which
includes adding financially accretive, best-of-breed companies and products.
On
December 31, 2021, the parties completed the transaction. Upon the closing of the transaction, we acquired 100% shares outstanding of
the Cheyi BVI, and we issued 3,189,000 ordinary shares and paid $2,000,000 to the sellers.
On
March 14, 2022, we entered into a Share Purchase Agreement with Yinhua which develops and operates a comprehensive auto related service
platform to serve auto insurance companies, and each of the shareholders of the Yinhua.
Under
terms of the share purchase agreement, we shall pay $10,076,600 in exchange for 100% equity of Yinhua. Of the total consideration to
be paid, $7,078,100 shall be paid in form of 3,826,000 newly issued ordinary shares of the Company, representing $1.85 per ordinary share
of the Company, and $1,000,000 upon closing. In addition, a cash earnout of $1,998,500 shall be paid if Yinhua achieves a net income
target threshold of $1.3 million during the calendar year of 2022.
Founded
in 2018, Yinhua provides diversified, differentiated and customized value-added auto related services to auto insurance companies, where
the services include road security services, car maintenance services, car inspection services and other services. Yinhua develops and
operates a comprehensive auto related service platform for auto insurance companies combining intelligent human-vehicle interaction functions
with car owner programs.
On
March 18, 2022, the parties completed the transaction. Upon the closing of the transaction, we acquired 100% shares outstanding of the
Yinhua, and we issued 3,826,000 ordinary shares and paid $1,000,000 to the sellers.
Recent
Developments
On
December 21, 2022, we entered into a Share Purchase Agreement with Feipeng BVI which provides regional trucking services, and each of
the shareholders of the Feipeng BVI, pursuant to which, among other things and subject to the terms and conditions contained therein,
we acquired 100% of Feipeng BVI for approximately $14,540,436, of which US $9,550,000 will be paid in cash upon closing in form of cash.
Feipeng BVI shall receive a certain number of shares valued at $4,990,436 if it achieves a targeted net income of US$2.4 million during
the calendar year 2023.
The
Company has 22,960,277 ordinary shares outstanding as of the date of this annual report.
48
Throughout
this report we refer to MingZhu Logistics Holdings Limited as "we," "us," "our," or "the Company".
The 11 subsidiaries of the Company are identified in "4.A. History and Development of the Company" in this report. We refer
to Cheyi Network Technology Co., Ltd., Hainan Zhisheng Car Services Co., Ltd and Xinjiang Feipeng Logistics Co., Ltd. as our "VIEs"
in this report. The investors have purchased securities in the Company. Our subsidiaries and/or the VIEs conduct operations in China.
The VIEs are consolidated for accounting purposes but are not the entities in which the investors own equity, and the Company does not
conduct operations.
Risks
Related to VIE structure and Doing Business in China
We
are not a Chinese operating company but a Cayman Islands holding company with operations conducted in China through (i) our PRC subsidiaries
and (ii) the VIEs and their subsidiaries with which we have maintained contractual arrangements.
Current
PRC laws and regulations impose certain restrictions or prohibitions on foreign ownership of companies that engage in value-added telecommunication
services, or VATS, and certain other businesses. Pursuant to the FITE Regulations promulgated by the State Council, foreign investors
are not allowed to hold more than 50% of the equity interests of any company providing VATS. In addition, foreign-invested telecommunication
enterprises should meet the requirements as prescribed in the relevant regulations. We have to conduct our VATS business through the
VIEs.
The
VIE structure is used to provide investors with exposure to foreign investment in China-based companies where Chinese law prohibits or
limits direct foreign investment in the operating companies. Investors of our ordinary shares or the ADSs thus are not purchasing equity
interest in the VIEs and their subsidiaries in China but instead are purchasing equity interest in a Cayman Islands holding company.
Such VIE arrangement is not identical to owning such entities directly, and investors will own shares in a holding company with contracts
with the VIEs and will not have any equity ownership of such VIEs themselves. The VIE arrangement may not be as effective as direct ownership
in providing us with control over the VIEs. Direct ownership would allow us, for example, to directly or indirectly exercise our rights
as a shareholder to effect changes in the boards of directors of the VIEs, which, in turn, could affect changes, subject to any applicable
fiduciary obligations at the management level. However, under the VIE arrangement, as a legal matter, if the VIEs or its shareholders
fail to perform their respective obligations under the VIE arrangement, we may have to incur substantial costs and expend significant
resources to enforce those arrangements and resort to litigation or arbitration and rely on legal remedies under PRC laws. These remedies
may include seeking specific performance or injunctive relief and claiming damages, any of which may not be effective. In the event we
are unable to enforce these VIE Agreements or we experience significant delays or other obstacles in the process of enforcing the VIE
arrangement, we may not be able to exert effective control over the VIEs and may lose control over the assets owned by the VIEs.
All
the agreements under our contractual arrangements with the VIEs and their equity owners are governed by PRC law and provide
for the resolution of disputes through arbitration in China. As of the date hereof, the agreements governed by PRC law that serve as
the basis for a VIE arrangement have not been tested in a PRC court of law. As a result, uncertainties in the PRC legal system could
limit our ability to enforce these contractual arrangements. Further, we face uncertainty about potential future actions by the PRC government
that could affect the validity and enforceability of the contractual arrangements with the VIEs. If the PRC government deems that our
contractual arrangements with the VIEs do not comply with PRC regulatory restrictions on foreign investment in the relevant industries,
or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or
be forced to relinquish our interests in those operations. If the PRC regulatory authorities disallow VIE structure, it would likely
result in a material change in your operations and/or a material change in the value of the registered securities, including that it
could cause the value of such securities to significantly decline or become worthless.
In
addition, there is uncertainty as to whether the courts of the Cayman Islands or the PRC would recognize or enforce judgments of U.S.
courts against us or such persons predicated upon the civil liability provisions of the securities laws of the United States or any state.
Accordingly, it is uncertain whether we would be able to enforce the VIE arrangement in a court of law in China, either in an action
directly in China or in seeking to enforce a foreign judgment in China. The costs of seeking to enforce such VIE arrangement could be
substantial, and the outcome of such litigation might not result in us enforcing such VIE arrangement. If such VIE arrangement were not
enforced, investors could see the value of their Shares decrease in value or become worthless.
For
more information regarding the risks associated with the VIE structure, see "Risk Factors-Risks Related to Our Corporate Structure".
In
addition, there are legal and operational risks associated with being based in or having the majority of the Company's operations
in China, including by not limited to:
(1)
The PRC government has significant authority
    to regulate or intervene in the China operations of an offshore holding company, such as us, at any time. Therefore, investors in
    our ordinary shares and our business face potential uncertainty from the PRC government's policy.
(2)
Substantial uncertainties and restrictions
    with respect to the political and economic policies of the PRC government and PRC laws and regulations could have a significant impact
    upon the business the Company may be able to conduct in the PRC and accordingly on the results of its operations and financial condition.
49
(3)
The failure to comply with PRC regulations
    relating to mergers and acquisitions of domestic enterprises by offshore special purpose vehicles may subject the Company to severe
    fines or penalties and create other regulatory uncertainties regarding the Company's corporate structure. Further, the Anti-Monopoly
    Law which became effective in August 2008 and was amended on June 24, 2022, established additional procedures and requirements that
    could make merger and acquisition activities by foreign investors more time-consuming and complex. Under the Anti-Monopoly Law, companies
    undertaking acquisitions relating to businesses in China must notify the State Council's anti-monopoly law enforcement authority,
    in advance of any transaction where the parties' revenue in the China market exceed certain thresholds and the buyer would
    obtain control of, or decisive influence over, the target. Our ability to expand our business or maintain or expand our market share
    through future acquisitions would as such be materially and adversely affected.
(4)
The HFCAA, recent regulatory actions taken
    by the SEC and PCAOB, and proposed rule changes submitted by U.S. stock exchanges calling for additional and more stringent criteria
    to be applied to China-based public companies could add uncertainties to our capital raising activities and compliance costs. The
    HFCAA requires a foreign company to certify it is not owned or controlled by a foreign government if the PCAOB is unable to audit
    specified reports because the company uses a foreign auditor not subject to PCAOB inspection. If the PCAOB is unable to inspect the
    company's auditors for three consecutive years, the issuer's securities are prohibited to trade on a national exchange.
    Furthermore, on June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act,  which was
    enacted on December 29, 2022 under the Consolidated Appropriations Act, 2023, and amended the HFCAA to decrease
    the number of non-inspection years under the HFCAA from three years to two, thus reducing the time period before an issuer's
    securities may be prohibited from trading on any U.S. securities exchange or any U.S. over-the-counter market or delisted. On December
    20, 2021, the PCAOB issued a report on its determinations that the PCAOB is unable to inspect or investigate completely PCAOB-registered
    public accounting firms headquartered in mainland China or Hong Kong because of positions taken by PRC authorities in those jurisdictions.
    Our independent registered public accounting firm that issued the audit report for our financial statements for 2022, as an auditor
    of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United
    States pursuant to which the PCAOB conducts regular inspections to assess our auditor's compliance with the applicable professional
    standards, and thus our auditor is not subject to the determinations announced by the PCAOB on December 16, 2021. Although we believe
    that the HFCA Act and the related regulations do not currently affect us, we cannot assure you that there will not be any further
    implementations and interpretations of the Holding Foreign Companies Accountable Act or the related regulations, which might pose
    regulatory risks to and impose restrictions on us because of our operations in mainland China. On December 15, 2022, the PCAOB announced
    that PCAOB has secured complete access to inspect and investigate public accounting firms headquartered in mainland China and Hong
    Kong and vacated previous determinations to the contrary. If it is later determined that the PCAOB is unable to inspect or investigate
    our auditor completely, investors may be deprived of the benefits of such inspection. Any audit reports not issued by auditors that
    are completely inspected by the PCAOB, or a lack of PCAOB inspections of audit work undertaken in China that prevents the PCAOB from
    regularly evaluating our auditors' audits and their quality control procedures, could result in a lack of assurance that our
    financial statements and disclosures are adequate and accurate, then such lack of inspection could cause our securities to be delisted
    from the stock exchange.
(5)
Uncertainties exist with respect to the
    interpretation and implementation of the newly enacted Foreign Investment Law and how it may impact the viability of our current
    structure, our business, financial condition and results of operations. If our control over the VIE through contractual arrangements
    are deemed as foreign investment in the future, and any business of the VIE is restricted or prohibited from foreign investment under
    the "negative list" effective at the time, we may be deemed to be in violation of the Foreign Investment Law, the contractual
    arrangements that allow us to have control over the VIE may be deemed as invalid and illegal, and we may be required to unwind such
    contractual arrangements and/or restructure our business operations, any of which may have a material adverse effect on our business
    operation and consequently affecting our ability to prepare for and seek approval and commercialization of our product candidates
    both in China and elsewhere.
(6)
Cybersecurity and data privacy and security
    issues are subject to increasing legislative and regulatory focus in China. The Data Security Law of the PRC, which took effect on
    September 1, 2021, requires that data collection must be conducted in a legitimate and proper manner, and in order to safeguard data,
    data processing activities must be conducted to comply with respective graded protection systems for cybersecurity. On January 4,
    2022, the Cyber Administration of China promulgated the New CAC Measures, which came into effect on February 15, 2022. According
    to the New CAC Measures, critical information infrastructure operators purchasing network products and services and online platform
    operators carrying out data processing activities that affect or may affect national security shall conduct a cybersecurity review.
    Network platform operators holding personal information of more than 1 million users seeking to be listed abroad must apply for a
    cybersecurity review as well. The New CAC Measures do not apply to the Company or any of its subsidiaries or VIEs as of the date
    of this annual report. Continued expansion of business operations by the Company, however, could bring the Company within the scope
    of authority of the CAC rules, and future enacted or amended CAC rules may increase compliance standards on our business operation,
    and thus have a substantial impact on our business. As there remains significant uncertainty in the interpretation and enforcement
    of relevant PRC cybersecurity laws and regulations, we could be subject to cybersecurity review, and if so, there is no assurance
    that we would be able to pass such review in a timely manner or at all. In addition, we could become subject to enhanced cybersecurity
    review or investigations launched by PRC regulators in the future. Any failure or delay in the completion of the cybersecurity review
    procedures or any other non-compliance with the related laws and regulations may result in fines or other penalties, including suspension
    of business, website closure, and revocation of prerequisite licenses, as well as reputational damage or legal proceedings or actions
    against us, which may result in a material change in our operations, the value of the securities registered or could significantly
    limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities
    to significantly decline or be worthless.
50
(7)
On December 24, 2021, the CSRC issued the
    Administrative Provisions of the State Council Regarding the Overseas Issuance and Listing of Securities by Domestic Enterprises
    (Draft for Comments) (the "Draft Administrative Provisions") and the Measures for the Overseas Issuance of Securities
    and Listing Record-Filings by Domestic Enterprises (Draft for Comments) (the "Draft Filing Measures," collectively with
    the Draft Administrative Provisions, the "Overseas Issuance and Listing Regulations Drafts"), which are currently published
    for public comments only. According to the Overseas Issuance and Listing Regulations Drafts, among other things, after making initial
    applications with overseas stock markets for initial public offerings or any offerings after the initial public offering, all domestic
    companies shall file with the CSRC within three working days. The Overseas Issuance and Listing Regulations Drafts further stipulate
    that a fine between RMB 1 million and RMB 10 million may be imposed if an applicant fails to fulfill the filing requirements with
    the CSRC or conducts an overseas offering or listing in violation of the Overseas Issuance and Listing Regulations Drafts, and in
    cases of severe violations, a parallel order to suspend relevant businesses or halt operations for rectification may be issued, and
    relevant business permits or operational licenses revoked. The Overseas Issuance and Listing Regulations Drafts, if enacted, may
    subject us to additional compliance requirements in the future, and though we believe that none of the situations that would significantly
    limit our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline
    or be worthless.
(8)
The MOFCOM and the NDRC promulgated the
    Special Administrative Measures for Access of Foreign Investment (2021 Edition), or the Negative List (2021), stipulates that if
    a domestic enterprise engaged in business in the prohibited investment field issues shares abroad and is listed for trading, it shall
    be examined and approved by the relevant competent authorities of the state. According to a press release issued by the NDRC in relation
    to the Negative List (2021), the above provisions are only applicable to the direct overseas listing of domestic enterprises engaged
    in the prohibited investment field. We believe our listing on Nasdaq does not constitute a direct overseas listing of domestic enterprises
    mentioned in the above press release and therefore we are not subject to the examination and approval by the relevant competent authorities
    of the state in accordance with the Negative List (2021). However, the above regulations and drafts for comments also indicate the
    intention of the Chinese government to increase its regulation of offshore investment in company's utilizing the VIE structure
    to participate in the prohibited investment fields. If relevant governmental authority determines or new future rules provides that
    we are required to obtain the approval, we would have to apply for such approval. There is no assurance that we will be able to obtain
    such approval in time or at all. If we fail to obtain the approve as required or in a timely manner, the VIE arrangement may be deemed
    illegal and ordered to be cancelled by relevant government authorities, and other administrative measures or penalties may be imposed
    on us, which could materially and adversely affect our business, financial condition, results of operations and the value of our
    shares. Any failure of us to fully comply with new regulatory requirements may significantly limit or completely hinder our ability
    to offer or continue to offer our shares, cause significant disruption to our business operations, severely damage our reputation,
    materially and adversely affect our financial condition and results of operations and cause our shares to significantly decline in
    value or become worthless.
These
risks associated with being based in or having the majority of the Company's operations in China could result in a material change
in our operations and/or the value of the securities registered or could significantly limit or completely hinder our ability to offer
or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.
For
more information, see "Risk Factors- Risks Related to Doing Business in China".
4.B. Business
Overview
Overview
The
Company is not an operating company a Cayman Islands holding company with its operations conducted through its subsidiaries in the PRC
(the "Subsidiaries") and through contractual arrangements with its variable interest entity (the "VIEs"). We
engaged in a number of diverse business activities, including trucking services, car-hailing and driver management services, and car
owner services.
On
December 29, 2021, we entered into a Share Purchase Agreement with Cheyi BVI which operates its business through the VIE, Cheyi Network,
an integrated online car-hailing and driver management services company, and each of shareholders of Cheyi BVI. On December 31, 2021,
the parties completed the transaction. Cheyi Network was established in December 2015 as a comprehensive automobile service platform,
providing a full range of services to the automotive industry. Cheyi Network has built an integrated business platform with more than
6,000 vehicles and drivers for ride hailing services under management. Its vehicles and drivers provide services to major mobility technology
platforms, such as SAIC Mobility and T3 Mobility.
51
On
March 14, 2022, we entered into a Share Purchase Agreement with Yinhua which develops and operates a comprehensive auto related service
platform to serve auto insurance companies, and each of the shareholders of the Yinhua. On March 18, 2022, the parties completed the
transaction. Founded in 2018, Yinhua provides diversified, differentiated and customized value-added auto related services to auto insurance
companies, where the services include road security services, car maintenance services, car inspection services and other services. Yinhua
develops and operates a comprehensive auto related service platform for auto insurance companies combining intelligent human-vehicle
interaction functions with car owner programs.
On
December 21, 2022, we entered into a Share Purchase Agreement with Feipeng BVI which provides regional trucking services, and each of
the shareholders of the Feipeng BVI. On December 21, 2022, the parties completed the transaction. Feipeng BVI provides regional trucking
services in Xinjiang, PRC through its VIE, Feipeng. Feipeng mainly focuses on the short-distance coal transportation.
The
following chart sets forth a summary of the licenses and permissions obtained by the principal PRC subsidiaries as of the date of this
annual report:
Approval
Recipient
Issuing body
Date of grant
Date of expiry
Road Freight Forwarding Operation Permit
MingZhu
Shenzhen Transportation Committee
October 8, 2022
October 7, 2026
Road Freight Forwarding Operation Permit
MingZhu Pengcheng
Shenzhen Transportation Committee
September 17, 2022
September 16, 2026
Value-added Telecommunications Business License
Cheyi Network
Zhejiang Communications Administration
September 17, 2022
September 16, 2026
Value-added Telecommunications Business License
Zhisheng
Ministry of Industry and Information Technology
October 8, 2022
October 7, 2026
Road Transport Operation Permit
Feipeng
Xinjiang Road Transport Administration
September 17, 2022
September 16, 2026
We
have obtained all requisite licenses and permissions to conduct our business in China in material aspects. Furthermore, we believe that
(i) we will not be required to submit an application to the CSRC for its approval of the VIE arrangement under the "M&A Rules";
(ii)we would not constitute an "operator of critical information infrastructure" nor our or VIE's business and activities
would affect or may affect national security, so we believe we are not subject to the cybersecurity review under the Cybersecurity Review
Measures; and (iii) there are substantial uncertainties regarding the interpretation and application of PRC laws and regulations and
prospects for future PRC laws and regulations, and there can be no assurance that the relevant government agencies will take a view that
is not contrary to or otherwise different from the conclusions stated above. If we, our subsidiaries, or the VIEs (i) do not receive
or maintain such permissions or approvals, should the approval be required in the future by the PRC government, (ii) inadvertently conclude
that such permissions or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and we are required
to obtain such permissions or approvals in the future, our operations and financial conditions could be materially adversely affected,
our ability to offer securities to investors could be significantly limited or completely hindered and our securities may substantially
decline in value or be worthless. If it is determined in the future that the approval of the CSRC, the Cyberspace Administration of China
or any other regulatory authority is required, we may face sanctions by the CSRC, the Cyberspace Administration of China or other PRC
regulatory agencies. These regulatory agencies may impose fines and penalties on our operations in China, limit our ability to pay dividends
outside of China, limit our operations in China, delay or restrict the repatriation of the proceeds into China or take other actions
that could have a material adverse effect on our business, financial condition, results of operations, as well as the trading price of
our securities. The CSRC, the Cyberspace Administration of China or other PRC regulatory agencies also may take actions requiring us,
or making it advisable for us, to halt any securities offering we may undertake in the future. Consequently, if you engage in market
trading or other activities in anticipation of and prior to settlement and delivery, you do so at the risk that settlement and delivery
may not occur. In addition, if the CSRC, the Cyberspace Administration of China or other regulatory PRC agencies later promulgate new
rules requiring that we obtain their approvals in the future, we may be unable to obtain such approvals or a waiver of such approval
requirements, if and when procedures are established to obtain such a waiver. Any uncertainties and/or negative publicity regarding such
an approval requirement could have a material adverse effect on the trading price of our securities.
52
We
engaged in a number of diverse business activities, including trucking services, car-hailing and driver management services, and car
owner services.
Trucking
services
The
Company's trucking services are provided through Mingzhu and its subsidiaries and newly acquired VIE Feipeng and its subsidiaries.
Mingzhu
is a trucking service provider in China with over 21 years of experience in the transportation industry. It was our first operating subsidiary
formed 2002. It has been accredited by the China Federation of Logistics and Purchasing as a 4A-grade trucking service provider. Its
transportation services operate out of two terminals, one in the Guangdong region, and the other in the Xinjiang region. It primarily
provides dedicated trucking services within the PRC. It has created a successful business model that has allowed us to expand our customer
base and market coverage whilst maintaining good relationships with our existing customers. To further expand our market shares in Xinjiang
region, we acquired Feipeng, which focuses on the short-distance coal transportation in Xinjiang region.
Competition
We
believe that the following strengths differentiate us from our competitors and provide us with advantages for realizing the potential
of market opportunity:
●
To
                                            establish a solid reputation in the transportation industry in the PRC, we focus on the quality
                                            of our trucking services to ensure that we are able to meet the quality standards expected
                                            from our customers. Our focus on quality covers various areas such as vehicle reliability,
                                            service reliability, flexible and customizable service offerings for our customers, as well
                                            as responsiveness to customer feedback, and continuous process improvement.
●
We
                                            have been able to maintain stable business relationships with our major customers, including
                                            reputable logistics companies in the PRC. Working with sizeable customers has strengthened
                                            our company's reputation and credibility in the transportation industry.
●
We
                                            believe that the extensive industry expertise and experience of our management team is essential
                                            to our success. Our senior management team has an average of approximately 15 years of experience
                                            with our company and 19 years of experience in the transportation industry in the PRC. We
                                            believe that the experience and knowledge of our management team would enable us to keep
                                            abreast of our competitiveness and market landscape from time to time, recognize the needs
                                            of our customers more readily and manage our operations, specifically, labor and vehicle
                                            deployment, more efficiently.
●
With
                                            two regional terminals, one in Guangdong and the other in Xinjiang, we have set up an established
                                            network of transport nodes throughout the years. Such a network has opened many routes for
                                            us to offer our customers more comprehensive services. We have become capable of covering
                                            a larger geographic region and provide more types of transportation services. We believe
                                            that our wide range of services offered has provided us with a significant competitive advantage
                                            over other local service providers in the PRC that only offer limited types of road trucking
                                            services with fixed routes, itinerary, and schedules.
Car-hailing
and driver management services
The
Company's car-hailing and driver management services are provided through Cheyi Network and its subsidiaries.
Cheyi
Network was established in December 2015 as a comprehensive automobile service platform, providing a full range of services to the automotive
industry. Cheyi Network has built an integrated business platform with more than 6,000 vehicles and drivers for ride hailing services
under management. Its vehicles and drivers provide services to major mobility technology platforms, such as SAIC Mobility and T3 Mobility.
53
Competition
We
believe that the following strengths differentiate us from our competitors and provide us with advantages for realizing the potential
of market opportunity:
●
To
                                            establish a solid reputation in the transportation industry in the PRC, we focus on the quality
                                            of our trucking services to ensure that we are able to meet the quality standards expected
                                            from our customers. Our focus on quality covers various areas such as vehicle reliability,
                                            service reliability, flexible and customizable service offerings for our customers, as well
                                            as responsiveness to customer feedback, and continuous process improvement.
●
We
                                            have been able to maintain stable business relationships with our major customers, including
                                            reputable logistics companies in the PRC. Working with sizeable customers has strengthened
                                            our company's reputation and credibility in the transportation industry.
●
We
                                            believe that the extensive industry expertise and experience of our management team is essential
                                            to our success. Our senior management team has an average of approximately 15 years of experience
                                            with our company and 19 years of experience in the transportation industry in the PRC. We
                                            believe that the experience and knowledge of our management team would enable us to keep
                                            abreast of our competitiveness and market landscape from time to time, recognize the needs
                                            of our customers more readily and manage our operations, specifically, labor and vehicle
                                            deployment, more efficiently.
●
With
                                            two regional terminals, one in Guangdong and the other in Xinjiang, we have set up an established
                                            network of transport nodes throughout the years. Such a network has opened many routes for
                                            us to offer our customers more comprehensive services. We have become capable of covering
                                            a larger geographic region and provide more types of transportation services. We believe
                                            that our wide range of services offered has provided us with a significant competitive advantage
                                            over other local service providers in the PRC that only offer limited types of road trucking
                                            services with fixed routes, itinerary, and schedules.
Car
owner services
The
Company's car owner services are provided through Zhisheng.
Zhisheng
was founded in 2018, Zhisheng provides diversified, differentiated and customized value-added auto related services to auto insurance
companies, where the services include road security services, car maintenance services, car inspection services and other services. Zhisheng
develops and operates a comprehensive auto related service platform for auto insurance companies combining intelligent human-vehicle
interaction functions with car owner programs.
Competition
We
believe that the following strengths differentiate us from our competitors and provide us with advantages for realizing the potential
of market opportunity:
●
To
                                            establish a solid reputation in the transportation industry in the PRC, we focus on the quality
                                            of our trucking services to ensure that we are able to meet the quality standards expected
                                            from our customers. Our focus on quality covers various areas such as vehicle reliability,
                                            service reliability, flexible and customizable service offerings for our customers, as well
                                            as responsiveness to customer feedback, and continuous process improvement.
●
We
                                            have been able to maintain stable business relationships with our major customers, including
                                            reputable logistics companies in the PRC. Working with sizeable customers has strengthened
                                            our company's reputation and credibility in the transportation industry.
54
●
We
                                            believe that the extensive industry expertise and experience of our management team is essential
                                            to our success. Our senior management team has an average of approximately 15 years of experience
                                            with our company and 19 years of experience in the transportation industry in the PRC. We
                                            believe that the experience and knowledge of our management team would enable us to keep
                                            abreast of our competitiveness and market landscape from time to time, recognize the needs
                                            of our customers more readily and manage our operations, specifically, labor and vehicle
                                            deployment, more efficiently.
●
With
                                            two regional terminals, one in Guangdong and the other in Xinjiang, we have set up an established
                                            network of transport nodes throughout the years. Such a network has opened many routes for
                                            us to offer our customers more comprehensive services. We have become capable of covering
                                            a larger geographic region and provide more types of transportation services. We believe
                                            that our wide range of services offered has provided us with a significant competitive advantage
                                            over other local service providers in the PRC that only offer limited types of road trucking
                                            services with fixed routes, itinerary, and schedules.
Customers
Our
customers are mainly sizeable third-party logistics companies, freight forwarders, warehouse operators, and other supply chain service
providers in the PRC.
Our
Relationship with Major Customers
During
the years ended December 31, 2022, 2021 and 2020, sales to our top five customers accounted for approximately 31.4%, 49.4% and 78.2%,
respectively. We have been able to maintain stable business relationships with our major customers, including reputable logistics companies
in the PRC. Working with sizeable customers has strengthened our company's reputation and credibility in the transportation industry.
Despite
our concentration on a limited number of major customers, we believe that a number of factors will help mitigate any material adverse
impact of such concentration on our business operations and financial condition. Our services model and facilities are not specifically
designed to cater solely for one particular customer. In contrast, they are flexible and adaptable in serving different customers'
needs. In the event that our current business relationship with our five largest customers or any one of them deteriorates, our services
can be readily transferred to serve other potential new customers and satisfy their needs. The preparation works required for serving
new customers usually include fine-tuning quality procedures to suit individual customer requirements, coordinating with new customers,
re-designing the delivery route, allocating warehousing space and updating computer systems to facilitate the process, which in our view
will not incur any significant cost or require long transition periods. In fact, our major customers continued to evolve in the past
three years.
We
believe that our continuous effort in providing high quality trucking services to our customers is the key to enlarge our market share
in the transportation industry, strengthen our customer base as well as enhance our marketing effectiveness. Our operation team generally
handles inquiries, complaints and feedbacks from our customers and will maintain a regular contact with our external transportation subcontractors
with the goal of resolving issues such as late deliveries or complaints from customers in a timely fashion.
We
recognize that having a high level of customer services is crucial in maintaining our reputation in the market and cultivating customer
loyalty. Thus, we follow up with the orders and keep track of the level of satisfaction of our customers. We also gather customers'
feedbacks and review the flow of our trucking services in order to increase our customers' satisfaction and improve our service
quality. For further information regarding our quality control, please refer to "— Quality Assurance."
Customer
Acquisition
Our
new customers are mainly referrals from our existing customers which in our view, is a reflection of our existing customers' satisfaction
with our services. Our primary strategy for new customer acquisition is to further develop our existing terminals in Guangdong and Xinjiang
by expanding the range of transportation solutions offered from these terminals. We also plan to expand into new geographic regions through
the opening of new terminals in new markets.
55
In
addition, we seek out new customers through marketing activities such as participating in trade fairs and functions. We focus on attracting
financially stable customers who ideally share traffic flows that complement our existing routes. By maintaining an even flow of freight
traffic, we improve our utilization rate by minimizing movement of empty idle equipment. Additionally, we continuously form strategic
alliances with local government agencies to attain stronger regional market knowledge and influence.
Seasonality
For
our customers that are logistic companies, the routes and schedules that have been contracted with us are generally scheduled and regular
and remain unchanged throughout the contract period. If our customers experience sudden spikes in demand for trucking services, they
may seek other service providers instead of changing the terms of our trucking services.
In
general, demand for our trucking services has been observed to be higher in June, November and December each year due to the sales campaigns
organized by various online shopping platforms. To meet the demand in peak seasons, we extend our hours of operation each day during
these months. Despite peak demand seasons being observed in the consumer goods industry, the business's dedicated trucking services
ensure a level of stability in our operations and therefore our directors feel that seasonality do not have major impact to the business'
overall revenue and business operations.
For
car-hailing and driver management services and car-owner services, there is no significant impact found as due to seasonality.
Our
Supply
The
supplies we need for our trucking service business mainly include insurance, tires, vehicles, fuel oil and gas. The supplies we need
for our car-hailing and driver management services are pool of vehicles and drivers. The supplies we need for our car-owner services
are car services subcontractors.
Sales,
Marketing and Distribution
We
have not spent a significant amount of capital on advertising in the past, and our advertising budget continues to be limited.
We
mainly rely on our established relationships with our existing customers, customer referrals and our reputation to expand our business.
Aside from obtaining new customers through referrals, we also seek out new customers by attending and participating in trade fairs. Our
management team will regularly attend functions to build a stronger network with existing customers and so that potential customers may
be referred to us. Our sales and marketing team regularly contact customers to maintain good business relationship and expand our network
by soliciting new customers through referrals from existing customers.
Intellectual
Property
Regulations
Relating to Intellectual Property in the PRC
Copyright
Pursuant
to the Copyright Law of the PRC, as amended in 2010, copyright protection extends to cover Internet activities and products disseminated
over the Internet. Pursuant to the Regulations on the Protection of Computer Software promulgated by the State Council In December 2001
and most recently amended in January 2013, and the Rules for the Registration of Computer Software Copyright, which was promulgated by
the China Copyright Office and came into effect in February 2002, anyone publishes, revises or translates computer software without obtaining
the prior approval of the computer software copyright holders shall bear civil liability to the copyright owner because of harming the
copyright. The corporate computer software copyright is valid for a term of 50 years until 31 December of the 50th year, starting from
the date as of first publication. The computer software copyright owners shall register at the registration institution authorized by
the PRC Copyright Office to obtain the computer software copyright registration certificates as preliminary evidence of the computer
software copyright being registered.
56
We
own 17 PRC copyright registrations, including 1 art-work copyright and 16 software copyrights.
Name
Copyright
    No./Trademark No.
Applicant/Copyright
Holder
Status
Expiration
Date
Yangang
    Mingzhu Trunk Road Transportation Personnel Management System V1.0
2017SR625777
Mingzhu
Registered
January 6, 2067
Yangang
    Mingzhu Trunk Road Transportation Vehicle Registration System V1.0
2017SR625609
Mingzhu
Registered
February 28, 2067
Yangang
    Mingzhu Harbor Collection and Transportation Goods Inspection System V1.0
2017SR625618
Mingzhu
Registered
March 6, 2067
Yangang
    Mingzhu Port Collection Weighing System V1.0
2017SR626715
Mingzhu
Registered
April 10, 2067
Yangang
    Mingzhu Cold Chain Transportation Temperature Real-time Monitoring System V1.0
2017SR626709
Mingzhu
Registered
May 15, 2067
Yangang
    Mingzhu Cold Chain Transportation Temperature Control System V1.0
2017SR626701
Mingzhu
Registered
June 9, 2067
Yangang
    Mingzhu Supplies Centralized Supply and Sales System V1.0
2017SR626921
Mingzhu
Registered
June 19, 2067
Yangang
    Mingzhu Supplies Integrated Sales Management System V1.0
2017SR625793
Mingzhu
Registered
July 6, 2067
Yangang
    Mingzhu property integrated parking management system V1.0
2017SR626312
Mingzhu
Registered
July 21, 2067
Yangang
    Mingzhu property grid-based information system V1.0
2017SR625829
Mingzhu
Registered
August 18, 2067
Yangang
    Mingzhu Real-time Inquiry and Monitoring Management Software for Distribution Information V1.0
2019SR0561346
Mingzhu
Registered
December 4, 2068
Yangang
    Mingzhu Intelligent Remote Control Sorting System V1.0
2019SR0561184
Mingzhu
Registered
December 25, 2068
Yangang
    Mingzhu Freight Vehicle Track Monitoring Big Data Platform V1.0
2019SR0561342
Mingzhu
Registered
October 17, 2068
Yangang
    Mingzhu Abnormal Freight Information Warning Platform V1.0
2019SR0561338
Mingzhu
Registered
January 9, 2069
Yangang
    Mingzhu Intelligent Alert System for Capacity Cost Control V1.0
2019SR0559893
Mingzhu
Registered
November 7, 2068
Dynamic
    logistics distribution method and its system based on network communication V1.0
2019SR0561251
Mingzhu
Registered
November 28, 2068
Yangang
    Mingzhu Logo
Guo Zu Deng Zi-2021-F-00006375
Mingzhu
Registered
N/A
Trademark
Pursuant
to the Trademark Law of the PRC, as last amended in April 2019 and became effective from November 1, 2019, and the Implementation Regulations
on the Trademark Law of the PRC amended in April 2014, the period of validity of a registered trademark shall be ten years, counted from
the day the registration is approved. The trademark registrant may, by concluding a trademark licensing contract, authorize other persons
to use the registered trademark. The licensor shall supervise the quality of the goods on which the licensee uses the licensor's
registered trademark, and the licensee shall guarantee the quality of the goods on which the registered trademark is used. Without putting
the licensing of the trademark on records, the trademark shall not be used to defend the bona fide third party.
We
have been granted one trademark which is registered trademarks in the PRC:
Name
Application
    No./Trademark No.
Applicant/Trademark
Holder
Status
Expiration
Date
22675420
Mingzhu
Registered
February 20, 2028
57
Patent
Pursuant
to the Patent Law of the PRC, as amended in 2008, after the grant of the patent right for an invention or utility model, except where
otherwise provided for in the Patent Law, no entity or individual may, without the authorization of the patent owner, exploit the patent,
that is, make, use, offer to sell, sell or import the patented product, or use the patented process, or use, offer to sell, sell or import
any product which is a direct result of the use of the patented process, for production or business purposes. After a patent right is
granted for a design, no entity or individual shall, without the permission of the patent owner, exploit the patent, that is, for production
or business purposes, manufacture, offer to sell, sell, or import any product containing the patented design. Once the infringement of
a patent is confirmed, the infringer shall, in accordance with the regulations, undertake to cease the infringement, take remedial action,
and pay damages, etc.
We
currently own 6 PRC patents related to technologies used in connection with trucking services, including 1 invention patent and 5 utility
patents.
Name
Application
    No./Patent No.
Applicant/Patent
Holder
Status
Expiration
Date
A container anti-theft
    lock
ZL201721417207.4
Mingzhu
Registered
October 27, 2027
Freight vehicle engine
    status monitoring system
ZL201721398988.7
Mingzhu
Registered
October 27, 2027
Freight vehicle vision
    blind area monitoring system
ZL201721400239.3
Mingzhu
Registered
October 27, 2027
Freight vehicle fuel tank
    status monitoring system
ZL201721398999.5
Mingzhu
Registered
October 27, 2027
Freight vehicle tire status
    monitoring system
ZL201721398990.4
Mingzhu
Registered
October 27, 2027
A cantilever hoist for
    logistics transportation
ZL201710933794.0
Mingzhu
Registered
May 21, 2039
Domain
Name
The
domain name is protected and regulated under the Measures for the Administration of Domain Names for the Internet promulgated in August
2017 and effective in November 2017. According to these measures, the principle "first come, first serve" is followed for
the domain name registration service. After completing the domain name registration, the applicant becomes the holder of the domain name
registered by him/it. Any organization or individual may file an application for settlement with the domain names dispute resolution
institution or file a lawsuit in the people's court in accordance with the law if such organization or individual consider its/his
legal rights and interests to be infringed by domain names registered or used by others.
We
own one international domain name.
Name
Domain
    Name
Domain
    Name
Holder
Status
Expiration
Date
International
    Domain Name Registration Certificate
szygmz.com
Mingzhu
Registered
March 4, 2024
Environmental
Matters
Pursuant
to the PRC Prevention of Environmental Noise Pollution Law, noise arising from the industrial and manufacturing activities should not
exceed the prescribed emission level. We believe that we are in compliance with such requirement.
Due
to the nature of our business, our operational activities do not directly generate industrial pollutants. As such, we have not directly
incurred any cost of compliance with applicable PRC environmental protection rules and regulations as of the date of this annual report
and do not expect that we will directly incur significant costs for such compliance in the future.
58
Pursuant to the Limits and
Measurement Methods of Fuel Consumption of Operating Vehicles and Limits and Measurement Methods of Fuel Consumption of Operating Truck,
fuel consumption of our vehicles is subject to certain limitations prescribed thereunder. We have an internal policy in place to ensure
all vehicles that we purchase are in compliance with these measures. We also engaged in fuel consumption testing project with truck manufacturer
to test the fuel consumption of certain vehicles. In addition, we have invested largely in LNG vehicles to become more environmentally
friendly and to adhere to international standards.
MingZhu, has obtained ISO14001:2015
Certification, which is an internationally recognized standard for identifying, managing, monitoring and controlling their environmental
issues. As of the date of this annual report, we had not come across any material non-compliance issues in respect of any applicable laws
and regulations on environmental protection. We have not been subject to any administrative sanctions or penalties that have a material
and adverse effect on our financial condition or business operation.
Facilities
We believe our facilities
are sufficient for our current needs and that, should it be needed, suitable additional space will be available on commercially reasonable
terms to accommodate any such expansion of our operations.
Location of property
Approximate
gross floor
area
Term of Lease
Facility Usage
(sq. meters)
27th floor, Yantian Modern Industry Service Center, No.3018, Shayan Road, Yantian District, Shenzhen City, Guangdong Province, PRC
2,095.61
Five years (November 21, 2018 to November 20, 2023)
Office
Room 2307 and Room 2308, Unit A, Building 1, Haitongju, Zhongqing 1st road, Yantian District, Shenzhen City, Guangdong Province, PRC
99.04
Three years (September 1, 2021 to August 31, 2024)
Staff Accommodation
Licenses and Permits
We have obtained all necessary
licenses, approvals and permits that are material to our road transportation business, all of which are validly issued and current as
of the date of this annual report. The details of the permits we have obtained by are as follows:
Approval
Recipient
Issuing body
Date of grant
Date of expiry
Road Freight Forwarding Operation Permit
MingZhu
Shenzhen Transportation Committee
October 8, 2022
October 7, 2026
Road Freight Forwarding Operation Permit
MingZhu Pengcheng
Shenzhen Transportation Committee
September 17, 2022
September 16, 2026
Value-added
Telecommunications Business License
Cheyi Network
Zhejiang Communications Administration
October 8, 2022
October 7, 2026
Value-added Telecommunications Business License
Zhisheng
Ministry of Industry and Information Technology
September 17, 2022
September 16, 2026
Road Transport Operation Permit
Feipeng
Xinjiang Road Transport Administration
November 9, 2022
November 8, 2026
59
Employees
We had 180 full-time employees
as of December 31, 2022. The following table sets forth the number of our full-time employees categorized by function as of December 31,
2022:
Function
Number of
Employees
Management
6
Administrative and Accounting
15
Safety and Technique
4
Operations
31
Drivers
124
Total
180
We invest significant resources
in the recruitment of employees in support of our rapidly growing business operations. We have established comprehensive training programs,
including orientation programs and on-the-job-training, to enhance performance and service quality. We also regularly conduct employee
trainings in the areas of risk management, managerial skills, company culture and communications.
As required by regulations
in China, we participate in various government statutory social security plans, including a pension contribution plan, a medical insurance
plan, an unemployment insurance plan, a work-related injury insurance plan, a maternity insurance plan and a housing provident fund. We
are required under PRC law to contribute to social security plans at specified percentages of the salaries, bonuses and certain allowances
of our employees up to a maximum amount specified by the local government from time to time. For risk in relation to our contribution
for employee social security plans, see "3.D. Risk Factors - Risks Related to Doing Business in China—Any failure to comply
with relevant regulations relating to social insurance and housing provident fund may subject us to penalty and materially and adversely
affect our business, financial condition, and results of operations."
Recognitions and Awards
We have been accredited by
the China Federation of Logistics & Purchasing as a 4A-grade trucking services company for the period of September 2020 to September
2023. A 4A-grade trucking services provider must meet the criteria of being able to cover routes across provinces and have (1) RMB300
million to RMB1.65 billion freight revenue per year, (2) have been operating for at least three years to five years, (3) have RMB200 million
to RMB1.1 billion total assets (no higher than 70% of debt ratio), (4) own 400 to 1500 transport vehicles (or total weight of 2000 to
7500 tones), (5) have 30 to 50 operating outlets, and (6) operate an effective institution with operating systems for management, finance,
statistics, and have technical departments in place.
In addition to our 4A-grade
accreditation, we have also been recognized as a Green Card Enterprise according to the qualitative assessments of Four Rates system set
by the Shenzhen Bureau of Transportation in 2007 and 2008. Furthermore, we have received the following awards and recognitions that are
notable within the industry:
Year of
Award
Recipient
Award
Awarding organization or authority
2019
MingZhu
2018 Shenzhen National Road Traffic Safety Advanced Unit
Shenzhen Public Security Bureau Traffic Police Station
2017
MingZhu
Guangdong Province Road General Freight Transport Enterprise Integrity Evaluation AAA (Excellent)
Guangdong Provincial Department of Transportation
2017
MingZhu
Yantian District Advanced Enterprises with Harmonious Labor Relations
Shenzhen Yantian District Labor Relations Coordination Committee
2016
MingZhu
Advanced Unit of Transportation Safety Production
Shenzhen Port and Freight Transport Administration
2014
MingZhu
Outstanding Contribution Award
Yantian Chamber of Logistics
2010
MingZhu
Excellent Enterprise
Shenzhen Municipal Transportation Bureau and Shenzhen Container Trailer Transport Association
2009
MingZhu
Shenzhen Advanced Unit for Transportation Safety Production
Shenzhen Municipal Transportation Bureau]
60
Legal Proceedings
On January 20, 2022, Shenzhen
Xincang Freight Co., Ltd. submitted the Civil Complaint to The People's Court of Yantian District, requesting the defendant Jian
Yang to compensate for the economic loss of RMB 233,055, judgment of the defendant Yangang Pearl for Jian Yang's compensation liability
to assume joint liability. According to the civil order issued by The People's Court of Yantian District on January 27, 2022, the
applicant Shenzhen Xincang Freight Co., Ltd. applies for property preservation in the case of the liability dispute between the applicant
Shenzhen Xincang Freight Co., Ltd. of seizing and freezing the property worth RMB 234,990.12 under the name of the respondent Mingzhu.
According to the notice of response issued by The People's Court of Yantian District, on February 10, 2022, the case of the liability
dispute between the plaintiff and the defendant Mingzhu and Jian Yang was filed by the Court on January 21, 2022. A trial is scheduled
for March 18, 2022. As of the date of this annual report, the case had been concluded and the Company had paid out the claimed amount
of compensation.
Other than the proceeding
disclosed above, we are currently not a party to any legal or administrative proceedings that will likely have material impact on our
business operations, financial condition or results of operations. We may from time to time be subject to various legal or administrative
claims and proceedings arising in the ordinary course of business. Litigation or any other legal or administrative proceeding, regardless
of the outcome, may result in additional costs and diversion of our resources, including our management's time and attention.
Governmental Regulations
Business license
Any company that conducts
business in the PRC must have a business license that covers a particular type of work. Our business license covers our present business
of road transportation. Prior to expanding our business beyond that of our business license, we are required to apply and receive approval
from the PRC government.
Employment laws
Enterprises in China are mainly
subject to the following PRC labor laws and regulations: Labor Law of the PRC, PRC Labor Contracts Law, the Social Insurance Law of the
PRC, the Regulation of Insurance for Work-Related Injury, the Regulations on Unemployment Insurance, the Provisional Measures on Insurance
for Maternity of Employees, the Interim Regulation on the Collection and Payment of Social Insurance Premiums, the Administrative Regulation
on Housing Fund and other related regulations, rules and provisions issued by the relevant governmental authorities from time to time.
Pursuant to Labor Law of the
PRC, which was promulgated in July 1994, effective January 1995, and most recently amended in December 2018, companies must enter into
employment contracts with their employees, based on the principles of equality, consent and agreement through consultation. Companies
must establish and effectively implement a system of ensuring occupational safety and health, educate employees on occupational safety
and health, preventing work-related accident and reducing occupational hazards. Companies must also pay for their employees' social
insurance premium.
The principal regulations
governing the employment contract is the PRC Labor Contracts Law, which was promulgated in June 2007 and amended in December 2012. Pursuant
to the PRC Labor Contracts Law, employers shall establish employment relationship with employees on the date that they start employing
the employees. To establish an employment, a written employment contract shall be concluded, or employers will be liable for the illegal
actions. Furthermore, the probation period and liquidated damages shall be restricted by the law to safeguard employees' rights
and interests.
As required under the Social
Insurance Law of the PRC, the Regulation of Insurance for Work-Related Injury, the Regulations on Unemployment Insurance, the Provisional
Measures on Insurance for Maternity of Employees and the Administrative Regulation on Housing Fund, enterprises in China are obliged to
provide employees with welfare schemes covering pension insurance, unemployment insurance, maternity insurance, injury insurance, medical
insurance and housing accumulation fund.
61
Foreign currency exchange
Under the PRC foreign currency
exchange regulations applicable to us, the Renminbi is convertible for current account items, including the distribution of dividends,
interest payments, and trade and service-related foreign exchange transactions. Conversion of Renminbi for capital account items, such
as direct investment, loan, security investment and repatriation of investment, however, is still subject to the approval of the PRC State
Administration of Foreign Exchange, or SAFE. Foreign-invested enterprises may buy, sell and/or remit foreign currencies only at those
banks authorized to conduct foreign exchange business, after providing valid commercial documents and, in the case of capital account
item transactions, obtaining approval from SAFE. Capital investments by foreign-invested enterprises outside of China are also subject
to limitations, which include approvals by the Ministry of Commerce, SAFE and the State Reform and Development Commission.
Mandatory statutory reserve and dividend distributions
Under applicable PRC regulations,
foreign-invested enterprises in China may pay dividends out of their accumulated profits only, if any, as 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 for its general reserve until the cumulative amount of such reserve reaches
50% of its registered capital. These reserves are not distributable as cash dividends. The board of directors of a foreign-invested enterprise
has the discretion to allocate a portion of its after-tax profits to staff welfare and bonus funds, which may not be distributed to equity
owners except in the event of liquidation.
Overseas Listings
Under the M&A Rules, were
jointly adopted by six PRC regulatory authorities, including CSRC, in August 2006, and most recently amended in June 2009, a foreign investor
is required to obtain necessary approvals when (i) a foreign investor acquires equity in a domestic non-foreign invested enterprise thereby
converting it into an FIE, or subscribes for new equity in a domestic enterprise via an increase of registered capital thereby converting
it into an FIE; or (ii) a foreign investor establishes an FIE which purchases and operates the assets of a domestic enterprise, or which
purchases the assets of a domestic enterprise and injects those assets to establish an FIE. According to the M&A Rules, where a domestic
company or enterprise, or a domestic natural person, through an overseas company established or controlled by it/him, acquires a domestic
company which is related to or connected with it/him, approval from MOFCOM is required.
On February 17, 2023, the
CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the "Trial Administrative
Measures") and relevant supporting guidelines (together with the Trial Administrative Measures, the "New Administrative Rules
Regarding Overseas Listings"), which came into effective on March 31, 2023. According to the New Administrative Rules Regarding
Overseas Listings, a company based in the mainland of China that seeks to offer and list securities in overseas markets should fulfill
the filing procedure with the CSRC as per requirement of the Trial Administrative Measures. In particular, where a domestic company seeks
to indirectly offer and list securities in overseas markets, the issuer should designate a major domestic operating entity as the domestic
responsible entity to file with the CSRC. Initial public offerings or listings in overseas markets should be filed with the CSRC within
3 working days after the relevant application is submitted overseas. Subsequent securities offerings of an issuer in the same overseas
market where it has previously offered and listed securities should be filed with the CSRC within 3 working days after the offering is
completed. The required filing materials with the CSRC include (without limitation) record-filing reports and related undertakings and
PRC legal opinions issued by domestic law firms (with related undertakings), in which the VIE structure (if applicable) and reasons and
risk factor thereof is required to be clarified in details.
Regulations Relating to Taxation in the PRC
Enterprise Income Tax
In accordance with the PRC
Enterprise Income Tax Law (the "EIT Law", promulgated in March 2007 and last amended in December 2018) and the Regulations
on the Implementation of Enterprise Income Tax Law of the PRC (the "EIT Regulations", promulgated in December 2007 and last
amended in April 2019), enterprises are classified as either "resident enterprises" or "non-resident enterprises."
Enterprises that are set up in the PRC under the PRC laws, or that are set up in accordance with the law of the foreign country (region)
whose actual administration institution is in PRC, shall be considered as "resident enterprises." Enterprises established
under the law of the foreign country (region) with "de facto management bodies" outside the PRC, but have set up institutions
or establishments in PRC or, without institutions or establishments set up in the PRC, have income originating from PRC, shall be considered
as "non-resident enterprises." The Circular Related to Relevant Issues on the Identification of a Chinese holding Company
Incorporated Overseas as a Residential Enterprise under the Criterion of De Facto Management Bodies Recognizing issued by the State Administration
of Taxation (the Circular 82) promulgated by the State Administration of Taxation on April 22, 2009 and last revised in December 2017
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 requirements are satisfied: (i) the senior management
and core management departments in charge of its daily operations function mainly in China; (ii) its financial and human resources decisions
are subject to determination or approval by persons or bodies in China; (iii) its major assets, accounting books, company seals and minutes
and files of its board and shareholders' meetings are located or kept in China; and (iv) half or more than half of the enterprise's
directors or senior management with voting rights reside in China. Although the circular only applies to offshore enterprises controlled
by PRC enterprises and not those controlled by PRC individuals or foreigners, the determining criteria set forth in the circular may reflect
the State Administration of Taxation's general position on how the "de facto management body" test should be applied
in determining the tax resident status of offshore enterprises, regardless of whether they are controlled by PRC enterprises, individuals
or foreigners.
62
A resident enterprise shall
pay EIT on its income originating from both inside and outside PRC at an EIT rate of 25%. A non-resident enterprise that has establishments
or places of business in the PRC shall pay EIT on its income originating from PRC obtained by such establishments or places of business,
and on its income which deriving outside PRC but has an actual connection with such establishments or places of business, at the EIT rate
of 25%. A non-resident enterprise that does not have an establishment or place of business in the PRC, or it has an establishment or place
of business in the PRC but the income has no actual connection with such establishment or place of business, shall pay EIT on its passive
income derived from the PRC at a reduced EIT rate of 10%.
According to the Public Notice
Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-Tax Resident Enterprises which was promulgated
by SAT on February 3, 2015 and came into effect on the same day, revised in October 2017 and December 2017, where a non-resident enterprise
indirectly transfers equities and other assets of a PRC resident enterprise to avoid the EIT payment obligation by making an arrangement
with no reasonable business purpose, such indirect transfer shall be redefined and recognized as a direct transfer in accordance with
the provisions of the EIT Law. Where the EIT on the income from the indirect transfer of real estate or equities shall be paid in accordance
with the provisions of this Announcement, the entity or individual that directly assumes the obligation to make relevant payments to the
transferor according to the provisions of the relevant laws or as agreed upon in the contract shall be the withholding agent. On October
17, 2017, the SAT issued the Announcement of the State Administration of Taxation on Issues Concerning the Withholding of Non-resident
Enterprise Income Tax at Source (the "SAT Bulletin 37), which came into effect on December 1, 2017 and revised in June 2018. The
SAT Bulletin 37 further clarifies the practice and procedure of the withholding of non-resident enterprise income tax.
Value-Added Tax
Pursuant to the Provisional
Regulations on Business Tax which was promulgated by the State Council in December 1993 and revised in November 2008, organizations and
individuals engaging in provision of labor services stipulated in these regulations, transfer of intangible assets or sale of immovables
in China shall be taxpayers of business tax and shall pay business tax and the applicable business rate for transportation industry is
3%. The Provisional Regulations on Business Tax was abolished in November 2017. In accordance with Circular on Comprehensively Promoting
the Pilot Program of the Collection of Value-added Tax in Lieu of Business Tax (Caishui [2016] No. 36), which was promulgated on March
23, 2016 and came into effect on May 1, 2016 and has been partially abolished, upon approval of the State Council, the pilot program of
the collection of value-added tax (the "VAT") in lieu of business tax shall be promoted nationwide in a comprehensive manner
starting from May 1, 2016, and all business tax payers engaged in the building industry, the real estate industry, the financial industry
and the life service industry shall be included in the scope of the pilot program with regard to payment of value-added tax instead of
business tax. For transportation service income, the application VAT tax rate is 11%. For international transportation service income,
the application VAT tax rate is 0%.
Pursuant to the Provisional
Regulations on Value-Added Tax of the PRC (the "VAT Regulations") last amended in November 2017 and effective on the same
day and its implementation rules, all entities or individuals in the PRC engaging in the sale of goods, providing labor services of processing,
repairs or maintenance, or selling services, intangible assets or real property in China, or importing goods to China are required to
pay the VAT. The amount of VAT payable is calculated as "output VAT" minus "input VAT." The rate of VAT is 17%
for those engaging in the sale of goods or labor services or tangible personal property leasing services or importation of goods except
as otherwise provided by the VAT Regulations. Furthermore, pursuant to the VAT Regulations, the tax rate of VAT is 11% for the sales of
the service of transportation, posting, basic telecommunications, construction and leasing real estate, the sale of real estate and the
transfer of land use right, or sell or import the goods listed in the VAT Regulations.
In April 2018, the Ministry
of Finance ("MOF") and SAT jointly promulgated the Circular of the Ministry of Finance and the State Administration of Taxation
on Adjustment of Value-Added Tax Rates, or Circular 32, according to which for VAT taxable sales acts or importation of goods originally
subject to value-added tax rates of 17% and 11% respectively, such tax rates shall be adjusted to 16% and 10%, respectively. Circular
32 became effective on May 1, 2018 and shall supersede existing provisions which are inconsistent with Circular 32.
In March 2019, MOF, SAT and
General Administration of Customs ("GAC") jointly promulgated the Announcement on Policies for Deepening the VAT Reform, or
Circular 39, according to which for general VAT payers' sales activities or imports that are subject to VAT at an existing applicable
rate of 16% or 10%, the applicable VAT rate is adjusted to 13% or 9% respectively. This Announcement came into force on April 1, 2019.
63
Urban Maintenance and Construction Tax
Pursuant to the Provisional
Regulation on Urban Maintenance and Construction Tax of the PRC as amended in January 2011, any taxpayer, whether an entity or individual,
of consumption tax, value-added tax or business tax shall be required to pay urban maintenance and construction tax based on the total
amount of consumption tax, value-added tax or business tax paid by such taxpayer. The tax rate shall be 7% for a taxpayer whose domicile
is in an urban area, 5% for a taxpayer whose domicile is in a county or a town, and 1% for a taxpayer whose domicile is not in any urban
area or county or town.
Education Surcharge
Pursuant to the Provisional
Provisions on Imposition of Education Surcharge as amended in January 2011, a taxpayer, whether an entity or individual, of consumption
tax, value-added tax or business tax shall pay an education surcharge at a rate of 3% on the total amount of consumption tax, value-added
tax or business tax paid by such entity, unless such obliged taxpayer is instead required to pay a rural area education surcharge as stipulated
under the Notice of the State Council on Raising Funds for Schools in Rural Areas that promulgated by State Council in December 1984.
Dividend Withholding Tax
The EIT Law prescribes a standard
withholding tax rate of 20% on dividends and other China-sourced income of non-resident enterprises that have not set up institutions
or establishments in China, or have set up institutions or establishments but the income obtained by the said enterprises has no actual
connection with the set up institutions or establishments. However, the EIT Regulations reduced the rate from 20% to 10% with the implementation
date starting from 1 January 2008. Pursuant to the EIT Law and the EIT Regulations, an income tax rate of 10% will normally be applicable
to dividends payable to investors that are "non-resident enterprises", and gains derived by such investors, which (a) do not
have an establishment or place of business in mainland China or (b) have an establishment or place of business in mainland China, but
the relevant income is not effectively connected with the establishment or place of business to the extent such dividends and gains are
derived from sources within mainland China. Such income tax on the dividends may be reduced pursuant to a tax treaty between China and
the jurisdictions in which our foreign shareholders reside.
Pursuant to the Arrangement
Between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention
of Fiscal Evasion with Respect to Tax on Income (the "Double Tax Avoidance Arrangement"), and other applicable mainland Chinese
laws, if a Hong Kong resident enterprise is determined by the competent tax authority in mainland China to have satisfied the relevant
conditions and requirements under such Double Tax Avoidance Arrangement and other applicable laws, the 10% withholding tax on the dividends
the Hong Kong resident enterprise receives from a mainland China resident enterprise may be reduced to 5% upon receiving approval from
in-charge tax authority. However, based on the Notice on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax
Treaties (the "Notice No. 81") issued in February 2009 by the SAT, if the relevant Chinese tax authorities determine, in their
discretion, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven,
such Chinese tax authorities may adjust the preferential tax treatment. Based on Notice of the State Administration of Taxation on How
to Understand and Determine the "Beneficial Owners" in Tax Agreements (the "Notice No. 601"), issued in October
2009 by the SAT, conduit companies, which are established for the purpose of evading or reducing tax, or transferring or accumulating
profits, shall not be recognized as beneficial owners and thus are not entitled to the above-mentioned reduced income tax rate of 5% under
the Double Tax Avoidance Arrangement. In February 2018, SAT issued the Announcement of the State Administration of Taxation on Issues
Relating to "Beneficial Owner" in Tax Treaties, which became effective on April 1 and "the Notice 601" was repealed
simultaneously. The Announcement of the State Administration of Taxation on Issues Relating to "Beneficial Owner" in Tax Treaties
stipulates issues relating to determination of "beneficial owner" status in clauses of tax treaties on dividends, interest
and royalties.
Tax Collection and Payment
The Law of the PRC on the
Administration of Tax Collection (the "Tax Collection Law"), which was promulgated by the Standing Committee of National People's
Congress in September 1992 and last amended in April 2015, prescribes a regulatory framework of tax collection and payment in the PRC
and the Implementation Regulations for the Law of the PRC on Administration of Tax Collection as amended in February 2016 has made further
provisions on the basis of the Tax Collection Law. Pursuant to the Tax Collection Law, a taxpayer or withholding agent shall pay or deliver
tax payments in compliance within the time limit specified by laws or administrative regulations, or as determined by taxation authorities
in accordance with laws or administrative regulations. Where a taxpayer or a withholding agent fails to pay or underpays the amount of
tax that should be paid or remitted within the specified time, the tax authorities shall order the taxpayer or withholding agent to pay
or remit the tax within the specified time limit, and impose a penalty for late payment on a daily basis at the rate of 0.05% of the amount
of tax in arrears from the date the tax payment is defaulted. If the taxpayer or withholding agent still fails to do so on the expiration
of the time limit, the tax authorities may recover such unpaid taxes by adopting compulsory enforcement measures, and impose a fine of
not less than 50% but not more than five times the amount of tax the taxpayer or withholding agent fails to pay or underpays or fails
to remit. As prescribed by the Tax Collection Law, such compulsory enforcement measures adopted by the tax authorities may include (i)
to notify in writing the bank or any other financial institution with which the taxpayer, withholding agent or tax payment guarantor has
opened an account to withhold and remit the taxes from its deposits; (ii) to attach, seal up or, in accordance with law, auction or dispose
of the commodities, goods or other property of the taxpayer, withholding agent or tax payment guarantor, valued equivalent to the taxes
payable, and to use the proceeds therefrom to offset the taxes payable. Furthermore, the taxation authorities shall also announce the
tax payments defaulted by taxpayers regularly.
64
Regulations Relating to Transportation Industry
Pursuant to the Regulations
of the PRC on Road Transport promulgated by the State Council in April 2004 and last amended in March 2019, the permit on the operation
of the road transportation business, issued by the local transportation authority, except otherwise provided by these regulations, is
required for any individual or entity to conduct its road transportation business. The transportation vehicles shall take operation licenses
which are prohibited from being assigned or leased. Under the Regulations of the PRC on Road Transport, a company engaged in the operation
of road transportation without road transportation operation licenses shall be ordered to stop its operation by the administrations of
road transportation at the county level or above; any illegal gains shall be confiscated and the company shall be fined not less than
2 times but not more than 10 times of the amount of the illegal gains; where no illegal gains or the illegal gains is less than RMB 20,000,
the company shall be fined RMB 30,000 to RMB 100,000. The Regulations of the PRC on Road Transport also clarifies that foreign investors
may, in accordance with relevant PRC laws, administrative regulations and relevant state regulations, invest in road transport operations
and road transport related businesses in the territory of the People's Republic of China through Chinese-foreign joint ventures,
Sino-foreign cooperation, and sole proprietorship.
In 2001, the Provisions on
the Administrative of the Foreign-Invested Road Freight Forwarding Industry was promulgated and amended several times, which required
that FIEs, engaging in road goods transport, road goods portage and loading and unloading, road goods storage and other supplementary
services and vehicle maintenance relating to road transport and foreign invested enterprises for the provision of road freight forwarding
services, including the transportation of goods by road, handling, warehousing and other related services, must obtain the Road Freight
Forwarding Operation Permit from the provincial competent departments of communications and these enterprises must satisfy specific qualifications
and conditions. However, the Provisions on the Administrative of the Foreign-Invested Road Freight Forwarding Industry has been revoked
from November 2018 and therefore the business engaged by the Group is no longer regulated by the above provisions.
Pursuant to the Notice of
Guangdong Provincial Department of Transportation on Delegating the Examination and Approval Authority of the Business Road Transportation
of Hong Kong and Macao Enterprises (Yue Jiao Yun [2012] No.1118), the examination and approval authority of the Hong Kong and Macao commercial
road transportation enterprises was delegated to the municipal department of transportation above local level, and the Hong Kong and Macao
enterprises shall obtain the Road Freight Forwarding Operation Permit from the municipal department of transportation above local level.
Regulations Relating to International Freight
Forwarding Agencies
We might be considered as
an international freight forwarding agency for engaging in the air freight business before, even though we have suspended this type of
business for now. According to the Administrative Provisions of the People's Republic of China on International Freight Forwarders
(promulgated in 1995 and revised in 2004), its detailed rules for implementing (promulgated in 2004) and the Tentative Measures on Putting
on Record of International Freight Forwarding Agencies (promulgated in 2005 and revised in 2016), all international freight forwarding
agencies and their branches registered with state industrial and commercial administration in accordance with laws should be filed with
the MOFCOM or the governmental authorities authorized by the MOFCOM. An international freight forwarding agency may accept a commission
to operate part or all of the following businesses, including (i) to book ship's holds and warehouses, (ii) to supervise the loading
and unloading of freight and the assembling and dismantling of containers, (iii) multi-forms of international transportation, (iv) international
express deliveries excluding private letters, (v) to submit customs declarations and undergo customs quarantine and insurance inspections,
(vi) to prepare the related bills and certificates, pay transport charges, settle accounts and miscellaneous fees, and (vii) any other
businesses of an international forwarder. An international freight forwarding agency should conduct its business within its ratified scope.
To engage in the above-mentioned businesses, an international freight forwarding agency must register with relevant competent authorities
as required by the related laws and administrative rules and regulations. International freight forwarding agencies can also be mutually
entrusted to conduct business as stipulated in these regulations. On January 16, 2013, the MOFCOM issued the Guiding Opinions on Accelerating
the Healthy Development of International Freight Forwarding and Logistics Industry, which further provides that the MOFCOM entrusts the
China International Freight Forwarders Association ("CIFA") to oversee the filing of international freight forwarding enterprises.
Accordingly, an international freight forwarding enterprise should complete filings with the CIFA or its branch.
65
Air freight business is also
regulated by the Customs Law of the People's Republic of China (Revised in 2017), the Administrative Provisions of the Customs of
the People's Republic of China on the Registration of Customs Declaration Entities (Revised in 2018), the Law of the People's
Republic of China on Imported and Exported Commodities Inspection (Revised in December 2018) and its Implementing Regulations revised
in 2019. Pursuant to the Customs Law of the People's Republic of China (Revised in 2017) revised by the NPC on April 11, 2017, the
consignor or consignee of the goods exported or imported as well as a customs declaration enterprise must register themselves for declaration
activities at customs in accordance with the law. Anyone who is not registered at the customs shall not conduct declaration activities.
Customs brokers or customs declaration persons shall not make customs declaration illegally on behalf of others or conduct customs declaration
activities beyond their business scope. On April 16, 2018, the General Administration of Customs circulated the Announcement on Matters
relating to the Consolidation of Enterprises' Qualifications for Customs Declaration and Declaration for Inspection and Quarantine
("Announcement 28"), the record-filing for declaration agencies for inspection and quarantine and the registration for customs
declaration enterprises will be consolidated into the registration for customs declaration enterprises. From April 20, 2018, an enterprise
will simultaneously become qualified for the customs declaration and the declaration for inspection and quarantine, once it has registered
itself or filed a record with the customs and the customs will approve and issue the Certificate of the Customs of the People's
Republic of China on Registration of the Customs Declaration Entity and the Registration Form for Declaration Enterprises for Entry-Exit
Inspection and Quarantine affixed with its special seal for registration and record-filing to the registered or recorded enterprise simultaneously.
On October 26, 2018, the General Administration of Customs circulated the Announcement on Matters Related to Promoting the Integration
of Customs Inspection and Optimizing the Registration of Customs Declaration ("Announcement 143"), according to which, from
October 29, 2018, the Certificate of the Customs of the People's Republic of China on Registration of the Customs Declaration Entity
issued by the customs to the customs declaration enterprise that has completed the registration automatically reflects the two qualifications
for customs declaration and the declaration for inspection and quarantine. The original "Registration Form for Declaration Enterprises
for Entry-Exit Inspection and Quarantine" and "Registration Form for Entry-Exit Inspection and Quarantine Reporters"
will no longer be issued. Any enterprises engaged in the business of making customs declarations and making the declaration for inspection
and quarantine as an agent should obtain relevant certificate and make filings for customs declaration persons as prescribed by the foresaid
regulations.
Regulations Relating to Work Safety
Pursuant to the Work Safety
Law of the PRC promulgated by the Standing Committee of National People's Congress in June 2002 and was recently amended in August
2014; road transportation entities shall establish a work safety management office or be staffed with full-time work safety management
personnel. In March 2015, the Ministry of Transportation issued the Notice on Implementing the Work Safe Law, pursuant to which, the relevant
enterprise shall establish and improve the safety production responsibility system covering all aspects of production and operation, clear
standards and responsibility to the post, solidly promote the standardization of production safety and strengthen safety production management.
Regulations Relating to Dividend Distributions
Pursuant the FIL, foreign
investors may, according to the present Law, freely remit into or out of China, in RMB or any other foreign currency, their capital contributions,
profits, capital gains, income from asset disposal, intellectual property royalties, lawfully acquired compensation, indemnity or liquidation
income and so on within the territory of China. In addition, pursuant to the Company Law, a wholly foreign-owned 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 its
cumulative total reserve funds reach 50% of its registered capital. These reserve funds, however, may not be distributed as cash dividends.
Regulations Relating to Foreign Exchange
Circular on Relevant Issues
Concerning Foreign Exchange Control on Domestic Residents' Offshore Investment and Financing and Round-trip Investment Through Special
Purpose Vehicles, or Circular 37, issued by SAFE in and effective July 2014, regulates foreign exchange matters in relation to the use
of special purpose vehicles, or SPVs, by PRC residents or entities to seek offshore investment and financing and conduct round trip investment
in China. Under Circular 37, a SPV refers to an offshore entity established or controlled, directly or indirectly, by PRC residents or
entities for the purpose of seeking offshore financing or making offshore investment, using legitimate domestic or offshore assets or
interests, while "round trip investment" refers to the direct investment in China by PRC residents or entities through SPVs,
namely, establishing FIEs to obtain the ownership, control rights and management rights. Circular 37 requires that, before making contribution
into an SPV, PRC residents or entities are required to complete foreign exchange registration with SAFE or its local branch. Circular
37 further provides that option or share-based incentive tool holders of a non-listed SPV can exercise the options or share incentive
tools to become a shareholder of such non-listed SPV, subject to registration with SAFE or its local branch.
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PRC residents or entities
which have contributed legitimate domestic or offshore interests or assets to SPVs but have yet to obtain SAFE registration before the
implementation of the Circular 37 shall register their ownership interests or control in such SPVs with SAFE or its local branch. An amendment
to the registration is required if there is a material change in the registered SPV, such as any change of basic information (including
change of such PRC resident's name and operation term), increases or decreases in investment amounts, transfers or exchanges of
shares, or mergers or divisions. Failure to comply with the registration procedures set forth in Circular 37, or making misrepresentation
or failure to disclose controllers of FIE that is established through round-trip investment, may result in restrictions on the foreign
exchange activities of the relevant FIEs, including payment of dividends and other distributions, such as proceeds from any reduction
in capital, share transfer or liquidation, to its offshore parent or affiliate, and the capital inflow from the offshore parent, and may
also subject relevant PRC residents or entities to penalties under PRC foreign exchange administration regulations. In February 2015,
SAFE further promulgated the Circular on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct
Investment, or SAFE Circular 13, effective from June 2015 and partially repealed on December 30, 2019. 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. Circular 37
is applicable to our shareholders who are PRC residents and may be applicable to any offshore acquisitions that we make in the future.
All of our shareholders who, to our knowledge, are subject to the above SAFE regulations have completed the necessary registrations with
the local SAFE branch or qualified banks as required by SAFE Circular 37.
In March 2015, SAFE promulgated
the Circular on Reforming the Administration Approach of Foreign Exchange Settlement of Capital of Foreign-invested Enterprises, or Circular
19, effective from June 2015 and partially repealed on December 30, 2019. According to Circular 19, the foreign exchange capital of FIEs
shall be subject to the Discretionary Foreign Exchange Settlement. The Discretionary Foreign Exchange Settlement refers to the foreign
exchange capital in the capital account of an FIE for which the rights and interests of monetary contribution has been confirmed by the
local foreign exchange bureau (or the book-entry registration of monetary contribution by the banks) can be settled at the banks based
on the actual operational needs of the FIE. The proportion of Discretionary Foreign Exchange Settlement of the foreign exchange capital
of an FIE is temporarily determined to be 100%. The Renminbi converted from the foreign exchange capital will be kept in a designated
account and if an FIE needs to make further payment from such account, it still needs to provide supporting documents and go through the
review process with the banks.
SAFE issued the Circular on
Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or Circular 16, in June 2016, which
became effective simultaneously. Pursuant to Circular 16, enterprises registered in the PRC may also convert their foreign debts from
foreign currency to Renminbi on a discretionary basis. Circular 16 provides an integrated standard for conversion of foreign exchange
under capital account items (including but not limited to foreign currency capital and foreign debts) on a discretionary basis which applies
to all enterprises registered in the PRC. Circular 16 reiterates the principle that Renminbi converted from foreign currency-denominated
capital of a company may not be directly or indirectly used for purposes beyond its business scope or prohibited by PRC laws or regulations,
while such converted Renminbi shall not be provided as loans to its non-affiliated entities. As Circular 16 is newly issued, and SAFE
has not provided detailed guidelines with respect to its interpretation or implementations, it is uncertain how these rules will be interpreted
and implemented.
On January 26, 2017, SAFE
promulgated the Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Authenticity and Compliance Verification,
or Circular 3, which took effect on the same day. Circular 3 sets out various measures to tighten authenticity and compliance verification
of cross-border transactions and cross-border capital flow, which include without limitation requiring banks to verify board resolutions,
tax filing form, and audited financial statements before wiring foreign invested enterprises' foreign exchange distribution above
US$50,000, and strengthening genuineness and compliance verification of foreign direct investments.
In November 2012, SAFE issued
the Circular of Further Improving and Adjusting Foreign Exchange Administration Policies on Foreign Direct Investment, as amended in May
2015 and October 2018 and partially repealed on December 30, 2019, respectively, foreign exchange control methods for direct investments
has been improved through cancelling and adjusting certain administrative licensing items for foreign exchange control for direct investments.
Approval formalities for account opening and deposit for foreign currency accounts under direct investments and approval formalities for
reinvestment of domestic legitimate income of foreign investors have been cancelled. Administration for conversion of foreign currency
capital into Renminbi by foreign investment enterprises has also been improved.
Our PRC subsidiaries'
distributions to their offshore parents are required to comply with the requirements as described above.
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Regulations Relating to Funds Transfer to PRC
Subsidiaries
We are permitted under PRC
laws and regulations as an offshore holding company to provide funding to our PRC subsidiaries through loans or capital contributions,
subject to satisfaction of applicable government registration, approval and filing requirements.
In the event of subsequent
changes in the capital of the FIE such as increase in capital, such FIE shall complete change filing formalities with competent administrations
for market regulation in accordance with relevant regulations, and registration change formalities shall also be completed with the competent
administration of foreign exchange according to the Provisions on Foreign Exchange Control on Direct Investments in China by Foreign Investors.
In addition, pursuant to Circular 16, foreign invested enterprise shall use its capital pursuant to the principle of authenticity and
self-use within its business scope. The capital of a foreign invested enterprise 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).
Pursuant to the Provisional
Measures on Administration of Foreign Debt (the "Foreign Debt Measures") issued by the State Development Planning Commission
(revised), Ministry of Finance and SAFE in January 2003 and became effective on March 1, 2003, any loans provided by us to our PRC subsidiaries
in foreign currencies shall be classified as foreign debt under the Foreign Debt Measures. According to the Foreign Debt Measures, the
sum of cumulative accrued amounts of medium-term to long-term foreign loans and balance amounts of short-term foreign loans taken by a
foreign investment enterprise shall be limited to the difference between the total project investment amount approved by the government
and the amount of registered capital. Foreign investment enterprises may take foreign loans freely within the scope of difference.
On January 12, 2017, the PBOC
issued the Notice of People's Bank of China on Matters Concerning Macro-Prudential Management on All-round Cross-border Financing
(the "No.9 Notice"), which improved the policy framework of the cross-border financing. The No.9 Notice clarifies the new
calculation methods of the upper limit of the risk-weighted balance for all types of cross-border financing, in particular, the upper
limit for risk-weighted balance for cross-border financing equals to the capital or the net assets multiplied by the leverage rate of
cross-border financing and the macro-prudential adjustment parameters. In the case of our PRC subsidiaries, the capital or the net assets
is calculated at the net assets of each subsidiary, the leverage rate for cross-border financing for an enterprise is 2, and the macro-prudential
adjustment parameter is 1 (the "All-Round Mode"). On March 11, 2020, the PBOC and SAFE promulgated the Circular of the People's
Bank of China and the State Administration of Foreign Exchange on Adjusting the Macro-prudential Regulation Parameter for Full-covered
Cross-border Financing, which provides that based on the current macro economy and international balance of payments, the macro-prudential
regulation parameter as set forth in the Notice 9 is updated from 1 to 1.25. Currently, the implementation of the foregoing methodologies
in cross-border financing have not been formally determined by the PBOC and the SAFE. In the practice, according to the SAFE Shenzhen
Branch, which is the competent local SAFE authority for our PRC subsidiaries, FIEs may choose between the Investment Difference Mode and
the All-round Mode, but the enterprise cannot change the methodology once it makes the choice and the enterprise may be required to submit
different materials for these two methodologies. Based on the current registered capital and total project investment amount, if we would
provide funding to our PRC subsidiaries through loans and use the Investment Difference Mode, our PRC subsidiaries will be required to
increase its registered capital and total project investment amount. Alternatively, if we choose to use the All-Round Mode, the amount
of loans we can make to our PRC subsidiaries as calculated according to the No.9 Notice will not be more than 2.5 times of the net assets
of such entities.
Moreover, as the debtors of
cross-border financing, our PRC subsidiaries are also required to comply with certain registration formalities for execution of foreign
debt contracts with the foreign exchange bureau at the locality within fifteen working days after signing the contracts according to the
Notice of State Administration of Foreign Exchange on Promulgation of the Administrative Measures on Registration of Foreign Debt which
was promulgated by the SAFE in April 2013 and revised in May 2015.
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Pursuant to the Circular of
the National Development and Reform Commission on Promoting the Administrative Reform of the Record-filing and Registration System for
the Issuance of Foreign Debts by Enterprises promulgated on September 14, 2015 ("Circular 2044"), before the issuance of foreign
loans, enterprises shall first apply to the NDRC for record-filing and registration procedures and shall report the information on the
issuance to NDRC within 10 business days after completion of each issuance. The term "foreign loan" shall mean RMB-denominated
or foreign currency-denominated debt instruments with a maturity of one year or more which are issued overseas by domestic enterprises
and their controlled overseas enterprises or branches and for which the principal and interest are repaid as agreed, including bonds issued
overseas and long- and medium-term international commercial loans, and so forth. In February 2020, the NDRC circulated the Guide to the
Registration of Foreign Debt Issued by Enterprises on its official website, according to which, domestic companies (and their controlled
overseas companies or branches) who borrowed from foreign companies (including overseas shareholders) a loan for more than one year need
to apply to the NDRC. However, the NDRC has not issued any other further explanation for the implementation of the Circular 2044. In the
practice, the NDRC's attitude on whether foreign-invested enterprises with foreign loans with a term of more than one year need
to register is still not completely unified, and it is generally determined on a case-by-case basis.
Insurance and Social Security Matters
We maintain automobile insurance
policies against loss or damage to our vehicles, drivers and third parties arising in the course of the delivery and policies against
damages and losses of cargo during the provision of trucking services. We currently do not have any business liability or disruption insurance.
We also participate in various government statutory social security plans, including a pension contribution plan, a medical insurance
plan, an unemployment insurance plan, a work-related injury insurance plan, a maternity insurance plan and a housing provident fund.
Our insurance coverage complies
with the requirements of our existing customers. We believe that such coverage is in line with industry norms in the PRC and is adequate
and sufficient for our current operations.
4.C. Organizational Structure
Our Subsidiaries and VIEs
The Company was incorporated
on January 2, 2018 as an exempted company structured as a holding company incorporated under the laws of Cayman Islands. Immediately prior
to our initial public offering completed on October 20, 2020, we were owned by three entities and one individual: (i) Alpha Global (BVI)
Limited, a company formed under the laws of the British Virgin Islands and wholly-owned by Jinlong Yang, our Chairman and Chief Executive
Officer; (ii) Excelsior Investment Limited (Hong Kong), a company formed under the laws of Hong Kong and wholly-owned by Gui Ling Guo,
a director and the Vice Chair of the board of directors of MingZhu and (iii) Exquisite Elite Limited (BVI), a company formed under the
laws of the British Virgin Islands, with 86% of its equity interest owned by Zhuo Wang, our director. We began our operations in China
in 2002 and currently conduct our business through our subsidiaries and VIEs.
We currently have 11 wholly-owned
subsidiaries, including MingZhu BVI, MingZhu HK, a limited liability company formed under the laws of Hong Kong, Cheyi BVI, Yinhua, Cheyi
(Hong Kong) Limited, Yinhua (HK) Limited, and five operating subsidiaries, including MingZhu. Our five operating subsidiaries are companies
formed under the laws of the PRC. Cheyi Network and Zhisheng are VIEs of us in the PRC. In 2002, we formed MingZhu to primarily engage
in the business of transportation services. We also established MingZhu Pengcheng in 2010 under the laws of the PRC to engage in the business
of trucking services. Through MingZhu BVI and MingZhu HK, we own 100% of the equity interest of MingZhu Management, which is engaged in
the business of transportation and supply chain management services.
A reorganization of our legal
structure was completed in April 2018. On April 13, 2018, the former shareholders transferred their 100% ownership interest in MingZhu
to MingZhu HK, which is 100% owned by the Company through MingZhu BVI. In consideration of such transfer, the Company issued 1,000 ordinary
shares to the former shareholders of MingZhu. After the reorganization, the Company owns 100% equity interests of MingZhu BVI, MingZhu
HK and MingZhu. The controlling shareholder of the Company is same as that of MingZhu prior to the reorganization. On December 31, 2021
the Company acquired 100% shares outstanding of Cheyi BVI. On March 18, 2022, the Company acquired 100% shares outstanding of Yinhua.
We operate our VATs business
mainly through the VIEs in the PRC, based on a series of contractual arrangements (collectively the "VIE Agreements"). As
a result of these contractual arrangements, we are considered the primary beneficiary of the VIEs for accounting purposes and consolidate
their operating results in our financial statements under U.S. GAAP. Such a contractual relationship is not identical to owning such entities
directly, and investors will own shares in a holding company with contracts with the VIEs and will not have any equity ownership of the
VIEs themselves. The investors have purchased securities in the Company and the Company's operations are conducted by its subsidies
and VIEs. Neither the investors in the holding company nor the holding company itself have an equity ownership in, direct foreign investment
in, or control of, through such ownership or investment, the VIEs.
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The VIE Agreements may not
be as effective as direct ownership in providing us with control over the VIEs. Direct ownership would allow us, for example, to directly
or indirectly exercise our rights as a shareholder to effect changes in the boards of directors of the VIEs, which, in turn, could affect
changes, subject to any applicable fiduciary obligations at the management level. However, under the VIE Agreements, as a legal matter,
if the VIEs or its shareholders fail to perform their respective obligations under the VIE Agreements, we may have to incur substantial
costs and expend significant resources to enforce those arrangements and resort to litigation or arbitration and rely on legal remedies
under PRC laws. These remedies may include seeking specific performance or injunctive relief and claiming damages, any of which may not
be effective. In the event we are unable to enforce these VIE Agreements or we experience significant delays or other obstacles in the
process of enforcing these VIE Agreements, we may not be able to exert effective control over the VIEs and may lose control over the assets
owned by the VIEs. As a result, we may be unable to consolidate the VIEs in our consolidated financial statements, which could materially
and adversely affect our financial condition and results of operations.
Furthermore, all of these
VIE Agreements are governed by PRC law and provide for the resolution of disputes through arbitration in the PRC, and such VIE Agreements
have not been tested in a court of law. The legal environment in the PRC is not as developed as in some other jurisdictions. As a result,
uncertainties in the PRC legal system could limit our ability to enforce these VIE Agreements. In the event we are unable to enforce these
VIE Agreements, we may not be able to exert effective control over the VIEs and we may be precluded from operating our business, which
would have a material adverse effect on our financial condition and results of operations.
In addition, there is uncertainty
as to whether the courts of the Cayman Islands or the PRC would recognize or enforce judgments of U.S. courts against us or such persons
predicated upon the civil liability provisions of the securities laws of the United States or any state. Accordingly, it is uncertain
whether we would be able to enforce the VIE Agreements in a court of law in China, either in in an action directly in China or in seeking
to enforce a foreign judgment in China. The costs of seeking to enforce such VIE Agreements could be substantial, and the outcome of such
litigation might not result in us enforcing such VIE Agreements. If such VIE Agreements were not enforced, investors could see the value
of their shares decrease in value or become worthless. Because we do not directly hold equity interests in the VIEs, we are subject to
risks due to uncertainty of the interpretation and the application of the PRC laws and regulations, including, but not limited to, regulatory
review of overseas listing of PRC companies through a special purpose vehicle, and the validity and enforcement of the VIE Agreements.
We are also subject to the
risks of uncertainty about any future actions of the PRC government in this regard that could disallow the VIE structure, which would
likely result in a material change in our operations and a complete hindrance of our ability to offer or continue to offer our securities
to investors and the value of our shares may depreciate significantly or become worthless.
Cheyi BVI
The Cheyi BVI, which is acquired
by the Company on December 29, 2021, operates business mainly through its variable interest entities ("VIE") in the PRC, based
on a series of contractual arrangements (collectively the "VIE Agreements"). As a result of the VIE Agreements that our Ningbo
Cheyi Corporate Information Consulting Co., Ltd. ("Cheyi WFOE") entered with Zhejiang Cheyi Network Technology Co., Ltd. ("Cheyi
Network"), and its shareholders, the control and benefits of Cheyi Network were accrued to us subject to the conditions that we
have satisfied for consolidation of Cheyi Network and its subsidiaries under U.S. GAAP. Such conditions include that (i) we control Cheyi
Network through power to govern the activities which most significantly impact Cheyi Network's economic performance, (ii) we are
contractually obligated to absorb losses of Cheyi Network that could potentially be significant to Cheyi Network, and (iii) we are entitled
to receive benefits from Cheyi Network that could potentially be significant to Cheyi Network. We are regarded as the primary beneficiary
of Cheyi Network and its subsidiaries, and Cheyi Network and its subsidiaries are treated as our consolidated affiliated entity under
U.S. GAAP. We have consolidated the financial results of Cheyi Network and its subsidiaries in our consolidated financial statements for
accounting purposes in accordance with U.S. GAAP.
The following is a summary
of VIE Agreements by and among Cheyi Network, a subsidiary of Cheyi BVI, Cheyi WFOE and the shareholders of Cheyi BVI. Each of the VIE
Agreements is described in detail below:
Master Exclusive Service
Agreement
Under the Master Exclusive
Service Agreement dated November 24, 2021, Cheyi WFOE has agreed to provide the following services (among others) to Cheyi Network:
●
information consulting services regarding the business operation of Service Receiving Parties;
●
public relation services;
70
●
market investigation, research and consulting services;
●
Leasing, assignment or disposal of properties;
●
recruiting, managing and training of necessary personnel to sustain the business operation;
●
marketing channel to cooperate with business-relating third-party platforms;
●
customer order management and customer services;
●
mid or short-term market development and market planning services;
●
human resource management and internal information management;
●
Design, installation, daily management, maintenance and updating of network system, hardware and database design, and/or other services determined from time to time by Cheyi Network according to the need of business and capacity of the Cheyi WFOE.
This agreement was effective
from November 24, 2021 and will continue to be effective unless it is terminated by written notice of Cheyi Network.
Business Cooperation Agreement
Under the Exclusive Option
Agreement entered into by Cheyi WFOE, Cheyi Network and the shareholders of Cheyi Network, dated November 24, 2021, all parties agreed
that without obtaining Cheyi WFOE 's prior written consent, Cheyi Network shall not, and each of the Cheyi Network and shareholders
of Cheyi Network shall cause each of Cheyi Network and its subsidiaries not to, engage in any transaction which may materially affect
its asset obligation right or operation. Furthermore, Cheyi Network shall and shareholders of Cheyi Network shall cause Cheyi Network
and its subsidiaries to accept suggestions raised by Cheyi WFOE over the employee engagement and replacement, daily operation, dividend
distribution and financial management systems of Cheyi Network and its subsidiaries and Cheyi Network and its subsidiaries shall strictly
abide by and perform accordingly.
Equity Interest Pledge
Agreement
The shareholders of Cheyi
Network entered into an Equity Pledge Interest Agreement with Cheyi WFOE, dated November 24, 2021. Under such equity pledge agreement,
each of the shareholders of Cheyi Network pledged its respective equity interest in Cheyi Network to Cheyi WFOE to secure such shareholder's
obligations under the Exclusive Option Agreement, Proxy Agreement, Master Exclusive Service Agreement, and Letter of Confirmation and
Undertaking.
Each of such shareholders
further agreed not to transfer or pledge his or her respective equity interest in Cheyi Network without the prior written consent of Cheyi
WFOE. The equity pledge agreement will remain effective until the shareholders fulfill their obligations and Cheyi WFOE discharges all
the shareholders' obligations under these VIE Agreements in writing.
Exclusive Option Agreement
Under the Exclusive Option
Agreement entered into by Cheyi WFOE, Cheyi Network and the shareholders of Cheyi Network, dated November 24, 2021, the shareholders of
Cheyi Network granted Cheyi WFOE or its designee an option to purchase all or a portion of their respective equity interest in Cheyi Network
or the RMB 1.
Each of shareholders of Cheyi
Network agreed that, as of the effective date of this agreement, but before the transfer of all or part of the Cheyi Network's equity
interest to Cheyi WFOE, if the shareholders obtain dividends, bonuses or residual property from Cheyi Network, the shareholders shall
transfer all the income (after tax) to Cheyi WFOE.
The exclusive option agreement
shall remain in effect until all of the equity interests in or assets of Cheyi Network have been acquired by Cheyi WFOE or its designee,
and upon the condition that Cheyi WFOE and its subsidiaries, branches can engage in the business of Cheyi Network legally.
Cheyi WFOE has the right to
unilaterally terminate this agreement immediately by sending written notices to Cheyi Network and the shareholders of Cheyi Network at
any time without liability for the breach. Unless otherwise mandatory by Chinese law, Cheyi Network and its shareholders has no right
to unilaterally terminate this agreement.
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Proxy Agreement
Under the Proxy Agreement
among Cheyi WFOE, Cheyi Network and the shareholders of Cheyi Network, dated November 24, 2021, each of the shareholders of Cheyi Network
has agreed to irrevocably entrust Cheyi WFOE or its designee to represent it to exercise all the shareholders' rights to which it
is entitled as a shareholder of Cheyi Network.
The Proxy Agreement is irrevocable
and shall remain effective until upon the instruction of Cheyi WFOE.
Letter of Confirmation
and Undertaking
Each shareholder of Cheyi
Network had signed a Letter of Confirmation and Undertaking. Under the Letter of Confirmation and Undertaking, each shareholder of Cheyi
Network confirmed undertake and warrant that his or her successor, guardian, creditor, spouse or any other person that may be entitled
to assume rights and interests in the equity interest of Cheyi Network held by him or her upon his or her death incapacity, divorce or
any circumstances that may affect his or her ability to exercise rights of shareholder in Cheyi Network will not, in any manner and under
any circumstances, take any action that may affect or hinder the fulfillment of his or her obligations under each of the Master Exclusive
Service Agreement, the Business Cooperation Agreement, the Proxy Agreement, the Exclusive Option Agreement, and the Equity Interest Pledge
Agreement executed by him or her on November 24, 2021.
Yinhua
The Yinhua, which is acquired
by the Company on March 14, 2022, operates business mainly through its variable interest entities ("VIE") in the PRC, based
on a series of contractual arrangements (collectively the "VIE Agreements"). As a result of the VIE Agreements that our Zhejiang
Caiyunlian Technology Co., Ltd. ("Yinhua WFOE") entered with Hainan Zhisheng Car Services Co., Ltd. ("Zhisheng"),
and its shareholders, the control and benefits of Zhisheng were accrued to us subject to the conditions that we have satisfied for consolidation
of Zhisheng under U.S. GAAP. Such conditions include that (i) we control Zhisheng through power to govern the activities which most significantly
impact Zhisheng's economic performance, (ii) we are contractually obligated to absorb losses of Zhisheng that could potentially
be significant to Zhisheng, and (iii) we are entitled to receive benefits from Cheyi Network that could potentially be significant to
Zhisheng. We are regarded as the primary beneficiary of Zhisheng, and Zhisheng is treated as our consolidated affiliated entity under
U.S. GAAP. We have consolidated the financial results of Zhisheng in our consolidated financial statements for accounting purposes in
accordance with U.S. GAAP.
The following is a summary
of VIE Agreements by and among Zhisheng, a subsidiary of Yinhua, Yinhua WFOE and the shareholders of Yinhua. Each of the VIE Agreements
is described in detail below:
Master Exclusive Service
Agreement
Under the Master Exclusive
Service Agreement dated January 22, 2022, Yinhua WFOE has agreed to provide the following services (among others) to Zhisheng:
●
information consulting services regarding the business operation of Service Receiving Parties;
●
public relation services;
●
market investigation, research and consulting services;
●
Leasing, assignment or disposal of properties;
●
recruiting, managing and training of necessary personnel to sustain the business operation;
●
marketing channel to cooperate with business-relating third-party platforms;
●
customer order management and customer services;
●
mid or short-term market development and market planning services;
●
human resource management and internal information management;
●
Design, installation, daily management, maintenance and updating of network system, hardware and database design, and/or other services determined from time to time by Zhisheng according to the need of business and capacity of the Yinhua WFOE.
This agreement was effective
from January 22, 2022 and will continue to be effective unless it is terminated by written notice of Zhisheng.
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Business Cooperation Agreement
Under the Exclusive Option
Agreement entered into by Yinhua WFOE, Zhisheng and the shareholders of Zhisheng, dated January 22, 2022, all parties agreed that without
obtaining Yinhua WFOE 's prior written consent, Zhisheng shall not, and each of the Zhisheng and shareholders of Zhisheng shall
cause each of Zhisheng and its subsidiaries not to, engage in any transaction which may materially affect its asset obligation right or
operation. Furthermore, Zhisheng shall and shareholders of Zhisheng shall cause Zhisheng and its subsidiaries to accept suggestions raised
by Yinhua WFOE over the employee engagement and replacement, daily operation, dividend distribution and financial management systems of
Zhisheng and its subsidiaries and Zhisheng and its subsidiaries shall strictly abide by and perform accordingly.
Equity Interest Pledge
Agreement
The shareholders of Zhisheng
entered into an Equity Pledge Interest Agreement with Yinhua WFOE, dated January 22, 2022. Under such equity pledge agreement, each of
the shareholders of Zhisheng pledged its respective equity interest in Zhisheng to Yinhua WFOE to secure such shareholder's obligations
under the Exclusive Option Agreement, Proxy Agreement, Master Exclusive Service Agreement, and Letter of Confirmation and Undertaking.
Each of such shareholders
further agreed not to transfer or pledge his or her respective equity interest in Zhisheng without the prior written consent of Yinhua
WFOE. The equity pledge agreement will remain effective until the shareholders fulfill their obligations and Yinhua WFOE discharges all
the shareholders' obligations under these VIE Agreements in writing.
Exclusive Option Agreement
Under the Exclusive Option
Agreement entered into by Yinhua WFOE, Zhisheng and the shareholders of Zhisheng, dated January 22, 2022, the shareholders of Zhisheng
granted Yinhua WFOE or its designee an option to purchase all or a portion of their respective equity interest in Zhisheng for the RMB
1.
Each of shareholders of Zhisheng
agreed that, as of the effective date of this agreement, but before the transfer of all or part of the Zhisheng's equity interest
to Yinhua WFOE, if the shareholders obtain dividends, bonuses or residual property from Zhisheng, the shareholders shall transfer all
the income (after tax) to Yinhua WFOE.
The exclusive option agreement
shall remain in effect until all of the equity interests in or assets of Zhisheng have been acquired by Yinhua WFOE or its designee, and
upon the condition that Yinhua WFOE and its subsidiaries, branches can engage in the business of Zhisheng legally.
Yinhua WFOE has the right
to unilaterally terminate this agreement immediately by sending written notices to Zhisheng and the shareholders of Zhisheng at any time
without liability for the breach. Unless otherwise mandatory by Chinese law, Zhisheng and its shareholders has no right to unilaterally
terminate this agreement.
Proxy Agreement
Under the Proxy Agreement
among Yinhua WFOE, Zhisheng and the shareholders of Zhisheng, dated January 22, 2022, each of the shareholders of Zhisheng has agreed
to irrevocably entrust Yinhua WFOE or its designee to represent it to exercise all the shareholders' rights to which it is entitled
as a shareholder of Zhisheng.
The Proxy Agreement is irrevocable
and shall remain effective until upon the instruction of Yinhua WFOE.
Letter of Confirmation
and Undertaking
Each shareholder of Zhisheng
had signed a Letter of Confirmation and Undertaking. Under the Letter of Confirmation and Undertaking, each shareholder of Zhisheng confirmed
undertake and warrant that his or her successor, guardian, creditor, spouse or any other person that may be entitled to assume rights
and interests in the equity interest of Zhisheng held by him or her upon his or her death incapacity, divorce or any circumstances that
may affect his or her ability to exercise rights of shareholder in Zhisheng will not, in any manner and under any circumstances, take
any action that may affect or hinder the fulfillment of his or her obligations under each of the Master Exclusive Service Agreement, the
Business Cooperation Agreement, the Proxy Agreement, the Exclusive Option Agreement, and the Equity Interest Pledge Agreement executed
by him or her on January 22, 2022.
Consent Letter
Each spouse of shareholder
of Zhisheng had signed a Consent letter. Under Consent Letter, each spouse of shareholder of Zhisheng confirm and agree that the equity
interest in the Zhisheng held by each shareholder of Zhisheng is her or his individual property not the joint property, which each shareholder
of Zhisheng is entitled to dispose of on her or his own.
73
Feipeng BVI
The Feipeng BVI, which is
acquired by the Company on December 21, 2022, operates business mainly through its variable interest entities ("VIE") in the
PRC, based on a series of contractual arrangements (collectively the "VIE Agreements"). As a result of the VIE Agreements
that our Shenzhen Feipeng Zongheng Supply Chain Management Co., Ltd. ("Feipeng WFOE") entered with Xinjiang Feipeng Logistics
Co., Ltd. ("Feipeng"), and its shareholders, the control and benefits of Feipeng were accrued to us subject to the conditions
that we have satisfied for consolidation of Feipeng under U.S. GAAP. Such conditions include that (i) we control Feipeng through power
to govern the activities which most significantly impact Feipeng's economic performance, (ii) we are contractually obligated to
absorb losses of Feipeng that could potentially be significant to Feipeng, and (iii) we are entitled to receive benefits from Feipeng
that could potentially be significant to Feipeng. We are regarded as the primary beneficiary of Feipeng, and Feipeng is treated as our
consolidated affiliated entity under U.S. GAAP. We have consolidated the financial results of Feipeng in our consolidated financial statements
for accounting purposes in accordance with U.S. GAAP.
The following is a summary
of VIE Agreements by and among Feipeng, a subsidiary of Feipeng BVI, Feipeng WFOE and the shareholders of Feipeng BVI. Each of the VIE
Agreements is described in detail below:
Master Exclusive Service
Agreement
Under the Master Exclusive
Service Agreement dated December 20, 2022, Feipeng WFOE has agreed to provide the following services (among others) to Feipeng:
●
information consulting services regarding the business operation of Service Receiving Parties;
●
public relation services;
●
market investigation, research and consulting services;
●
Leasing, assignment or disposal of properties;
●
recruiting, managing and training of necessary personnel to sustain the business operation;
●
marketing channel to cooperate with business-relating third-party platforms;
●
customer order management and customer services;
●
mid or short-term market development and market planning services;
●
human resource management and internal information management;
●
Design, installation, daily management, maintenance and updating of network system, hardware and database design, and/or other services determined from time to time by Feipeng according to the need of business and capacity of the Feipeng WFOE.
This agreement was effective
from December 20, 2022 and will continue to be effective unless it is terminated by written notice of Feipeng.
Business Cooperation Agreement
Under the Exclusive Option
Agreement entered into by Feipeng WFOE, Feipeng and the shareholders of Feipeng, dated December 20, 2022, all parties agreed that without
obtaining Feipeng WFOE 's prior written consent, Feipeng shall not, and each of the Feipeng and shareholders of Feipeng shall cause
each of Feipeng and its subsidiaries not to, engage in any transaction which may materially affect its asset obligation right or operation.
Furthermore, Feipeng shall and shareholders of Feipeng shall cause Feipeng and its subsidiaries to accept suggestions raised by Feipeng
WFOE over the employee engagement and replacement, daily operation, dividend distribution and financial management systems of Feipeng
and its subsidiaries and Feipeng and its subsidiaries shall strictly abide by and perform accordingly.
74
Equity Interest Pledge
Agreement
The shareholders of Feipeng
entered into an Equity Pledge Interest Agreement with Feipeng WFOE, dated December 20, 2022. Under such equity pledge agreement, each
of the shareholders of Feipeng pledged its respective equity interest in Feipeng to Feipeng WFOE to secure such shareholder's obligations
under the Exclusive Option Agreement, Proxy Agreement, Master Exclusive Service Agreement, and Letter of Confirmation and Undertaking.
Each of such shareholders
further agreed not to transfer or pledge his or her respective equity interest in Feipeng without the prior written consent of Feipeng
WFOE. The equity pledge agreement will remain effective until the shareholders fulfill their obligations and Feipeng WFOE discharges all
the shareholders' obligations under these VIE Agreements in writing.
Exclusive Option Agreement
Under the Exclusive Option
Agreement entered into by Feipeng WFOE, Feipeng and the shareholders of Feipeng, dated December 20, 2022, the shareholders of Feipeng
granted Feipeng WFOE or its designee an option to purchase all or a portion of their respective equity interest in Feipeng for the RMB
1.
Each of shareholders of Feipeng
agreed that, as of the effective date of this agreement, but before the transfer of all or part of the Feipeng's equity interest
to Feipeng WFOE, if the shareholders obtain dividends, bonuses or residual property from Feipeng, the shareholders shall transfer all
the income (after tax) to Feipeng WFOE.
The exclusive option agreement
shall remain in effect until all of the equity interests in or assets of Feipeng have been acquired by Feipeng WFOE or its designee, and
upon the condition that Feipeng WFOE and its subsidiaries, branches can engage in the business of Feipeng legally.
Feipeng WFOE has the right
to unilaterally terminate this agreement immediately by sending written notices to Feipeng and the shareholders of Feipeng at any time
without liability for the breach. Unless otherwise mandatory by Chinese law, Feipeng and its shareholders has no right to unilaterally
terminate this agreement.
Proxy Agreement
Under the Proxy Agreement
among Feipeng WFOE, Feipeng and the shareholders of Feipeng, dated December 20, 2022, each of the shareholders of Feipeng has agreed to
irrevocably entrust Feipeng WFOE or its designee to represent it to exercise all the shareholders' rights to which it is entitled
as a shareholder of Feipeng.
The Proxy Agreement is irrevocable
and shall remain effective until upon the instruction of Feipeng WFOE.
Letter of Confirmation
and Undertaking
Each shareholder of Feipeng
had signed a Letter of Confirmation and Undertaking. Under the Letter of Confirmation and Undertaking, each shareholder of Feipeng confirmed
undertake and warrant that his or her successor, guardian, creditor, spouse or any other person that may be entitled to assume rights
and interests in the equity interest of Feipeng held by him or her upon his or her death incapacity, divorce or any circumstances that
may affect his or her ability to exercise rights of shareholder in Feipeng will not, in any manner and under any circumstances, take any
action that may affect or hinder the fulfillment of his or her obligations under each of the Master Exclusive Service Agreement, the Business
Cooperation Agreement, the Proxy Agreement, the Exclusive Option Agreement, and the Equity Interest Pledge Agreement executed by him or
her on December 20, 2022.
Consent Letter
Each spouse of shareholder
of Feipeng had signed a Consent letter. Under Consent Letter, each spouse of shareholder of Feipeng confirm and agree that the equity
interest in the Feipeng held by each shareholder of Feipeng is her or his individual property not the joint property, which each shareholder
of Feipeng is entitled to dispose of on her or his own.
75
Organizational Structure Chart
The following diagram illustrates
our corporate structure as of the date of this annual report, including our subsidiaries and VIEs.
The investors have purchased securities in the
Company and the Company's operations are conducted by its subsidies and VIEs. Cheyi WFOE, Yinhua WFOE and Feipeng WFOE are wholly
foreign-owned entities who receive the economic benefits of the VIEs' business operation.
4D. Property, Plants and Equipment
Our principal executive office
is located at 27F, Yantian Modern Industry Service Center No. 3018 Shayan Road, Yantian District Shenzhen, Guangdong People's Republic
of China, which has approximately 2,000 square meters of office space. We believe that our current offices are suitable and adequate to
operate our business at this time. We do not own any real property.
ITEM 4A. UNRESOLVED STAFF COMMENTS
Not Applicable.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following discussion
and analysis should be read in conjunction with our consolidated financial statements, the notes to those financial statements and other
financial data that appear elsewhere in this annual report. In addition to historical information, the following discussion contains forward-looking
statements based on current expectations that involve risks and uncertainties. Actual results and the timing of certain events may differ
significantly from those projected in such forward-looking statements due to a number of factors, including those set forth in "Risk
Factors" and elsewhere in this report. Our consolidated financial statements are prepared in conformity with U.S. generally accepted
accounting principles ("U.S. GAAP").
5.A. Operating Results
Overview
General
The Company is not an operating
company a Cayman Islands holding company with its operations conducted through its subsidiaries in the PRC (the "Subsidiaries")
and through contractual arrangements with its variable interest entity (the "VIEs"). We engaged in a number of diverse business
activities, including trucking services, car-hailing and driver management services, and car owner services.
76
The following tables present
selected condensed consolidated financial data of the Company and its subsidiaries and VIEs, separately, for the years ended December
31, 2022, 2021 and 2020, and balance sheet data as of December 31, 2022 and 2021, which have been derived from our audited consolidated
financial statements for those periods. MingZhu records its investments in its subsidiaries under the equity method of accounting. Such
investments are presented in the selected condensed consolidated balance sheets of the Company as "Investment in subsidiaries and
VIEs" and the profit of the subsidiaries is presented as "(Loss) Income of Subsidiaries" in the selected condensed consolidated
statements of income and comprehensive income.
Names shown in the following tables
Entities
Business activities
The Company
Mingzhu Logistics Holdings Limited
Investment holdings
WFOE
Ningbo Cheyi Corporate Information Consulting Co., Ltd, Zhqiang Caiyunlian Technology Co. Ltd. and Shenzhen Feipeng Zongheng Supply Chain Management Co., Ltd.
Investment holdings
Directly owned PRC subsidiaries
Combined and consolidated financial results of Shenzhen Yangang Mingzhu Freight Industry Co., Ltd, its subsidiaries and Shenzhen Yangang Mingzhu Supply Chain Management Co., Ltd.*
Trucking services
Other Subsidiaries
Combined and consolidated financial results of MingZhu Investment Limited, YGMZ (Hong Kong) Limited, Cheyi (BVI) Limited, Cheyi (Hong Kong) Limited, Yinhua (BVI), Yinhua (HK) Limited, Feipeng Global Limited and Feipeng (HK) Limited**
Investment holdings
VIEs
Consolidated financial results of Zhejiang Cheyi Network Technology Co., Ltd and its subsidiaries, Hainan Zhisheng Automobile Services Co., Ltd., and Xinjiang Feipeng Logistics Co., Ltd.
Car-hailing and driver management services, service platform for insurance companies and regional trucking services
*
We consolidate financial results of the Shenzhen Yangang Mingzhu Freight Industry Co., Ltd and its subsidiaries, and then combine it with financial results of the Shenzhen Yangang Mingzhu Supply Chain Management Co., Ltd..
**
We consolidate financial results of the Mingzhu Investment Limited and YGMZ (Hong Kong) Limited and then combine it with the consolidated financial results of Cheyi (BVI) Limited, Cheyi (Hong Kong) Limited, Yinhua (BVI), Yinhua (HK) Limited, Feipeng Global Limited and Feipeng (HK) Limited.
SELECTED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE
INCOME (LOSS)
For the Year Ended December 31, 2022
The Company
WFOE
Directly owned PRC subsidiaries
Other Subsidiaries
VIEs
Eliminations
Total
REVENUES
$
-
$
-
$
36,461,921
$
-
$
77,611,882
$
-
$
114,073,803
NET INCOME
$
(429,246
)
$
-
$
276,020
$
(438,108
))
$
2,487,522
$
-
$
1,896,188
COMPREHENSIVE (LOSS) INCOME
$
(284,182
)
$
-
$
(386,650
)
$
(465,756
)
$
1,623,345
$
-
$
486,757
For the Year Ended December 31, 2021
The Company
WFOE
Directly owned PRC subsidiaries
Other Subsidiaries
VIEs
Eliminations
Total
REVENUES
$
-
$
-
$
17,358,914
$
-
$
-
$
-
$
17,358,914
NET (LOSS) INCOME
$
(447,929
)
$
-
$
183,931
$
(674,415
)
$
-
$
-
$
(938,413
)
COMPREHENSIVE (LOSS) INCOME
$
(447,929
)
$
-
$
(1,098,938
)
$
(32,520
)
$
-
$
-
$
(1,579,387
)
For the Year Ended December 31, 2020
The Company
WFOE
Directly owned PRC subsidiaries
Other Subsidiaries
VIEs
Eliminations
Total
REVENUES
$
-
$
-
$
18,793,951
$
-
$
-
$
-
$
18,793,951
NET (LOSS) INCOME
$
(877
)
$
-
$
999,201
$
(49,156
)
$
-
$
(166,872
)
$
782,296
COMPREHENSIVE (LOSS) INCOME
$
(877
)
$
-
$
1,767,529
$
(64,656
)
$
-
$
(166,872
)
$
1,535,124
77
SELECTED CONDENSED CONSOLIDATED BALANCE SHEETS
As of December 31, 2022
The
Company
WFOE
Directly
owned PRC subsidiaries
Other subsidiaries
VIEs
Eliminations
Total
Cash, cash equivalents and restricted cash
$
1,139,015
$
-
$
283,606
$
328,260
$
3,936,430
$
-
$
5,687,311
Intercompany receivables
$
-
$
-
$
-
$
639,321
$
-
$
(639,321)
$
-
Total current assets
$
15,441,671
$
-
$
32,283,567
$
9,178,325
$
32,625,609
$
(23,278,787)
$
66,250,385
Investments in subsidiaries and VIEs
$
48,087,748
$
-
$
-
$
-
$
-
$
(48,087,748)
$
-
Total non-current assets
$
48,087,748
$
-
$
1,336,314
$
5,516,783
$
10,097,644
$
(19,832,019)
$
45,206,470
Total assets
$
63,529,419
$
-
$
34,154,986
$
14,695,107
$
42,723,253
$
(43,645,911)
$
111,456,855
Total liabilities
$
21,497,786
$
-
$
23,284,935
$
14,688,710
$
26,525,649
$
(22,642,217)
$
63,354,863
Total shareholders' equity
$
42,031,633
$
-
$
10,870,051
$
6,398
$
16,197,604
$
(21,003,694)
$
48,101,992
Total liabilities and shareholders' equity
$
63,529,419
$
-
$
34,154,986
$
14,695,107
$
42,723,253
$
(43,645,911)
$
111,456,855
As of December 31, 2021
The
Company
WFOE
Directly
owned PRC
subsidiaries
Other
subsidiaries
VIEs
Eliminations
Total
Cash and restricted cash
$
3,079,046
$
-
$
430,878
$
765,128
$
1,477,065
$
-
$
5,752,117
Intercompany receivables
$
14,083,531
$
-
$
-
$
8,852,220
$
-
$
(22,935,751
)
$
-
Total current assets
$
17,162,577
$
-
$
28,734,263
$
9,617,348
$
7,030,714
$
(22,935,751
)
$
39,609,151
Investments in subsidiaries and VIEs
$
23,470,712
$
9,313,142
$
-
$
5,516,783
$
-
$
(38,300,637
)
$
-
Total non-current assets
$
32,970,712
$
9,313,142
$
2,511,855
$
5,516,783
$
10,576,090
$
(24,143,067
)
$
36,745,515
Total assets
$
50,133,289
$
9,313,142
$
31,246,118
$
15,134,131
$
17,606,804
$
(47,078,818
)
$
76,354,666
Total liabilities
$
15,160,935
$
-
$
19,566,067
$
14,692,288
$
8,293,662
$
(23,031,900
)
$
34,681,052
Total shareholders' equity
$
34,972,354
$
9,313,142
$
11,680,051
$
441,843
$
9,313,142
$
(24,046,918
)
$
41,673,614
Total liabilities and shareholders' equity
$
50,133,289
$
9,313,142
$
31,246,118
$
15,134,131
$
17,606,804
$
(47,078,818
)
$
76,354,666
78
SELECTED CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
For the year ended December 31, 2022
The
Company
WFOE
Directly
owned PRC subsidiaries
Other subsidiaries
VIEs
Eliminations
Total
Net cash (used in) provided by operating activities
$
(2,154,421
)
$
-
$
70,917
$
(435,065
)
$
(1,435,387
)
$
-
$
(3,953,955
)
Net cash used in investing activities
$
-
$
-
$
12,663
$
(435,065
)
$
778,705
$
-
$
(917,288
)
Cash flows from the Company to the Company's subsidiaries
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Cash flows from the Company to VIEs
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Cash flows from the Mingzhu HK to PRC subsidiaries
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Cash flows from the Company's subsidiaries to the Company
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Cash flows from VIEs to the Company
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Cash flows from PRC subsidiaries to the Mingzhu HK
$
-
$
-
$
-
$
-
$
$
-
$
-
Other net cash provided by (used in) financing activities
$
214,389
$
-
$
(200,943
)
$
-
$
779,811
$
-
$
2,726,903
Net cash provided by (used in) financing activities
$
214,389
$
-
$
(200,943
)
$
-
$
779,811
$
-
$
793,257
Effect of exchange rate change on cash
$
-
$
-
$
(29,893
)
$
(1,809
)
$
400,692
$
-
$
368,989
Cash and cash equivalents at beginning of the period
$
3,079,046
$
-
$
430,878
$
765,128
$
1,477,064
$
-
$
5,752,117
Cash and cash equivalents at beginning of the period
$
1,139,014
$
-
$
283,622
$
328,255
$
2,000,885
$
-
$
5,687,311
79
For the year ended December 31, 2021
The
Company
WFOE
Directly
owned PRC subsidiaries
Other subsidiaries
VIEs
Eliminations
Total
Net cash (used in) provided by operating activities
$
(4,848,590
)
$
-
$
(1,415,069
)
$
(17,520,503
)
$
4,667,462
$
(4,667,462
)
$
(23,784,162
)
Net cash (used in) provided by investing activities
$
-
$
-
$
(199,481
)
$
-
$
-
$
1,477,065
$
1,277,584
Cash flows from the Company to the Company's subsidiaries
$
(9,500,000
)
$
-
$
$
9,500,000
$
-
$
-
$
-
Cash flows from the Company to VIEs
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Cash flows from the Mingzhu HK to PRC subsidiaries
$
-
$
-
$
8,224,143
$
(8,224,143
)
$
-
$
-
$
-
Cash flows from the Company's subsidiaries to the Company
$
2,000
$
-
$
-
$
(2,000
)
$
-
$
-
$
-
Cash flows from VIEs to the Company
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Cash flows from PRC subsidiaries to the Mingzhu HK
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Other net cash provided by financing activities
$
17,406,316
$
-
$
(8,440,765
)
$
7,698,996
$
(3,588,863
)
$
3,588,863
$
16,664,547
Net cash provided by (used in) financing activities
$
7,908,316
$
-
$
(216,622
)
$
8,972,853
$
(3,588,863
)
$
3,588,863
$
16,664,547
Effect of exchange rate change on cash
$
2,444
$
-
$
228,099
$
(242,020
)
$
67,423
$
(67,423
)
$
(11,477
)
Cash, cash equivalents and restricted cash at end of the period
$
16,876
$
-
$
2,033,951
$
9,554,798
$
331,043
$
(331,043
)
$
11,605,625
Cash and cash equivalents at end of the period
$
3,079,046
$
-
$
430,878
$
765,128
$
1,477,065
$
-
$
5,752,117
80
For the year ended December 31, 2020
The
Company
WFOE
Directly
owned PRC subsidiaries
Other subsidiaries
VIEs
Eliminations
Total
Net cash used in operating activities
$
(877
)
$
-
$
(673,305
)
$
(49,156
)
$
-
$
(166,871
)
$
(890,209
)
Net cash used in investing activities
$
-
$
-
$
(156,029
)
$
-
$
-
$
-
$
(156,029
)
Cash flows from the Company to the Company's subsidiaries
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Cash flows from the Company to VIEs
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Cash flows from the Mingzhu HK to PRC subsidiaries
$
-
$
-
$
552,709
$
(552,709
)
$
-
$
-
$
-
Cash flows from the Company's subsidiaries to the Company
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Cash flows from VIEs to the Company
$
-
$
-
$
-
$
-
$
-
$
$
-
Cash flows from PRC subsidiaries to the Mingzhu HK
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Other net cash provided by financing activities
$
-
$
-
$
2,008,988
$
10,137,517
$
-
$
166,871
$
12,313,376
Net cash provided by financing activities
$
-
$
-
$
2,561,697
$
9,584,808
$
-
$
166,871
$
12,313,376
Effect of exchange rate change on cash
$
82
$
-
$
113,283
$
1,615
$
-
$
-
$
114,980
Cash and cash equivalents at beginning of the period
$
17,671
$
-
$
188,305
$
17,531
$
-
$
-
$
223,507
Cash, cash equivalents and restricted cash at end of the period
$
16,876
$
-
$
2,033,951
$
9,554,798
$
-
$
-
$
11,605,625
81
On October 21, 2020, we completed
our firm commitment initial public offering of 3,000,000 ordinary shares at a public offering price of US$4.00 per share, for total gross
proceeds of US$12 million, before deducting underwriting discounts, commissions and other related expenses. Our ordinary shares began
trading on The Nasdaq Capital Market on October 21, 2020 under the symbol "YGMZ".
On October 30, 2020, the underwriter
and sole book-runner of our underwritten initial public offering, exercised the partial over-allotment option and purchased an additional
350,000 ordinary shares of the Company at the initial public offering price of US$4.00 per share.
On December 4, 2020, the underwriter
and sole book-runner of our underwritten initial public offering, further exercised the partial over-allotment option and purchased an
additional 4,040 ordinary shares of the Company at the initial public offering price of US$4.00 per share.
On March 12, 2021, the Company
closed a registered direct public offering of 3,333,335 Units, with each Unit consisting of (i) one ordinary share of the Company, par
value $0.001 per share, and (ii) one warrant to purchase 0.75 ordinary share. The Company sold the Units at a price of $6.00 per Unit.
The Company received gross proceeds from the Offering, before deducting estimated offering expenses payable by the Company, of approximately
$18,000,000.
On April 21, 2021, the underwriter
and sole book-runner of our underwritten IPO, exercised its partial warrant and purchased a total of 214,286 ordinary shares of the Company
with no cash in consideration.
On June 14, 2021, the underwriter
and sole book-runner of our underwritten IPO, exercised its partial warrant and purchased a total of 43,616 ordinary shares of the Company
with no cash in consideration.
On December 29, 2021, we entered
into a Share Purchase Agreement with Cheyi BVI which operates its business through Cheyi Network, an integrated online car-hailing and
driver management services company, and each of shareholders of Cheyi BVI.
Pursuant to the agreement,
the total consideration for the acquisition of 100% equity ownership of Cheyi BVI is an aggregate of $23,470,712, consisting of the issuance
by the Company to the shareholders of Cheyi BVI an aggregate of 3,189,000 Company's ordinary shares (representing $6,760,680 with
$2.12 per ordinary share) and payment of $2,000,000 at closing, and Year-2021 earnout payment of $8,826,019 and Year-2022 earnout payment
of $5,884,013 if Cheyi BVI's audited net income for its fiscal year 2021 and 2022 is no less than U.S. $3,000,000 respectively.
The two earnout payments are due 13 months upon the delivery of Cheyi BVI's audited financial statements.
Cheyi Network was established
in December 2015 as a comprehensive automobile service platform, providing a full range of services to the automotive industry. Cheyi
Network has built an integrated business platform with more than 6,000 vehicles and drivers for ride hailing services under management.
Its vehicles and drivers provide services to major mobility technology platforms, such as SAIC Mobility and T3 Mobility. The acquisition
is expected to offer our customers additional platform enhancements, and directly fits with our acquisition strategy, which includes adding
financially accretive, best-of-breed companies and products.
On December 31, 2021, the
parties completed the transaction. Upon the closing of the transaction, we acquired 100% shares outstanding of the Cheyi BVI, and we issued
3,189,000 ordinary shares and paid $2,000,000 to the sellers.
On March 14, 2022, we entered
into a Share Purchase Agreement with Yinhua which develops and operates a comprehensive auto related service platform to serve auto insurance
companies, and each of the shareholders of the Yinhua.
Under terms of the share purchase
agreement, we agreed to pay $10,076,600 in exchange for 100% of the equity of Yinhua. Of the total consideration to be paid, $7,078,100
was paid in the form of 3,826,000 newly issued ordinary shares of the Company, representing $1.85 per ordinary share, and $1,000,000 in
cash upon closing. In addition, a cash earnout of $1,998,500 shall be paid if Yinhua achieves a net income target threshold of $1.3 million
during the calendar year of 2022.
82
Founded in 2018, Yinhua provides
diversified, differentiated and customized value-added auto related services to auto insurance companies, where the services include road
security services, car maintenance services, car inspection services and other services. Yinhua develops and operates a comprehensive
auto related service platform for auto insurance companies combining intelligent human-vehicle interaction functions with car owner programs.
On March 18, 2022, the parties
completed the transaction. Upon the closing of the transaction, we acquired 100% of the outstanding shares outstanding of the Yinhua,
and we issued 3,826,000 ordinary shares and paid $1,000,000 to the sellers.
Recent Developments
On December 21, 2022, we entered
into a Share Purchase Agreement with Feipeng BVI which provides regional trucking services, and each of the shareholders of the Feipeng
BVI, pursuant to which, among other things and subject to the terms and conditions contained therein, we acquired 100% of Feipeng BVI
for approximately $14,540,436, of which US $9,550,000 will be paid in cash upon closing in form of cash. Feipeng BVI shall receive a certain
number of shares valued at $4,990,436 if it achieves a targeted net income of US$2.4 million during the calendar year 2023.
The Company has 22,960,277
ordinary shares outstanding as of the date of this annual report.
Important Factors Affecting our Results
of Operations and Existing Trends
Our performance of operations
and financial conditions have been, and are expected to continue to be, affected by a number of factors, including macroeconomic conditions,
major customers demand, collectability of accounts receivable and timing of collection, regulations and seasonality, many of which may
be beyond our control.
Major Customers Demand
During the years ended December
31, 2022, 2021 and 2020, sales to our top five customers accounted for approximately 31.4%, 49.4% and 78.2%, respectively. Our service
agreements with our customers have an expected length of one year or less. While certain service agreements contain options of renewal,
there is no assurance that our major customers will continue their business relationship with us, or the revenue generated from dealings
with them will be maintained or increased in the future. If we are unable to renew the service agreements with our existing customers,
or there is a reduction or cessation of demands from these customers for whatever reasons and we are unable to enter into new service
agreements of comparable size or on similar terms in substitution, our business, financial conditions and results of operation may be
materially and adversely affected.
Collectability and Timing of Collection of
Accounts Receivable
Our cash flows depend on the
timely receipt of payments from our customers. There is no assurance that our customers will pay us on time and in full. Should we experience
any unexpected delay or difficulty in collecting accounts receivable from our customers, our operating results and financial condition
may be adversely affected.
83
Regulations
In recent years, the government
has issued many supportive policies to encourage the development of the transportation industry in Guangdong and Xinjiang which are our
two main markets. Encouraged by those policies, the transportation industry is expected to become more standardized and modernized. The
trucking service market which is a subset of the transportation industry is likely to evolve along with the development of transportation
industry.
Seasonality
For our customers that are
logistic companies, the routes and schedules that have been contracted with us are generally scheduled and regular and remain unchanged
throughout the contract period. If our customers experience sudden spikes in demand for trucking services, they may seek other service
providers instead of changing the terms of our trucking services.
In general, demand for our
trucking services has been observed to be higher in June, November and December each year due to the sales campaigns organized by various
online shopping platforms. To meet the demand in peak seasons, we extend our hours of operation each day during these months. Despite
peak demand seasons being observed in the consumer goods industry, the business's dedicated trucking services ensure a level of
stability in our operations and therefore our directors feel that seasonality do not have major impact to the business' overall
revenue and business operations.
For car-hailing and driver
management services and car-owner services, there is no significant impact found as due to seasonality.
COVID-19 Pandemic
The outbreak of COVID-19 since
the beginning of 2020 has adversely impacted the global economy. With daily life in China gradually returning to normal since April, our
business related to logistics industry has gone back to normal as well. However some new cases found in Xinjiang region caused heavy lockdown
starting from June. Our revenue generated from Xinjiang was substantially reduced during June. To the date of this filing, our revenue
is still negatively affected by temporarily regional lockdown across the nation.
●
The impacts of COVID-19 on our business, financial condition, and results of operations include, but are not limited to, the following:
●
Extended Collection Time and Increase in Bad Debt. Our customers may require additional time to pay us which may require us to record additional bad debt. A total of $945,761 of provision for doubtful accounts had been recorded during the year 2022. We are currently working with our customers for payments and will monitor our collection closely.
●
Shortage of Drivers. Due to the travel restrictions imposed by the local governments, some of our drivers in Xinjiang region have not been able to get back on road for work. However, such shortage of drivers did not have significant impact on our services, because our subcontractors were more than capable to provide services to our customers.
Impacts to our results of
operations depend on future developments and new information that may emerge regarding the duration and severity of the COVID-19 pandemic
and the actions taken by government authorities and other entities to contain COVID-19 and mitigate its impact, almost all of which are
beyond our control. Nonetheless, we are closely monitoring the development of the COVID-19 pandemic and will continually assess its potential
impact to our business. Because of the uncertainty surrounding the COVID-19 pandemic, the further business disruption, especially in Xinjiang
and the related financial impact related to the outbreak of and response to COVID-19 cannot be reasonably estimated at this time.
84
Level of Income Tax and Preferential Tax
Treatment
Cayman Islands
The Company was incorporated
in the Cayman Islands and is not subject to tax on income or capital gains under the laws of Cayman Islands. Additionally, the Cayman
Islands does not impose a withholding tax on payments of dividends to shareholders.
British Virgin Islands
MingZhu BVI, Cheyi BVI, Yinhua
and Feipeng BVI are incorporated in the British Virgin Islands and are not subject to tax on income or capital gains under current British
Virgin Islands law. In addition, upon payments of dividends by these entities to their shareholders, no British Virgin Islands withholding
tax will be imposed.
Hong Kong
MingZhu HK, Cheyi (Hong Kong)
Limited, Yinhua (HK) Limited and Feipeng Enterprises (HK) Limited are incorporated in Hong Kong and are subject to Hong Kong Profits Tax
on the taxable income as reported in their statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The
applicable tax rate is 16.5% in Hong Kong. The Company did not make any provisions for Hong Kong profit tax as there were no assessable
profits derived from or earned in Hong Kong since inception. Under Hong Kong tax law, MingZhu HK, Cheyi (Hong Kong) Limited, Yinhua (HK)
Limited and Feipeng Enterprises (HK) Limited are exempted from income tax on its foreign-derived income and there are no withholding taxes
in Hong Kong on remittance of dividends.
PRC
The Company PRC subsidiaries
are governed by the income tax laws of the PRC and the income tax provision in respect to operations in the PRC is calculated at the applicable
tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under
the Enterprise Income Tax Laws of the PRC (the "EIT Laws"), Chinese enterprises are subject to income tax at a rate of 25%
after appropriate tax adjustments.
The Ministry of Finance ("MOF") and State Administration
of Taxation ("SAT") on March 14, 2022 jointly issued Cai Shui 2022 No. 13. This clarified that from January 1, 2022 to December
31, 2024, eligible small enterprises whose first RMB 1,000,000 of annual taxable income is eligible for 75% reduction on a rate of 20%
(i.e., effective rate is 5%) and the income between RMB 1,000,000 and RMB 3,000,000 is eligible for 50% reduction on a rate of 20% (i.e.
effective rate is 10%). For the year ended December 31, 2020, MingZhu Pengcheng was eligible to employ this policy.
Foreign Currency Translation
Our financial statements are
expressed in U.S. dollars but the functional currency of our operating subsidiaries is RMB. Our results of operations are translated at
average exchange rates during the relevant financial reporting periods, assets and liabilities are translated at the unified exchange
rate at the end of these periods and equity is translated at historical exchange rates. Adjustments resulting from the process of translating
the local currency financial statements into U.S. dollars are included in determining comprehensive income.
Description of Selected Income Statement
Items
Revenues
. We generate
revenue from our trucking service business, car-hailing and driver management services and car owner services.
Cost and expenses
.
Cost and expenses includes all operational costs and expenses.
Other (Expenses) Income
.
Our other income and expenses primarily consisted of net rental income from renting out spare office space and property, interest expenses
and others.
Provision for income tax
.
Tax at a rate of 25% after appropriate tax adjustments.
85
For the Years Ended December 31, 2022 and 2021
Results of Operations
The following table summarizes
the results of our operations for the year ended December 31, 2022 and 2021, respectively, and provides information regarding the dollar
and percentage increase or (decrease) during such periods.
For the year ended
December 31
Change
2022
2021
Change
(%)
REVENUES
$
114,073,803
$
17,358,914
$
96,714,889
557.1
COSTS AND EXPENSES
Costs of trucking services
34,789,989
15,428,131
19,361,858
125.5
Costs of rental services
43,966,881
-
43,966,881
N/A
Costs of car owner services
26,009,485
-
26,009,485
N/A
General and administrative expenses
5,646,443
2,050,954
3,595,489
175.3
Sales and marketing expenses
784,653
367,633
417,020
113.4
Total costs and expenses
111,197,451
17,846,718
93,350,733
523.1
-
INCOMEX (LOSS) FROM OPERATIONS
2,876,352
(487,804
)
3,364,156
N/A
OTHER (EXPENSES) INCOME
Interest expenses
(1,430,978
)
(396,188
)
(1,034,790
)
261.2
Other expenses
(927,568
)
(360,032
)
(567,536
)
157.6
Other income
1,908,424
441,025
1,467,399
332.7
Total other (expenses) Income, net
(450,122
)
(315,195
)
(134,927
)
42.8
-
INCOME (LOSS) BEFORE INCOME TAXES
2,426,230
(802,999
)
3,229,229
N/A
PROVISION FOR INCOME TAXES
530,042
135,414
394,628
291.4
-
NET INCOME (LOSS)
$
1,896,188
$
(938,413
)
$
2,834,601
N/A
Revenues
Our operations are primarily
based in the PRC, where we derive all of revenues. We engaged in a number of diverse business activities, including trucking services,
car-hailing and driver management services, and car owner services. Total revenues increased by $96,714,889, or 557.1%, to $114,073,803
for the year ended December 31, 2022 as compared to $17,358,914 for the year ended December 31, 2021. This increase was attributable to
the acquisition of certain subsidiaries and VIEs in 2022. Revenues generated from our trucking services are increased by 110% as we introduced
more customers during 2022.
Disaggregated information
of revenues by types of services provided are as follows:
2022
2021
Trucking services
$
36,461,921
$
17,358,914
Car-hailing and driver management services
50,558,733
-
Car owner services
27,053,149
-
Total revenues
$
114,073,803
$
17,358,914
Cost and Expenses
Total costs and expenses increased
by $93,350,733, or 523.1%, to $111,197,451 for the year ended December 31, 2022 as compared to $17,382,139 for the year ended December
31, 2021. This increase was attributable to the acquisition of certain subsidiaries and VIEs in 2022.
86
Gross Profit and Gross Margin
Our gross profit is equal to
the difference between our revenues and our costs of different services provided. Our gross profit decreased 382.1% to $9,307,448 during
the year ended December 31, 2022, from $1,930,783 for the same period in 2021. For the years ended December 31, 2022 and 2021, our gross
margin was 11.1% and 8.2%, respectively. The decrease of gross margin was primarily due to the acquisition of VIEs which has relatively
lower gross margin.
Net Income (Loss)
As a result of the foregoing,
our net income totaled approximately $1,896,188 for the year ended December 31, 2022, as compared to a net loss of approximately $938,413
for the year ended December 31, 2021, representing a increase of $2,834,601.
For the Years Ended December 31, 2021 and 2020
Results of Operations
The following table summarizes
the results of our operations for the year ended December 31, 2021 and 2020, respectively, and provides information regarding the dollar
and percentage increase or (decrease) during such periods.
For the year ended
December 31
Change
2021
2020
Change
(%)
REVENUES
$
17,358,914
$
18,793,951
$
(1,435,037
)
-7.6
%
COSTS AND EXPENSES
Transportation costs
15,428,131
16,010,644
(582,513
)
-3.6
%
General and administrative expenses
2,050,954
1,321,412
729,542
55.2
%
Sales and marketing expenses
367,633
50,083
317,550
634.0
%
Total costs and expenses
17,846,718
17,382,139
464,579
2.7
%
(LOSS) INCOMEX FROM OPERATIONS
(487,804
)
1,411,812
(1,899,616
)
-134.6
%
OTHER (EXPENSES) INCOME
Interest expenses
(396,188
)
(374,048
)
(22,140
)
5.9
%
Other expenses
(360,032
)
(65,828
)
(294,204
)
446.9
%
Other income
441,025
176,802
264,223
149.4
%
Total other (expenses) Income, net
(315,195
)
(263,074
)
(52,121
)
19.8
%
INCOME (LOSS) BEFORE INCOME TAXES
(802,999
)
1,148,738
(1,951,737
)
-169.9
%
PROVISION FOR INCOME TAXES
135,414
366,442
(231,028
)
-63.0
%
NET (LOSS) INCOME
$
(938,413
)
$
782,296
$
(1,720,709
)
-220.0
%
Revenues
Our revenues are primarily
derived from transportation services. Total revenues decreased by $1,435,037, or 7.6%, to $17,358,914 for the year ended December 31,
2021 as compared to $18,793,951 for the year ended December 31, 2020. The decrease was mainly attributable to the diminished customer
demands in Xinjiang province during Covid-19 pandemic. With daily life in China gradually returning to normal since April 2020, our business
related to logistics industry has gone back to normal as well. However, new cases found in Xinjiang province has caused the implementation
of heavy lockdowns from time to time. Consequently, the management relocated trucks and trailers to other regions. The management will
follow the development of the pandemic in Xinjiang province. We have planned to return Xinjiang province in second quarter of year 2022.
87
Our operations are primarily
based in the PRC, where we derive all of revenues. Management also reviews consolidated financial results by business locations. Disaggregated
information of revenues by geographic locations are as follows:
For the year ended
December 31
Change
2021
2020
Change
(%)
Guangdong province
$
14,662,029
$
13,522,929
$
1,139,100
8.4
%
Xinjiang province
2,696,885
5,271,022
(2,574,137
)
-48.8
%
Total revenues
$
17,358,914
$
18,793,951
$
(1,435,037
)
-7.6
%
Our revenue was primarily generated
from Guangdong province and Xinjiang province in the PRC, which accounted for approximately 84.5% and 15.5% of our total revenue for the
year ended December 31, 2021, respectively, and approximately 72.0% and 28.0% of our total revenue for the year ended December 31, 2020,
respectively. Through reasonable and effective allocation of our resources, we expect that our revenue will grow in both Guangdong and
Xinjiang provinces.
Revenue from Guangdong Province
Revenue from Guangdong province
is primarily generated from highway transportation services and subcontracting business of air freight services. Services are mostly starting
from Guangdong province to other provinces in the PRC except Xinjiang province. Revenue is recognized over the requisite transit period
as the customer's goods move from origin to destination which would take one to three days.
The revenue generated from
Guangdong province increased by 8.4% or $1,139,100 to $14,662,029 for the year ended December 31, 2021 compared with the revenue of $13,522,929
generated from Guangdong province for the year ended December 31, 2020.
Revenue from Xinjiang province
Revenue from Xinjiang province
is primarily comprised of transportation services within the Xinjiang province. Services are mostly completed within approximately 24
hours. Revenue is recognized over the requisite transit period as the customer's goods move from origin to destination, and the
delivery note is signed by both parties.
The revenue generated from
Xinjiang province decreased by 48.8% or $2,574,137 to $2,696,885 for the year ended December 31, 2021 compared with the revenue of $5,271,022
generated from Xinjiang province for the year ended December 31, 2020. The decrease was mainly due to the relocation of our fleet, we
assigned some of our vehicles out of Xinjiang and served our customers in other regions.
Cost and Expenses
The costs and expenses of our
transportation services consist of transportation costs, general and administrative expenses, provision for doubtful accounts and sales
and marketing expenses.
Total costs and expenses increased
by $464,579, or 2.7%, to $17,846,718 for the year ended December 31, 2021 as compared to $17,382,139 for the year ended December 31, 2020.
This increase was primarily due to an increase of sales and marketing expenses as we intend to improve our public image and gain more
public exposures and the professional fees in relation with the private placement and acquisitions of Cheyi BVI and Yinhua.
Gross Profit and Gross Margin
Our gross profit is equal to
the difference between our revenues and our transportation costs. Our gross profit decreased 30.6% to $1,930,783 during the year ended
December 31, 2021, from $2,783,307 for the same period in 2020. For the years ended December 31, 2021 and 2020, our gross margin was 11.1%
and 14.8%, respectively. The decrease of gross margin was primarily due to the increase of highway and bridge expenses when we relocated
our fleet to regions other than Xinjiang. The increased price of fuel is another key factor that decreased our gross profit.
Net (Loss) Income
As a result of the foregoing,
our net loss totaled approximately $938,413 for the year ended December 31, 2021, as compared to a net income of approximately $782,296
for the year ended December 31, 2020, representing a decrease of 220.0%.
88
Critical Accounting Policies and Estimates
The preparation of financial
statements in conformity with the United States generally accepted accounting principles requires our management to make assumptions,
estimates, and judgments that affect the amounts reported in the financial statements, including the notes to that, and related disclosures
of commitments contingencies, if any.
We consider our critical accounting
policies to require the more significant judgments and estimates in preparing financial statements, including those outlined in Note 2
to the financial statements included herein.
The Company has evaluated the
timing and the impact of the guidance above on the financial statements.
As of December 31, 2022, there
were no other recently issued accounting standards not yet adopted that would or could have a material effect on the Company's consolidated
financial statements.
5.B. Liquidity and Capital Resources
Our business requires substantial
amounts of cash to cover operating expenses as well as to fund capital expenditures, working capital changes, principal and interest payments
on our obligations, lease payments, to support tax payments when we generate taxable income. Recently, we have financed our capital requirements
with borrowings under our existing term loan facility, borrowings under our existing revolving credit facility, cash flows from operating
activities, direct equipment financing, operating leases and proceeds from equipment sales.
For the year ended December
31, 2022, we had a cash flow used in operating activities of $2,618,812 as compared to a cash used in operating activities of $23,784,162
for the year ended December 31, 2021. As of December 31, 2021, and 2020, we had cash of $5,687,311 and $5,752,117, respectively, and our
working capital was $4,307,516 and $5,308,150, respectively. The decrease of $1,000,634 in working capital was mainly due to the acquisition
completed and the business cooperation during year 2022.
The following summarizes the
amounts of cash disaggregated by currency denomination as of December 31, 2022 and 2021, separately in each jurisdiction in which our
affiliated entities are domiciled.
Cash held as of December 31, 2022
USD
HKD
RMB
Total in USD
Cayman
$
1,123,511
$
15,504
$
-
$
1,139,015
BVI
$
9,846
$
284
$
-
$
10,130
Hong Kong
$
262,959
$
3,958
$
51,212
$
318,129
PRC - subsidiaries
$
-
$
-
$
283,606
$
283,606
PRC - VIEs
$
-
$
-
$
3,936,431
$
3,936,431
Total
$
1,396,316
$
19,746
$
4,271,249
$
5,687,311
Cash held as of December 31, 2021
USD
HKD
RMB
Total in USD
Cayman
$
3,063,237
$
15,809
$
-
$
3,079,046
BVI
$
1,000
$
10,149
$
-
$
11,149
Hong Kong
$
724,697
$
4,875
$
24,407
$
753,979
PRC - subsidiaries
$
-
$
-
$
430,878
$
430,878
PRC - VIEs
$
-
$
-
$
1,477,065
$
1,477,065
Total
$
3,788,934
$
30,833
$
1,932,350
$
5,752,117
We believe the Company's
revenues and operations will continue to grow and the current working capital is sufficient to support its operations and debt obligations
as they mostly become due one year from the date of this annual report. However, we may need additional cash resources in the future if
we experience changed business conditions or other developments and may also need additional cash resources in the future if we wish to
pursue opportunities for investment, acquisition, strategic cooperation or other similar actions. If it is determined that the cash requirements
exceed our amounts of cash on hand, we may seek to issue debt or equity securities or obtain a credit facility.
89
Cash Flows
For the Year ended December 31, 2022 and
2021
The following summarizes the
key components of our cash flows for the year ended December 31, 2022 and 2021:
For the Year ended
December 31,
2022
2021
Net cash used in operating activities
$
(3,953,955
)
$
(23,784,162
)
Net cash provided by investing activities
2,726,903
1,277,584
Net cash provided by financing activities
793,257
16,664,547
Effect of exchange rate change on cash
368,989
(11,477
)
Net (decrease) increase in cash
(64,806
)
(5,853,508
Cash and cash equivalents at beginning of the period
5,752,117
11,605,625
Cash and cash equivalents at end of the period
$
5,687,311
$
5,752,117
Operating Activities
Net cash used in operating activities was $3,953,955 for the year ended
December 31, 2022 and was primarily attributable to (i) net income of $1,896,188, (ii) various non-cash item of $7,245,753 including gain
on disposal of vehicles, provision for doubtful accounts, amortization of deferred financing fees, depreciation for plant and equipment
and deferred tax benefit, (iii) a $ 4,678,337 decrease in prepayments, (iv) a 4,207,620 increase in accounts payable, (v) a $7,531,718
decrease in other receivables and (vi) a $1,342,620 increase in tax payables. This net cash inflow is partially offset by (i) a $3,257,814
increase of accounts receivable, (ii) a $1,313,871 increase of deposits, (iii) a $16,621,319 increase in loans receivable and a $7,766,999
decrease of others payables and accrued liabilities.
For the year ended December
31, 2022, we had a cash flow used in operating activities of $3,953,955 as compared to a cash provided by operating activities of $23,784,162
for the year ended December 31, 2021. The change was mainly contributable to the acquisition of VIEs in 2022.
Investing Activities
Net cash provided by investing
activities was $2,726,903 for the year ended December 31, 2022 and was mainly attributable to the acquisition of ownership of subsidiaries.
As compared to the cash used in investing of $1,277,584 for the year ended December 31, 2021, the increase was largely due to the transfer
of ownership of a subsidiary in December 2021.
Financing Activities
Net cash provided by financing activities was $793,257 for year ended
December 31, 2022 and was primarily attributable to (i) repayments of short-term bank borrowings of $18,631,203, (ii) repayments of long-term
bank borrowings of $92,594, (iii) repayments of loans from other financial institutions of $136,492, (iv) repayments of obligations under
capital leases of $597,533, and (v) repayments to related parties of $2,663,598. This cash outflow was offset by (i) the proceeds from
short-term bank borrowings of $21,212,202, (ii) the proceeds from long-term borrowings of $444,345, (iii) the amounts advanced from related
parties of $1,258,130.
In comparison with the cash provided by financing activities of $793,257
for the year ended December 31, 2022, we had a cash inflow from financing activities of $16,664,547 for the year ended December 31, 2021.
The difference was resulting from the proceeds of private placement received in 2021.
For the Year ended December 31, 2021 and
2020
The following summarizes the
key components of our cash flows for the year ended December 31, 2021 and 2020:
For the Year ended
December 31,
2021
2020
Reclassification*
Net cash used in operating activities
$
(23,784,162
)
$
(890,209
)
Net cash provided by (used in) investing activities
1,277,584
(156,029
)
Net cash provided by financing activities
16,664,547
12,313,376
Effect of exchange rate change on cash
(11,477
)
114,980
Net (decrease) increase in cash
(5,853,508
)
11,382,118
Cash, cash equivalents and restricted cash at beginning of the period
11,605,625
223,507
Cash, cash equivalents and restricted cash at end of the period
$
5,752,117
$
11,605,625
*
Comparative amounts of $11,416,940 is reclassified from other
receivables to loans receivables for consistency. Since the amounts are reclassification within the operating activities, thus the reclassification
did not have any effect on the net cash used in operating activities.
90
Operating Activities
Net cash used in operating
activities was $23,784,162 for the year ended December 31, 2021 and was primarily attributable to (i) net loss of $938,413, (ii) various
non-cash item of $1,742,854 including gain on disposal of vehicles, provision for doubtful accounts, amortization of deferred financing
fees, depreciation for plant and equipment and deferred tax benefit, (iii) a $1,633,476 decrease in accounts receivable, (iv) a $3,444,875
decrease in other receivables,. This net cash inflow is partially offset by (i) a $3,838,690 increase of prepayment, (ii) a $11,070,827
increase in loans receivable, (iii) a $29,269 increase in deposits, (iv) a $874,843 decrease of Accounts and notes payable, (v) a $2,989,501
decrease of others payable and accrued liabilities and (vi) a $1,422,362 decrease in tax payables.
For the year ended December 31, 2021, we had a cash flow used in operating
activities of $23,784,162 as compared to a cash provided by operating activities of $890,209 for the year ended December 31, 2020. The
change was mainly contributable to the increase of deposits and the decrease of others payable and accrued liabilities.
Investing Activities
Net cash used in investing
activities was $1,277,584 for the year ended December 31, 2021 and was mainly attributable to the purchase of equipment and the transfer
of ownership of a subsidiary. As compared to the cash used in investing of $156,029 for the year ended December 31, 2020, the increase
of $1,433,613 or 918.8% was largely due to the transfer of ownership of a subsidiary in December 2021.
Financing Activities
Net cash provided by financing
activities was $16,664,547 for year ended December 31, 2021 and was primarily attributable to (i) repayments of short-term bank borrowings
of $7,433,187, (ii) repayments of long-term bank borrowings of $22,146, (iii) repayments of loans from other financial institutions of
$300,279, (iv) repayments of obligations under capital leases of $98,972, and (v) repayments to related parties of $7,864,254. This cash
outflow was offset by (i) the proceeds from short-term bank borrowings of $6,665,840, (ii) the proceeds from long-term borrowings of $465,059,
(iii) the amounts advanced from related parties of $6,787,477 and (iv) the proceeds from private placement of $18,465,009.
In comparison with the cash
provided by financing activities of $12,313,376 for the year ended December 31, 2020, we had a cash inflow from financing activities of
$16,664,547 for the year ended December 31, 2021. The difference was resulting from the proceeds of private placement.
Dividends and Distributions
We may rely on dividends and
other distributions on equity to be paid by our PRC subsidiaries and VIEs to fund our cash and financing requirements, including the funds
necessary to pay dividends and other cash distributions to our shareholders, to service any debt we may incur and to pay our operating
expenses. Currently, substantially all of our operations are in PRC. Cash
Direct holding
If funds are required by the
Company, the PRC subsidiaries will transfer the cash to MingZhu HK, Yinhua HK, Cheyi HK and Feipeng HK in accordance with the laws and
regulations of the PRC, and then MingZhu HK, Yinhua HK, Cheyi HK and Feipeng HK will transfer the cash to the Comany.
Contractual agreement
If funds are required by the
Company, the VIEs will transfer the cash to corresponding WFOE, pursuant to the VIE agreements. WFOE will then transfer the cash to corresponding
direct shareholders that are incorporated in Hong Kong in accordance with the laws and regulations of the PRC, and then corresponding
direct shareholders will transfer the cash to the Company.
91
Under existing PRC foreign
exchange regulations, payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions,
can be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. Therefore, our PRC
subsidiaries are able to pay dividends in foreign currencies to us without prior approval from SAFE, subject to the condition that the
remittance of such dividends outside of the PRC complies with certain procedures under PRC foreign exchange regulation, such as the overseas
investment registrations by our shareholders or the ultimate shareholders of our corporate shareholders who are PRC residents. Approval
from or registration with appropriate government authorities is, however, required where the RMB is to be converted into foreign currency
and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government
may also at its discretion restrict access in the future to foreign currencies for current account transactions.
Current PRC regulations permit
our PRC subsidiaries to pay dividends to the Company only out of their accumulated profits, if any, determined in accordance with Chinese
accounting standards and regulations. In addition, each of our subsidiaries in China is required to set aside at least 10% of its after-tax
profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Each such entity in China
is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund, although the amount to be
set aside, if any, is determined at the discretion of its board of directors. Although the statutory reserves can be used, among other
ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve
funds are not distributable as cash dividends except in the event of liquidation.
For the years ended December
31, 2022, 2021, and 2020, the cash flows between the Company, the Company's subsidiaries, and the Company's VIEs, and direction
of transfer are as follows:
For the years ended December 31,
2022
2021
2020
Cash flows from the Company to the Company's subsidiaries
$
-
$
9,500,000
$
-
Cash flows from the Company to VIEs
$
-
$
-
$
-
Cash flows from the MingZhu HK to PRC subsidiaries
$
-
$
8,224,143
$
552,709
Cash flows from the Company's subsidiaries to the Company
$
-
$
2,000
$
-
Cash flows from VIEs to the Company
$
-
$
-
$
-
Cash flows from PRC subsidiaries to the MingZhu HK
$
-
$
-
$
-
The detailed listing of each cash transferred
and received for each entity during the periods presented as follows:
For the years ended December 31, 2021
Date of transfer
Cash flow
USD
March 25, 2021
Transfer from Mingzhu Logistics Holdings Limited to YGMZ (Hong Kong) Limited
$
4,000,000
March 25, 2021
Transfer from Mingzhu Logistics Holdings Limited to YGMZ (Hong Kong) Limited
$
5,500,000
Cash flows from the Company to the Company's subsidiaries
$
9,500,000
March 17, 2021
Transfer from YGMZ (Hong Kong) Limited to Shenzhen Yangang Mingzhu Freight Industry Co., Ltd.
$
2,008,599
March 23, 2021
Transfer from YGMZ (Hong Kong) Limited to Shenzhen Yangang Mingzhu Freight Industry Co., Ltd.
$
631,218
April 14, 2021
Transfer from YGMZ (Hong Kong) Limited to Shenzhen Yangang Mingzhu Freight Industry Co., Ltd.
$
5,500,000
June 4, 2021
Transfer from YGMZ (Hong Kong) Limited to Shenzhen Yangang Mingzhu Freight Industry Co., Ltd.
$
25,844
August 30, 2021
Transfer from YGMZ (Hong Kong) Limited to Shenzhen Yangang Mingzhu Freight Industry Co., Ltd.
$
58,482
Cash flows from the MingZhu HK to PRC subsidiaries
$
8,224,143
March 30, 2021
Transfer from YGMZ (Hong Kong) Limited to Mingzhu Logistics Holdings Limited
$
1,000
March 21, 2021
Transfer from YGMZ (Hong Kong) Limited to Mingzhu Logistics Holdings Limited
$
1,000
Cash flows from the Company's subsidiaries to the Company
$
2,000
For the years ended December 31, 2020
Date of transfer
Cash flow
USD
November 11, 2020
Transfer from YGMZ (Hong Kong) Limited to Shenzhen Yangang Mingzhu Freight Industry Co., Ltd.
$
399,806
November 23, 2020
Transfer from YGMZ (Hong Kong) Limited to Shenzhen Yangang Mingzhu Freight Industry Co., Ltd.
$
152,903
Cash flows from the MingZhu HK to PRC subsidiaries
552,709
92
There was no cash transfer
between the VIEs and other entities.
Except for above cash flows,
for the years ended December 31, 2022, 2021, and 2020, (1) no transfer of other assets has occurred among the Company, its subsidiaries,
and the VIEs, (2) no dividends or distributions have been made by a subsidiary or the VIEs, and (3) the Company has not made any dividends
or distributions to U.S. investors, respectively.
We intend to keep any future
earnings to finance the expansion of our business, and we do not anticipate that any cash dividends will be paid in the foreseeable future.
Adjusted Capital Expenditures
Capital expenditures are defined
under GAAP as funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology,
or equipment. To better understand our investment in acquisition and maintaining our revenue equipment, we use adjusted capital expenditures
instead. The adjusted capital expenditures a non-GAAP financial measure that includes cash paid in relation to property and equipment
acquired through the capital leases, and other financial liabilities. The adjusted capital expenditures sums up the cash we spent on (1)
acquisition of new revenue equipment, and (2) the repayments of obligation under capital leases for revenue equipment during the reporting
period. We had adjusted capital expenditures of $826,207, $298,453 and $1,136,273 for the years ended December 31, 2022, 2021 and 2020,
respectively. We intend to fund our future adjusted capital expenditures with our existing cash balance and other financing alternatives.
We will continue to make adjusted capital expenditures to support the growth of our business.
The table below shows the reconciliation
of capital expenditures and adjusted capital expenditures for the years ended December 31, 2022, 2021, and 2020.
For the years ended December 31,
2022
2021
2020
Purchases of equipment disclosed as investing cash outflows in the statements of cash flow
$
297,221
$
199,481
$
156,029
Capital expenditures
$
297,221
$
199,481
$
156,029
Repayments of obligations under capital leases disclosed as financing cash outflow in the statements of cash flow
$
528,986
$
98,972
$
980,244
Adjusted capital expenditures
$
826,207
$
298,453
$
1,136,273
93
Contingencies
From time to time, the Company
is party to certain legal proceedings, as well as certain asserted and unasserted claims.
On January 20, 2022, Shenzhen
Xincang Freight Co., Ltd. submitted the Civil Complaint to The People's Court of Yantian District, requesting the defendant Jian
Yang to compensate for the economic loss of RMB 233,055, judgment of the defendant Yangang Pearl for Jian Yang's compensation liability
to assume joint liability. According to the civil order issued by The People's Court of Yantian District on January 27, 2022, the
applicant Shenzhen Xincang Freight Co., Ltd. applies for property preservation in the case of the liability dispute between the applicant
Shenzhen Xincang Freight Co., Ltd. of seizing and freezing the property worth RMB 234,990.12 under the name of the respondent Mingzhu.
According to the notice of response issued by The People's Court of Yantian District, on February 10, 2022, the case of the liability
dispute between the plaintiff and the defendant Mingzhu and Jian Yang was filed by the Court on January 21, 2022. A trial is scheduled
for March 18, 2022. As of the date of this annual report, the case had been concluded and the Company had paid out the claimed amount
of compensation.
5.C. Research and Development, Patents and
Licenses, etc.
See the discussion under the
headings "Intellectual Property" in Item 4 above.
5.D. Trend Information
See discussion in Parts A and
B of this item.
5.E. Off-Balance Sheet Arrangements
We have no off-balance sheet
arrangements including arrangements that would affect our liquidity, capital resources, market risk support and credit risk support or
other benefits.
5.F. Tabular Disclosure of Contractual Obligations
As of December 31, 2022, the
future minimum payments under certain of our contractual obligations were as follows:
Payment due by period
Contractual obligations
Total
Less than
1 year
1-3 years
3-5 years
More than
5 years
Bank Borrowings
$
10,862,622
$
10,609,270
$
253,352
$
77,464
$
-
Capital Lease Obligations
1,915,730
757,088
1,081,178
-
-
Operating Lease Obligations
298,924
298,924
-
77,464
-
Total
$
13,077,276
$
11,665,281
$
1,334,530
$
77,464
$
-
G.
Safe harbor
See "Forward-Looking
Statements" at the beginning of this annual report.
94
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
6.A. Directors and Senior Management
The following table sets forth
information regarding our executive officers and directors as of the date of this annual report. Unless otherwise stated, the business
address for our directors and executive officers is that of our principal executive offices at 27F, Yantian Modern Industry Service Center,
No. 3018 Shayan Road, Yantian District, Shenzhen, Guangdong, China 518081.
Name
Age
Position with our company
Jinlong Yang
46
Chairman of the Board of Directors and Chief Executive Officer
Zhuo Wang
35
Director
Jingwei Zhang
34
Chief Financial Officer
Mikael Charette
43
Independent Director
Yuzhou Wang
43
Independent Director
To Wai Suen
49
Independent Director
Executive Officers and Directors
Jinlong Yang
has served as our Chief Executive Officer and Chairman of our board of directors since April 2018 and the Executive Director and General
Manager of MingZhu since August 2012. Mr. Yang has over ten years of experience in the transportation industry. He joined MingZhu as a
sales manager in May 2009 and was subsequently promoted to the General Manager, Executive Director and legal representative of MingZhu.
Prior to joining MingZhu, Mr. Yang served as an officer at the Exit and Entry Frontier Inspection Stations in Shenzhen, Guangdong, China.
Mr. Yang holds a Bachelor of Law degree from the Party School of the Central Committee of the Communist Party of China. We believe Mr.
Yang is well qualified to serve on our board of directors because of his extensive operating and management experience and knowledge in
the transportation industry.
Zhuo Wang
has
served as our director since April 2018. Mr. Wang has more than ten years of experience in investment and management. Since March 2022,
he serves as an independent director and member of the audit committee on Metal Sky Star Acquisition Corporation, a NASDAQ-listed SPAC
company (MSSAU:US). Since June 2018, he has been the Marketing Manager of Springview Enterprises Private Limited, a Singapore construction
design and building supply company. Since May 2017, Mr. Wang has also been serving as the managing director of China International Securities
Limited, a Hong Kong based securities firm, overseeing the firm's brokerage services business operations and performance. Since
March 2017, he has been serving as a director of China International Corporate Management Limited, a Hong Kong-based consulting firm that
provides a range of business solutions to small and medium sized companies in Asia. Since April 2016, Mr. Wang has been serving as the
Head of Finance and Operations of Shines International Limited, a management consultancy firm in Singapore specializing in education.
Since October 2012, Mr. Wang has been serving as Head of Finance and Marketing of GGL Enterprises Pte. Ltd., a Singapore based firm that
provides building external and interior designs, main contractor services and material supplies for major renovation and building works.
In addition, Mr. Wang served as directors in the board of various companies, including Belvedere Ventures Pte Ltd, a real estate development
and construction company, Sandhurst Global Pte Ltd., a security personnel staffing and systems company, and several holding companies.
Mr. Wang holds a Bachelor of Science in Business Management from Babson College in Boston, Massachusetts. We believe Mr. Wang is well
qualified to serve on our board of directors because of his experience in investment and management.
Jingwei Zhang
has served as our Chief Financial Officer since April 2018. He has been serving as Financial Director of MingZhu since December 2016 where
he oversees all aspects of financial control, manages yearly financial and inter-audits and provides financial, commercial and strategic
support to the company. Since October 30, 2020 Mr. Zhang has served as the Director of Nantai International Inc. (OTC: NTAI), an online
advertising platform. From May 2015 to November 2016, Mr. Zhang served as a corporate accountant of ERI Management, a management advisory
firm in Singapore, where he reviewed clients' accounts to ensure regulatory and U.S. GAAP compliance, assisted clients on cost management
and budgeting and provided tax-related consultancy to reduce clients' potential risks. From January 2014 to May 2015, Mr. Zhang
served as an accountant at St. Plum-Blossom Press Pty. Ltd., a publisher in Melbourne, Australia, where he was responsible for bookkeeping
and preparation of financial statements. Mr. Zhang holds a Bachelor of Business and Commerce in Accounting from Monash University in Melbourne,
Australia and an Associates Degree in Business Administration from City University of Hong Kong.
95
Mikael Charette
has
served as our independent director since September 2020. He served as Vice Chairman and Director of the Canadian Chamber of Commerce in
Shanghai between April 2019 and April 2021 where he represented the interest of the Canadian business community in Shanghai. Since April
2019, he has also been serving as the Vice President of Fung & Yu CPA Ltd., a Hong Kong based accounting firm serving clients in Greater
China and overseas. Since May 2006, Mr. Charette has also been serving as the President of Well Asia Group, an assets holding and managing
company that provides immigration and real estate services to high net worth individuals. For the periods from February 2005 to May 2006
and from January 2009 to December 2015, he served as a partner of Harvey Law Group where he built a successful immigration practice for
high net worth individuals and also represented clients in cross-border transactions and advised on market entry issues in China and other
Asian countries. Mr. Charette holds a Master in Law degree from City University of Hong Kong and a Juris Doctor degree from University
of Victoria in Victoria, Canada. We believe Mr. Charette is well qualified to serve on our board of directors because of his extensive
experience with legal matters relating to cross-border transactions.
Yuzhou Wang
has
served as our independent director since August 2022. Mr. Wang, has over 19 years' experience in finance and accounting. From September
2020 to current, Mr. Wang has served as the VP of the international financial department of Nanjing Xinjiekou Department Store Co., Ltd.,
d/b/a Cenbest, or Nanjing Cenbest Co. Ltd. (600682). From January 2019 to August 2020, Mr. Wang served as the CEO of Shanghai Yisheng
Financial Consulting Ltd. From July 2014 to December 2018, Mr. Wang served as the VP of financial department of Nanjing Sanpower Group.
From November 2010 to August 2014, Mr. Wang served as the VP of financial department of Zhengxing Wheel Group Co., Ltd. (NYSE: ZX). From
September 2005 to October 2010, Mr. Wang served as an audit manager of Shanghai Deloitte Huayong Certified Public Accountants Co., Ltd.
To Wai Suen
has
served as our independent director since September 2020. Mr. Suen has over 18 years of experience in finance and accounting. Mr. Suen
has been an independent director of China Zenix Auto International Limited (Prior NYSE: ZX and OTC: ZXAIY and later delisted in January
2022), one of the largest commercial vehicle wheel manufacturer in China in both the aftermarket and OEM market by sales volume, since
April 2018. From February 2018 to April 2019, he was an independent director of CT Environmental Group Limited (1363.HK), a company engaging
in industrial wastewater treatment and hazardous waste disposal. He served as the corporate secretary of China Smarter Energy Group Holdings
Limited (1004.HK) from January 2017 to April 2019, where he was responsible for the company's mergers, acquisitions, investment,
finance, internal control, audit, compliance and accounting. For the period from May 2015 to August 2016, Mr. Suen served as Chief Financial
Officer and company secretary of China Saite Group Company Limited (153.HK), where he was responsible for the company's mergers,
acquisitions, investment, internal control, audit, compliance and accounting. From November 2013 to May 2015, Mr. Suen served as the Chief
Financial Officer of China King Sun Power Group Limited, a company engaging in power plant operation, where he was responsible for mergers
and acquisitions, investment and finance, internal control and accounting of the company. During the same period, he also served as Chief
Financial Officer at DaYe Trust Co. Ltd., which is a finance company engaging in lending and an affiliate of China King Sun Power Group
Limited. Prior to that, he held various audit roles with his last position as senior audit Manager at Deloitte Touche Tohmatsu CPA Ltd.
from January 2001 to January 2012 and Deloitte Touche Tohmatsu Limited from February 2012 to July 2013. Mr. Suen has served as a director
of a number of investment holding companies, including Rising Group Limited, Rising Development Limited, Rising Manufacturing Limited,
each an investment holding company formed under the laws of Hong Kong. Mr. Suen holds a Bachelor of Arts degree from The Chinese University
of Hong Kong and a Bachelor of Commerce degree in accounting from The University of Western Australia. He is a member of the Hong Kong
Institution of Certified Public Accountant. We believe Mr. Suen is well qualified to serve on our board of directors because of his extensive
experience in accounting and finance
Each of our directors will
serve as a director until our next annual general meeting and until their successors are duly elected and qualified.
96
Family Relationships
There are no family relationships,
or other arrangements or understandings between or among any of the directors, executive officers or other person pursuant to which such
person was selected to serve as a director or officer, except that Mr. Zhuo Wang, our director, is the son of Gui Ling Guo, a director
and Vice Chair of the board of directors of MingZhu.
Duties of Directors
Under Cayman Islands law, directors
and officers owe the following fiduciary duties to act in good faith in what the director or officer believes to be in the best interests
of the company as a whole;
(ii)
duty to exercise powers for the purposes for which those powers
were conferred and not for a collateral purpose;
(iii)
directors should not properly fetter the exercise of future
discretion;
(iv)
duty to exercise powers fairly as between different sections
of shareholders;
(v)
duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests; and
(vi)
duty to exercise independent judgment.
In addition to the above, directors
also owe a duty of care which is not fiduciary in nature. This duty has been defined as a requirement to act as a reasonably diligent
person having both the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions
as are carried out by that director in relation to the company and the general knowledge skill and experience which that director has.
As set out above, directors
have a duty not to put themselves in a position of conflict and this includes a duty not to engage in self-dealing, or to otherwise benefit
as a result of their position. However, in some instances what would otherwise be a breach of this duty can be forgiven and/or authorized
in advance by the shareholders provided that there is full disclosure by the directors. This can be done by way of permission granted
in the amended and restated memorandum and articles of association or alternatively by shareholder approval at general meetings.
Accordingly, as a result of
multiple business affiliations, our officers and directors may have similar legal obligations relating to presenting business opportunities
meeting the above-listed criteria to multiple entities. In addition, conflicts of interest may arise when our board evaluates a particular
business opportunity with respect to the above-listed criteria. We cannot assure you that any of the afore-mentioned conflicts will be
resolved in our favor. Furthermore, each of our officers and directors has pre-existing fiduciary obligations to other businesses of which
they are officers or directors.
Our company has the right to
seek damages if a duty owed by our directors is breached. A shareholder may in certain limited exceptional circumstances have the right
to seek damages in our name if a duty owed by our directors is breached. You should refer to "10.B. Memorandum and Articles of Association
— Material Differences between U.S. Corporate Law and British Virgin Islands Corporate Law" for additional information on
our standard of corporate governance under Cayman Islands law.
Employment Agreements
We have entered into employment
agreements with each of our executive officers. Under these agreements, each of our executive officers is employed for an initial term
of one year and is subject to successive, automatic one-year extensions unless either party gives notice of non-extension to the other
party at least 30 days prior to the end of the applicable term.
The executive officers are
entitled to a fixed salary and to participate in our equity incentive plans, if any and other company benefits, each as determined by
our board of directors from time to time.
97
We may terminate the executive
officer's employment for cause, at any time, without notice or remuneration, for certain acts, such as conviction or plea of guilty
to a felony or grossly negligent or dishonest acts to our detriment, or misconduct or a failure to perform agreed duties. In such case,
the executive officer will not be entitled to receive payment of any severance benefits or other amounts by reason of the termination,
and his right to all other benefits will terminate, except as required by any applicable law. We may also terminate his employment without
cause upon 30 days' advance written notice. In such case of termination by us, we are required to provide the following severance
payments and benefits to the executive officer: a cash payment of one month of base salary as of the date of such termination for each
year (which is any period longer than six months but no more than one year) and a cash payment of half month of base salary as of the
date of such termination for any period of employment no more than six months, provided that the total severance payments shall not exceed
twelve months of base salary.
The executive officer may terminate
his employment at any time with 30 days' advance written notice if there is any significant change in his duties and responsibilities
or a material reduction in his annual salary. In such case, the executive officer will be entitled to receive compensation equivalent
to three months of his base salary. In addition, if we or our successor terminates the employment agreements upon a merger, consolidation,
or transfer or sale of all or substantially all of our assets with or to any other individual(s) or entity, the executive officer shall
be entitled to the following severance payments and benefits upon such termination: (1) a lump sum cash payment equal to three months
of base salary at a rate equal to the greater of his annual salary in effect immediately prior to the termination, or his then-current
annua1 salary as of the date of such termination; (2) a lump sum cash payment equal to a pro-rated amount of target annual bonus for the
year immediately preceding the termination; (3) payment of premiums for continued health benefits under our health plans for three months
fo1lowing the termination; and (4) immediate vesting of 100% of the then-unvested portion of any outstanding equity held by the executive
officer. The employment agreements also contain customary restrictive covenants relating to confidentiality, non-competition and non-solicitation,
as well as indemnification of the executive officer against certain liabilities and expenses incurred by him in connection with claims
made by reason of him being an officer of our company.
6.B. Compensation
Compensation of Directors and Executive Officers
For the fiscal year ended December
31, 2022, we paid an aggregate of $106,458 in cash and benefits in-kind granted to or accrued on behalf of all of our directors and members
of senior management for their services, in all capacities, and we did not pay any additional compensation to our directors and members
of senior management. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our executive
officers and directors. Our PRC subsidiaries and VIEs are required by law to make contributions equal to certain percentages of each employee's
salary for his or her pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident
fund.
Equity Compensation Plan Information
We have not adopted any equity
compensation plans.
Outstanding Equity Awards at Fiscal Year-End
As of December 31, 2022, we
had no outstanding equity awards.
6.C. Board Practices
Terms of Directors and Officers
Our officers are appointed
by and serve at the discretion of our board of directors. Our directors are not subject to a set term of office and hold office until
the next general meeting called for the election of directors and until their successor is duly appointed or such time as they die, resign
or are removed from office by a shareholders' ordinary resolution. The office of a director will be vacated automatically if, among
other things, the director resigns in writing, becomes bankrupt or makes any arrangement or composition with his/her creditors generally
or is found to be or becomes of unsound mind.
Our Board of Directors currently
consists of five members. Currently, a majority of our Board is independent. An "independent director" is defined under the
Nasdaq rules generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having
a relationship which in the opinion of the company's board of directors, would interfere with the director's exercise of independent
judgment in carrying out the responsibilities of a director. Our Board has determined that Ms. Wang, Mr. Charette, and Mr. Suen are "independent
directors" as defined in the Nasdaq listing standards and applicable SEC rules.
98
Audit Committee
Mikael Charette, Yuzhou Wang
and To Wai Suen serve as members of our Audit Committee. Mr. Suen serves as the chair of the Audit Committee. Each of our Audit Committee
members satisfy the "independence" requirements of the Nasdaq listing rules and meet the independence standards under Rule
10A-3 under the Exchange Act. We have determined that Mr. Suen possesses accounting or related financial management experience that qualifies
her as an "audit committee financial expert" as defined by the rules and regulations of the SEC. Our Audit Committee oversees
our accounting and financial reporting processes and the audits of our financial statements. Our Audit Committee performs several functions,
including:
●
evaluating the independence and performance of, and assesses
the qualifications of, our independent auditor, and engages such independent auditor;
●
approving the plan and fees for the annual audit, quarterly
reviews, tax and other audit-related services, and approves in advance any non-audit service to be provided by the independent auditor;
●
monitoring the independence of the independent auditor and
the rotation of partners of the independent auditor on our engagement team as required by law;
●
reviewing the financial statements to be included in our Annual
Report on Form 20-F and Current Reports on Form 6-K and reviews with management and the independent auditors the results of the annual
audit and reviews of our quarterly financial statements;
●
overseeing all aspects of our systems of internal accounting
control and corporate governance functions on behalf of the board;
●
reviewing and approving in advance any proposed related-party
transactions and report to the full Board on any approved transactions; and
●
providing oversight assistance in connection with legal, ethical
and risk management compliance programs established by management and our board of directors, including Sarbanes-Oxley Act implementation,
and makes recommendations to our board of directors regarding corporate governance issues and policy decisions.
Compensation Committee
Mikael Charette, Yuzhou Wang
and To Wai Suen serve as members of our Compensation Committee. Mr. Charette serves as the chairman of the Compensation Committee. All
of our Compensation Committee members satisfy the "independence" requirements of the Nasdaq listing rules and meet the independence
standards under Rule 10A-3 under the Exchange Act. Our Compensation Committee is responsible for overseeing and making recommendations
to our board of our directors regarding the salaries and other compensation of our executive officers and general employees and providing
assistance and recommendations with respect to our compensation policies and practices.
Corporate Governance and Nominating Committee
Mikael Charette, Yuzhou Wang
and To Wai Suen serve as members of our Nominating and Corporate Governance Committee. Mr. Charette serves as the chairman of the Nominating
and Corporate Governance Committee. All of our Nominating and Corporate Governance Committee members satisfy the "independence"
requirements of the Nasdaq listing rules and meet the independence standards under Rule 10A-3 under the Exchange Act. Our Nominating and
Corporate Governance Committee is responsible for identifying and proposing new potential director nominees to the board of directors
for consideration and reviewing our corporate governance policies. In addition, occasionally our board of directors may form sub-committees
for certain matters on an ad hoc basis, such as a pricing committee, with advisory powers only, operating under a framework and guidelines
as outlined and defined in advance by our board of directors.
6.D. Employees
See the section entitled "Employees"
in Item 4B. above.
6.E. Share Ownership
See Item 7 below.
99
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
7.A. Major Shareholders
The following table sets forth
information regarding the beneficial ownership of our ordinary shares as of the date of this annual report by our officers, directors,
and 5% or greater beneficial owners of ordinary shares.
We have determined beneficial
ownership in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess
sole or shared voting power or investment power with respect to those securities. The person is also deemed to be a beneficial owner of
any security of which that person has a right to acquire beneficial ownership within 60 days. Unless otherwise indicated, the person identified
in this table has sole voting and investment power with respect to all shares shown as beneficially owned by him, subject to applicable
community property laws.
Name and Address of Beneficial Owner
(1)
Amount and
Nature of
Beneficial
Ownership
Approximate
Percentage of
Outstanding
Shares
(2)‌
5% or Greater Shareholders
Alpha Global (BVI) Limited
(3)
5,400,000
23.5
%
Excelsior Investment Limited
(4)
1,260,000
5.5
%
Exquisite Elite Limited
(5)
2,250,000
9.8
%
Stonewdd Global (BVI) Limited
(8)
2,110,333
9.2
%
GYX GLOBAL LIMITED
(9)
3,376,750
14.7
%
Executive Officers and Directors
Jinlong Yang
(6)
5,400,000
23.5
%
Jingwei Zhang
-
-
Zhuo Wang
(7)
2,250,000
9.8
%
Mikael Charette
-
-
Yuzhou Wang
-
-
To Wai Suen
-
-
All directors and executive officers as a group (6 individuals)
7,650,000
33.3
%
(1)
Unless otherwise noted, the business address of each of the following entities or individuals is 27F, Yantian Modern Industry Service Center, No. 3018 Shayan Road, Yantian District, Shenzhen, Guangdong, China 518081.
(2)
Applicable percentage of ownership is based on 22,960,277 ordinary shares outstanding as of the date of this annual report.
(3)
Jinlong Yang, our Chief Executive Officer and Chairman of our board of directors, is the sole shareholder and director of Alpha Global (BVI) Limited, a limited company formed under the laws of the British Virgin Islands and holds the voting and dispositive power over the ordinary shares held by Alpha Global (BVI) Limited. The address of Alpha Global (BVI) Limited is Ritter House, Wickhams Cay II, PO Box 3170, Road Town, Tortola VG1110, British Virgin Islands.
(4)
Gui Ling Guo, a director and Vice Chair of the board of directors of MingZhu and mother of Zhuo Wang, our director, is the sole shareholder and director of Excelsior Investment Limited, a limited company incorporated under the laws of Hong Kong, and holds the voting and dispositive power over the ordinary shares held by Excelsior Investment Limited. The address of Excelsior Investment Limited is FLAT/RM 6 8/F, K Wah Centre, 191 Java Road North Point, Hong Kong.
(5)
Zhuo Wang, our director, is a director and holder of 86% of the outstanding shares of Exquisite Elite Limited, a British Virgin Islands company, and holds the voting and dispositive power over the ordinary shares held by Exquisite Elite Limited. The address of Exquisite Elite Limited is Vistra Corporation Service Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands.
(6)
Consists of 5,400,000 ordinary shares directly held by Alpha Global (BVI) Limited, of which Jinlong Yang, our Chief Executive Officer and Chairman of our board of directors, is the sole shareholder and director. Mr. Yang holds the voting and dispositive power over the ordinary shares held by Alpha Global (BVI) Limited.
(7)
Consists of 2,250,000 ordinary shares directly held by Exquisite Elite Limited, of which Zhuo Wang, our director, is a director and holder of 86% of its outstanding shares. Mr. Wang holds the voting and dispositive power over the ordinary shares held by Exquisite Elite Limited.
100
(8)
Dongdong Wang, manager of Cheyi Network, is the sole shareholder
and director of Stonewdd Global (BVI) Limited, a limited company incorporated under the laws of British Virgin Islands and holds the
voting and dispositive power over the ordinary shares held by Stonewdd Global (BVI) Limited. The address of Stonewdd Global (BVI) Limited
is Ritter House, Wickhams Cay II, PO Box 3170, Road Town, Tortola VG1110, British Virgin Islands.
(9)
Xiangyin Guo, manager of Zhisheng, is the sole shareholder and
director of GYX GLOBAL LIMITED, a limited company incorporated under the laws of British Virgin Islands, and holds the voting and dispositive
power over the ordinary shares held by GYX GLOBAL LIMITED. The address of GYX GLOBAL LIMITED Limited is Ritter House, Wickhams Cay II,
PO Box 3170, Road Town, Tortola VG1110, British Virgin Islands.
We are not aware of any arrangement
that may, at a subsequent date, result in a change of control of our company.
7.B. Related Party Transactions
We have adopted an audit committee
charter, which requires the committee to review all related-party transactions on an ongoing basis and all such transactions be approved
by the committee.
Set forth below are the related
party transactions of our company, which are identified in accordance with the rules prescribed under Form F-1 and Form 20-F and may not
be considered as related party transactions under PRC law.
Related Party Balances
The amount due from related
parties consists of the following:
Related Party Name (EN)
Relationship
Nature
December 31,
2022
December 31,
2021
Mr. Dongdong Wang
Shareholder
Lending with no interests
$
877,598
$
-
Exquisite Elite Limited
Shareholder
Advances to payment of professional fee
54,882
-
Mr. Hui Wang
Senior employee
Advances for operational purpose
32,839
-
Mr. Jinlong Yang
Chairman and Chief Executive Officer
Advances for operational purpose
709,694
705,280
Mr. Mingzhu Logistics
Mr. Jinlong Yang's family member as sole shareholder
Lending with no interests
1,002,332
-
$
2,677,345
$
705,280
The amount due to related parties
consists of the following:
Related Party Name (EN)
Relationship
Nature
December 31,
2022
December 31,
2021
Mr. Zuojie Dai
Manager of MingZhu Pengcheng
Advances for operational purpose
75,180
81,375
MingZhu Logistics
Mr. Jinlong Yang's family member as sole shareholder
Lending with no interests
198,490
198,490
Mr. Jingwei Zhang
Chief Financial Officer
Advances for operational purpose
75,021
-
Lihui Wang
Advances for operational purpose
1,552,720
-
Xiangyin Guo
Advances for operational purpose
4,405,945
-
$
6,108,866
$
294,344
101
Collateral and Guarantee
The collateral and guarantee made by related parties
to the Company as of December 31, 2022 consists of the following:
Related Parties
Institution Name
Term
Aggregated
Principal
Carrying
Amount
as of
December 31,
2022
Guarantee by Mr. Jinlong Yang and MingZhu Logistics
The Industrial Bank Co., Ltd.(3)
From May 9, 2022 to May 9, 2023
$
347,967
$
347,967
Guarantee by Mr. Jinlong Yang and MingZhu Logistics
Bank of China(6)
From May 16, 2022 to May 16, 2023
4,059,618
3,340,486
Guarantee by Mr. Jinlong Yang and MingZhu Logistics, pledge by a property owned by Mr. Jinlong Yang and two properties owned by Mr. Jinlong Yang's family members
China Everbright Bank(4)
From November 23, 2022 to  November 22, 2023
2,174,796
2,087,804
Guarantee by Mr. Jinlong Yang and MingZhu Logistics
Guilin Bank(5)
From April 28, 2022 to  April 28, 2023
420,460
420,460
Guarantee by Mr. Dongdong Wang and his Spouse
Zhejiang Mintai Commercial Bank
From June 30, 2022 to June 8, 2023
289,973
289,973
Guarantee by Mr. Dongdong Wang, Mr. Dongdong Wang's Spouse and five employees
Zhejiang Tailong Commercial Bank Co., Ltd. (2)
From November 18, 2022 to  May 17, 2023
376,965
376,965
Guarantee by Mr. Lihui Wang
Bank of China(6)
From January 3, 2022 to  January 3, 2023
289,973
289,973
Guarantee by Mr. Lihui Wang
Bank of China(6)
From September 2022 to  September 2023
1,159,891
1,159,891
$
10,285,333
$
8,313,519
The collateral and guarantee made by related parties
to the Company as of December 31, 2021 consists of the following:
Related Parties
Institution Name
Term
Aggregated
Principal
Carrying
Amount
as of
December 31,
2021
Guarantee by Mr. Dongdong Wang and his Spouse
Hangzhou United Rural Commercial Bank Co.,Ltd.
From November 11, 2021 to November 5, 2022
$
156,922
$
156,922
Guarantee by Mr. Dongdong Wang and his Spouse
Hangzhou United Rural Commercial Bank Co.,Ltd.
From September 23, 2021 to September 22, 2022
78,461
78,461
Guarantee by Mr. Dongdong Wang and his Spouse
Hangzhou United Rural Commercial Bank Co.,Ltd.
From September 16, 2021 to September 15, 2022
78,461
78,461
Guarantee by Mr. Dongdong Wang and his Spouse
Hangzhou United Rural Commercial Bank Co.,Ltd.
From July 14, 2021 to January 13, 2022
78,461
78,461
Guarantee by Mr. Dongdong Wang and his Spouse
Hangzhou United Rural Commercial Bank Co.,Ltd.
From June 29, 2021 to January 13, 2022
784,609
784,609
Guarantee by Mr. Dongdong Wang, Mr. Dongdong Wang's Spouse and five employees
Zhejiang Tailong Commercial Bank Co.,Ltd
From November 11, 2021 to November 19, 2022
470,765
470,765
Guarantee by Mr. Jinlong Yang and MingZhu Logistics.
Industrial Bank Co., Ltd.
From April 28, 2021 to May 7, 2022
470,765
376,612
Pledge by properties owned by Mr. Jinlong Yang and properties owned by family members of Mr. Jinlong Yang
China Everbright Bank Co., Ltd.
From November 12, 2021 to November 20, 2022
2,353,827
2,259,674
Guarantee by Mr. Jinlong Yang and MingZhu Logistics.
Bank of Communications Co., Ltd.
From April 29, 2021 to May 9, 2022
3,923,046
3,295,359
Guarantee by Mr. Jinlong Yang and MingZhu Logistics.
WeBank Co., Ltd.
From August 26, 2021 to August 26, 2023
$
470,765
$
448,348
$
8,866,082
$
8,027,672
7.C. Interests of Experts and Counsel
Not applicable.
102
ITEM 8. FINANCIAL INFORMATION
Consolidated Statements and Other Financial
Information
The financial statements required
by this item may be found at the end of this report on 20-F, beginning on page F-1.
Dividends
The holders of our ordinary
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, our 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 ordinary shares are entitled to receive, ratably, the net assets available to shareholders after
payment of all creditors.]
No Significant Changes
No significant changes to our
financial condition have occurred since the date of the annual financial statements contained herein.
ITEM 9. THE OFFER AND LISTING
9.A. Offer and Listing Details
Our ordinary shares have been
listed on the Nasdaq Capital Market under the symbol "YGMZ" since October 21, 2020, Prior to that date, there was no public
trading market for our ordinary shares.
9.B. Plan of Distribution
Not Applicable.
9.C. Markets
Nasdaq Capital Market.
9.D. Selling Shareholders
Not Applicable.
9.E. Dilution
Not Applicable.
9.F. Expenses of the Issuer
Not Applicable.
103
ITEM 10. ADDITIONAL INFORMATION
10.A. Share Capital
Not Applicable.
10.B. Memorandum and Articles of Association
We are a Cayman Islands exempted
company with limited liability and our affairs are governed by our memorandum and articles of association and the Companies Act (Revised)
of the Cayman Islands. The following description of certain provisions of our memorandum and articles of association does not propose
to be complete and is qualified in its entirety by our memorandum and articles of association.
Ordinary Shares
We are authorized to issue
50,000,000 ordinary shares of par value $0.001 each. All of our outstanding ordinary shares are fully paid and non-assessable. Certificates
representing the ordinary shares are issued in registered form. Our shareholders, whether or not they are non-residents of the Cayman
Islands, may freely hold and transfer their ordinary shares in accordance with the amended and restated memorandum and articles of association
Charter
Our charter documents consist
of our amended and restated memorandum of association and our amended and restated articles of association, or the memorandum and articles
of association. We may amend our memorandum and articles of association generally by a special resolution of our shareholders.
Board Composition
Pursuant to our memorandum
and articles of association, the business of our company is managed by our board of directors. Commencing with the first annual meeting
of the shareholders, directors are elected for a term of office to expire at the next succeeding annual meeting of the shareholders after
their election. Each director will hold office until the expiration of his or her term of office and until his or her successor has been
elected and qualified, or until his or her earlier death, resignation or removal by the shareholders or a resolution passed by the majority
of the remaining directors.
In the interim between annual
meetings of shareholders, or special meetings of shareholders called for the election of directors, any vacancy on the board of directors
may be filled by the vote of a majority of the remaining directors then in office, although less than a quorum, or by the sole remaining
director. A director elected to fill a vacancy resulting from death, resignation or removal of a director will serve for the remainder
of the full term of the director whose death, resignation or removal will have caused such vacancy and until his successor will have been
elected and qualified.
There is no cumulative voting
by shareholders for the election of directors. We do not have any age-based retirement requirement and we do not require our directors
to own any number of shares to qualify as a director.
Board Meetings
Board meetings may be held
at the discretion of the directors at such times and in such manner as the directors may determine upon not less than three days'
notice having been given to all directors. Decisions made by the directors at meetings shall be made by a majority of the directors. There
must be at least a majority of the directors (with a minimum of two) at each meeting.
Directors Interested in
a Transaction
A director must, immediately
after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by us, disclose such interest
to the board of directors. A director who is interested in a transaction entered into, or to be entered into, by the company, may vote
on a matter related to the transaction, attend a meeting of directors at which a matter relating to the transaction arises and be included
among the directors present at the meeting for the purposes of a quorum and sign a document on behalf of the company, or do any other
thin in his capacity as a director, that relates to the transaction. A director is not required to disclose his interest in a transaction
or a proposed transaction to our board of directors if the transaction or proposed transaction is between the director and us, or the
transaction or proposed transaction is or is to be entered into the ordinary course of our business and on usual terms and conditions.
104
The directors may exercise
all powers of our company to borrow money, mortgage or charge our undertakings and property, issue debentures, debenture shares and other
securities whenever money is borrowed or as security for any debt, liability or obligation of the company or of any third party.
Our directors may, by resolution,
fix the compensation of directors in respect of services rendered or to be rendered in any capacity to us.
A director may attend and speak
at any meeting of the shareholders and at any separate meeting of the holders of any class of our shares.
Rights of Shares
We are authorized to issue
50,000,000 ordinary shares of par value $0.001 each. All of our outstanding ordinary shares are fully paid and non-assessable. Certificates
representing the ordinary shares are issued in registered form. Our shareholders, whether or not they are non-residents of the Cayman
Islands, may freely hold and transfer their ordinary shares in accordance with the amended and restated memorandum and articles of association
Issuance of Shares; Variation
of Rights of Shares
Our memorandum of association
authorizes our board of directors to issue additional ordinary shares from time to time as our board of directors shall determine, to
the extent of available authorized but unissued shares. Our memorandum of association also authorizes our board of directors to establish
from time to time one or more series of preference shares and to determine, with respect to any series of preference shares, the terms
and rights of that series, including:
●
the designation of the series to be issued;
●
the number of shares of the series;
●
the dividend rights, dividend rates, conversion rights, voting rights; and
●
the rights and terms of redemption and liquidation preferences.
Our board of directors may
issue preference shares without action by our shareholders to the extent authorized but unissued. Issuance of these shares may dilute
the voting power of holders of ordinary shares.
Shareholders Meetings
Under our memorandum and articles
of association, we are required to hold an annual meeting of shareholders each year at such date and time determined by our directors.
Meetings of shareholders may be called pursuant to board resolution or the written request of shareholders holding more than 30% of the
votes of our outstanding voting shares. Written notice of meetings of shareholders must be given to each shareholder entitled to vote
at a meeting not fewer than 10 days prior to the date of the meeting, with certain limited exceptions. The written notice will state the
place, time and business to be conducted at the meeting. The shareholders listed in our share register on the date prior to the date the
notice is given shall be entitled to vote at the meeting, unless the notice provides a different date for determining the shareholders
who are entitled to vote.
A meeting of shareholders held
without proper notice will be valid if shareholders holding 90% majority of the total number of shares entitled to vote on all matters
to be considered at the meeting, or 90% of the votes of each class or series of shares where shareholders are entitled to vote thereon
as a class or series, together with an absolute majority of the remaining votes, have waived notice of the meeting and, for this purpose,
presence of a shareholder at the meeting is deemed to constitute a waiver. The inadvertent failure of the directors to give notice of
a meeting to a shareholder, or the fact that a shareholder has not received notice, will not invalidate a meeting.
Shareholders may vote in person
or by proxy. No business may be transacted at any meeting unless a quorum of shareholders is present. A quorum consists of the presence
in person or by proxy of holders entitled to exercise at least 50% of the voting rights of the shares of each class or series of shares
entitled to vote as a class or series thereon and the same proportion of the votes of the remaining shares entitled to vote thereon.
105
Indemnification
The Companies Act does not
limit the extent to which a company's memorandum and articles of association may provide for indemnification of officers and directors,
except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification
against civil fraud or the consequences of committing a crime. Our amended and restated memorandum and articles of association permit
indemnification of officers and directors for losses, damages, costs and expenses incurred in their capacities as such unless such losses
or damages arising 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 view of the SEC, such indemnification is against public policy as expressed in the Securities
Act and is therefore unenforceable.
Material Differences between U.S. Corporate
Law and Cayman Islands Corporate Law
The Companies Act is modeled
after that of English law but does not follow many recent English law statutory enactments. In addition, the Companies Act differs from
laws applicable to United States corporations and their shareholders. Set forth below is a summary of some of the significant differences
between the provisions of the Companies Act applicable to us and the laws applicable to companies incorporated in the State of Delaware
Mergers and Similar Arrangements.
The Companies Act permits mergers
and consolidations between Cayman Islands companies and between Cayman Islands companies and non-Cayman Islands companies. For these purposes,
a "merger" means the merging of two or more constituent companies and the vesting of their undertaking, property and liabilities
in one of such companies as the surviving company, and a "consolidation" means the combination of two or more constituent
companies into a consolidated company and the vesting of the undertaking, property and liabilities of such companies to the consolidated
company.
In order to effect a merger
or consolidation, the directors of each constituent company must approve a written plan of merger or consolidation, which must then be
authorized by a special resolution of the shareholders of each constituent company, and such other authorization, if any, as may be specified
in such constituent company's articles of association.
The plan of merger or consolidation
must be filed with the Registrar of Companies of the Cayman Islands together with a declaration as to the solvency of the consolidated
or surviving company, a list of the assets and liabilities of each constituent company and an undertaking that a copy of the certificate
of merger or consolidation will be given to the members and creditors of each constituent company and that notification of the merger
and consolidation will be published in the Cayman Islands Gazette. Dissenting shareholders have the right to be paid the fair value of
their shares if they follow the required procedures under the Companies Act subject to certain exceptions. The fair value of the shares
will be determined by the Cayman Islands court if it cannot be agreed among the parties. Court approval is not required for a merger or
consolidation effected in compliance with these statutory procedures.
In addition, there are statutory
provisions that facilitate the reconstruction and amalgamation of companies, provided that the arrangement is approved by a majority in
number of each class of shareholders and creditors with whom the arrangement is to be made, and who must in addition represent three-fourths
in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy
at a meeting, or meetings, convened for that purpose. The convening of the meetings and subsequently the arrangement must be sanctioned
by the Grand Court of the Cayman Islands.
While a dissenting shareholder
has the right to express to the court the view that the transaction ought not to be approved, the court can be expected to approve the
arrangement if it determines that:
●
the statutory provisions as to the required majority vote have been met;
●
the shareholders have been fairly represented at the meeting in question;
106
●
the arrangement is such that an intelligent and honest man of that class acting in respect of his interest would reasonably approve; and
●
the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act.
When a take-over offer is made
and accepted by holders of not less than 90% of the shares within four months, the offer, or may, within a two-month period conversing
on the expiration of such four months period, require the holders of the remaining shares to transfer such shares on the terms of the
offer. An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed unless there is evidence of fraud,
bad faith or collusion.
If the arrangement and reconstruction
is thus approved, the dissenting shareholders would have no rights comparable to appraisal rights, which would otherwise ordinarily be
available to dissenting shareholders of United States corporations, providing rights to receive payment in cash for the judicially determined
value of the shares.
Shareholders' Suits
In principle, we will normally
be the proper plaintiff to sue for a wrong done to us as a company and as a general rule a derivative action may not be brought by a minority
shareholder. However, based on English authorities, which would in all likelihood be of persuasive authority in the Cayman Islands, there
are exceptions to the foregoing principle, including when:
●
a company acts or proposes to act illegally or ultra vires and is therefore incapable of ratification by the shareholders;
●
the act complained of, although not ultra vires, could only be duly effected if authorized by more than a simple majority vote that has not been obtained; and
●
those who control the company are perpetrating a "fraud on the minority."
Indemnification of Directors
and Executive Officers and Limitation of Liability
The Companies Act does not
limit the extent to which a company's memorandum and articles of association may provide for indemnification of officers and directors,
except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification
against civil fraud or the consequences of committing a crime. Our amended and restated memorandum and articles of association permit
indemnification of officers and directors for losses, damages, costs and expenses incurred in their capacities as such unless such losses
or damages arising 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 view of the SEC, such indemnification is against public policy as expressed in the Securities
Act and is therefore unenforceable.
Director's Fiduciary
Duties
As a matter of Cayman Islands
law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company and therefore it is considered
that he or she owes the following duties to the company: a duty to act bona fide in the best interests of the company, a duty not to make
a profit based on his or her position as director (unless the company permits him or her to do so) and a duty not to put himself or herself
in a position where the interests of the company conflict with his or her personal interest or his or her duty to a third party. A director
of a Cayman Islands company owes to the company a duty to act with skill and care. It was previously considered that a director need not
exhibit in the performance of his or her duties a greater degree of skill than may reasonably be expected from a person of his or her
knowledge and experience. However, courts are moving towards an objective standard with regard to the required skill and care and these
authorities are likely to be followed in the Cayman Islands.
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Under Delaware corporate law,
a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty
of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent
person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all
material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director acts in a
manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain
or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders
take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally.
In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the
action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of
the fiduciary duties. Should such evidence be presented concerning a transaction by a director, the director must prove the procedural
fairness of the transaction, and that the transaction was of fair value to the corporation.
Shareholder Action by Written
Consent
The Cayman Islands law and
our articles of association provide that shareholders may approve corporate matters by way of a unanimous written resolution signed by
or on behalf of each shareholder who would have been entitled to vote on such matter at a general meeting without a meeting being held.
Under the Delaware General
Corporation Law, a corporation may eliminate the right of shareholders to act by written consent by an amendment to its certificate of
incorporation.
Shareholder Proposals
The Companies Act provides
shareholders with only limited rights to requisition a general meeting and does not provide shareholders with any right to put any proposal
before a general meeting. However, these rights may be provided in articles of association. Our articles of association allow our shareholders
holding not less than 40% of all voting power of our share capital in issue to requisition a shareholder's meeting. Other than this
right to requisition a shareholders' meeting, our articles of association do not provide our shareholders other right to put proposal
before a meeting. As an exempted Cayman Islands company, we are not obliged by law to call shareholders' annual general meetings.
Under the Delaware General
Corporation Law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with
the notice provisions in the governing documents and rules promulgated by the SEC. A special meeting may be called by the board of directors
or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.
Cumulative Voting
There are no prohibitions in
relation to cumulative voting under the Companies Act, but our articles of association do not provide for cumulative voting.
Under the Delaware General
Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation's certificate of incorporation
specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors
since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases
the shareholder's voting power with respect to electing such director.
Removal of Directors
Under our amended and restated
memorandum and articles of association, directors may be removed with or without cause, by an ordinary resolution of our shareholders.
Under the Delaware General
Corporation Law, a director of a corporation with a may be removed with the approval of a majority of the outstanding shares entitled
to vote.
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Transactions with Interested
Shareholders
The Companies Act has no comparable
statute. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. However,
although Cayman Islands law does not regulate transactions between a company and its significant shareholders, it does provide that such
transactions must be entered into bona fide in the best interests of the company and for a proper corporate purpose and not with the effect
of constituting a fraud on the minority shareholders.
The Delaware General Corporation
Law contains a business combination statute applicable to Delaware corporations whereby, unless the corporation has specifically elected
not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain business
combinations with an "interested shareholder" for three years following the date that such person becomes an interested shareholder.
An interested shareholder generally is a person or a group who or which owns or owned 15% or more of the target's outstanding voting
share within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the
target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on
which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction
which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware corporation to negotiate
the terms of any acquisition transaction with the target's board of directors.
Dissolution; Winding Up
Under the Companies Act, a
company may be wound up by either an order of the courts of the Cayman Islands or by a special resolution of its members or, if the company
is unable to pay its debts as they fall due, by an ordinary resolution of its members. The court has authority to order winding up in
a number of specified circumstances including where it is, in the opinion of the court, just and equitable to do so. Under the Companies
Act and our articles of association, our company may be dissolved, liquidated or wound up by a special resolution of our shareholders.
Under the Delaware General
Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding
100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by
a simple majority of the corporation's outstanding shares. Delaware law allows a Delaware corporation to include in its certificate
of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board.
Variation of Rights of Shares
Under the Companies Act and
our articles of association, if our share capital is divided into more than one class of shares, we may vary the rights attached to any
class with the written consent of the holders of two-thirds of the issued shares of that class or with the sanction of a special resolution
passed at a separate general meeting of the holders of the shares of that class.
Under the Delaware General
Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such
class, unless the certificate of incorporation provides otherwise.
Amendment of Governing Documents
As permitted by the Companies
Act, our amended and restated memorandum and articles of association may only be amended with a special resolution of our shareholders.
Under the Delaware General
Corporation Law, a corporation's governing documents may be amended with the approval of a majority of the outstanding shares entitled
to vote, unless the certificate of incorporation provides otherwise.
Rights of Non-Resident or
Foreign Shareholders
There are no limitations imposed
by our amended and restated memorandum and articles of association on the rights of non-resident or foreign shareholders to hold or exercise
voting rights on our shares. In addition, there are no provisions in our amended and restated memorandum and articles of association governing
the ownership threshold above which shareholder ownership must be disclosed.
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Listing
Our ordinary shares are listed
on the Nasdaq Capital Market under the symbol "YGMZ". We do not intend to apply for listing of the warrants on any securities
exchange or nationally recognized trading system, and we do not expect a market to develop for the warrants.
Transfer Agent and Registrar
The transfer agent and registrar
for our securities is Vstock Transfer, LLC. The transfer agent and registrar's address is 18 Lafayette Place, Woodmere, New York
11598.
10.C. Material Contracts
Below is a summary of all material
contracts to which we are a party dated within the preceding two years from the date hereof other than agreements entered into in our
ordinary course of business:
Agreements with Everbright
Bank
On November 2022, the Company
rolled over into a comprehensive credit agreement with Everbright Bank pursuant to which the Company may borrow up to RMB15 million (approximately
$2,174,796).
On November 23, 2022, MingZhu
entered into an enterprise loan agreement with Everbright Bank for a working capital loan for the drawdown of RMB15 million (approximately
$2,174,796) for one (1) year at an annual interest rate of 5.0% with a maturity date of November 22, 2023. Pursuant to the loan agreement,
the loan is guaranteed by Jinlong Yang, our chairman and Chief Executive Officer, Guizhi Yang, Jinlong Yang's sister, and Shenzhen
Mingzhu Logistics Co., Ltd., a company wholly owned by Jinlong Yang, each of whom has entered into separate pledge and guarantee agreements
with Everbright Bank.
Agreements with Bank
of China
On May 2022, the Company rolled
over into a comprehensive credit agreement with Everbright Bank pursuant to which the Company may borrow up to RMB28 million (approximately
$4,059,618).
On May 16, 2022, MingZhu entered
into an enterprise loan agreement with Everbright Bank for a working capital loan for the drawdown of RMB28 million (approximately $4,059,618)
for one (1) year at an annual interest rate of 4.5% with a maturity date of May 16, 2023. Pursuant to the loan agreement, the loan is
guaranteed by Jinlong Yang, our chairman and Chief Executive Officer, Guizhi Yang, Jinlong Yang's sister, and Shenzhen Mingzhu Logistics
Co., Ltd., a company wholly owned by Jinlong Yang, each of whom has entered into separate pledge and guarantee agreements with Everbright
Bank.
Agreements with Communications
Bank
On April 29, 2021, MingZhu
entered into a supplementary agreement with Communications Bank, pursuant to which, Communications Bank agreed provide a revolving credit
of line up to RMB 25 million (approximately $3.92 million) to MingZhu. Pursuant to the agreement, MingZhu will submit an application for
use of loan limit to Communications Bank prior to each applicable drawdown that will set forth the terms of each borrowing thereunder.
On April 29, 2021, MingZhu
submited an application for use of loan limit to Communications Bank for the drawdown of RMB 25 million (approximately $3.92 million)
for one (1) year at an annual interest rate of 5.655% with a maturity date of May 9, 2022. Pursuant to the loan agreement, the loan is
guaranteed by Jinlong Yang, our chairman and Chief Executive Officer, Guizhi Yang, Jinlong Yang's sister, Hongxin Sun, Jinhua Yang
and Mingzhu. Each of Jinlong Yang and Mingzhu has respectively entered into separate pledge and guarantee agreements with Communications
Bank and others have jointly entered into a pledge and guarantee agreement with Communications Bank.
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Capital Lease Contract with
Chailease International Finance Corporation
On September 9, 2019, MingZhu
entered into a capital lease contract with Chailease International Finance Corporation ("Chailease") for leasing of 19 tractors
from September 20, 2019 to August 20, 2022 with the option to purchase such tractors at the end of the lease term for $0. The total consideration
of lease is RMB 5,000,000 (approximately $718,205), which is to be made in 35 installment payments. In the event of any delay in payment,
Chailease may charge an annual interest of 20% of any delayed payments as penalty. MingZhu agreed to make import tax payments and purchase
relevant insurance for the lease properties.
Upon the occurrence of an event
of default, Chailease has the right to declare all outstanding payment to become immediately due and payable, charge delay penalty, terminate
the contract, request return of the lease properties an seek for compensation damages. Events of default under the capital lease contract
include, among other matters, delay in payment, disposal, transfer, sublease, pledge of the lease properties, material adverse changes
in MingZhu's financial conditions, MingZhu's material breach of loan agreements with other financial institutions, disposal
or transfer of MingZhu's material assets, and a breach of any provisions in the capital lease contract. For any default, Chailease
is entitled to 30% of the outstanding payment under the contract as liquidation damage. MingZhu agreed to waive any claims against the
lease properties once returned upon request by Chailease for MingZhu's breach of contract.
MingZhu may not assign its
rights and obligations under this contract to any third party, or sublease, pledge or allow any third party to use or possess the lease
properties. For any early termination of the contract initiated by MingZhu, MingZhu agreed to pay all the outstanding payments under the
contract, including any delay penalties, liquidation damages, taxes and insurance payments.
Share Purchase Agreement
with Cheyi BVI
On December 29, 2021, we entered
into a Share Purchase Agreement with Cheyi BVI and each of shareholders of Cheyi BVI.
Pursuant to the agreement,
the total consideration for the acquisition of 100% equity ownership of Cheyi BVI was an aggregate of $23,470,712, consisting of the issuance
by the Company to the shareholders of Cheyi BVI an aggregate of 3,189,000 Company's ordinary shares (representing $6,760,680 with
$2.12 per ordinary share) and payment of $2,000,000 at closing, and Year-2021 earnout payment of $8,826,019 and Year-2022 earnout payment
of $5,884,013 if Cheyi BVI's audited net income for its fiscal year 2021 and 2022 is no less than U.S. $3,000,000 respectively.
The two earnout payments are due 13 months upon the delivery of Cheyi BVI's audited financial statements.
On December 31, 2021, the parties
completed the transaction. Upon the closing of the transaction, we acquired 100% shares outstanding of the Cheyi BVI, and we issued 3,189,000
ordinary shares and paid $2,000,000 to the sellers.
Share Purchase Agreement
with Yinhua
On March 14, 2022, we entered
into a Share Purchase Agreement with Yinhua which develops and operates a comprehensive auto related service platform to serve auto insurance
companies, and each of the shareholders of the Yinhua.
Under terms of the share purchase
agreement, we agreed to pay $10,076,600 in exchange for 100% equity of Yinhua. Of the total consideration to be paid, $7,078,100 was paid
in the form of 3,826,000 newly issued ordinary shares of the Company, representing $1.85 per ordinary share of the Company, and $1,000,000
in cash upon closing. In addition, a cash earnout of $1,998,500 shall be paid if Yinhua achieves a net income target threshold of $1.3
million during the calendar year of 2022.
111
On March 18, 2022, the parties
completed the transaction. Upon the closing of the transaction, we acquired 100% of the outstanding shares of the Yinhua, and we issued
3,826,000 ordinary shares and paid $1,000,000 in cash to the sellers.
We have not entered into any
material contracts other than in the ordinary course of business and other than those described in this annual report.
Share Purchase Agreement
with Feipeng BVI
On December 21, 2022, we entered
into a Share Purchase Agreement with Feipeng BVI which provides regional trucking services, and each of the shareholders of the Feipeng
BVI. , pursuant to which, among other things and subject to the terms and conditions contained therein, we acquired 100% of Feipeng BVI
for approximately $14,540,436, of which US $9,550,000 will be paid in cash upon closing in form of cash. Feipeng BVI shall receive a certain
number of shares valued at $4,990,436 if it achieves a targeted net income of US$2.4 million during the calendar year 2023.
Under terms of the share purchase
agreement, we agreed to pay $14,540,436 in exchange for 100% equity of Feipeng BVI. Of the total consideration to be paid, $9,550,000
was paid in the form of cash, and $1,000,000 in cash upon closing. In addition, Feipeng BVI shall receive a certain number of shares valued
at $4,990,436 if it achieves a targeted net income of US$2.4 million during the calendar year 2023.
On December 21, 2022, the parties
completed the transaction. Upon the closing of the transaction, we acquired 100% of the outstanding shares of the Feipeng BVI, and we
paid $9,550,000 in cash to the sellers.
We have not entered into any
material contracts other than in the ordinary course of business and other than those described in this annual report.
10.D. Exchange Controls
British Virgin Islands
There are currently no exchange
control regulations in the British Virgin Islands applicable to us or our shareholders.
The PRC
China regulates foreign currency
exchanges primarily through the following rules and regulations:
●
Foreign Currency Administration Rules of 1996, as amended; and
●
Administrative Rules of the Settlement, Sale and Payment of Foreign Exchange of 1996.
As we disclosed in the risk
factors above, Renminbi is not a freely convertible currency at present. Under the current PRC regulations, conversion of Renminbi is
permitted in China for routine current-account foreign exchange transactions, including trade and service related foreign exchange transactions,
payment of dividends and service of foreign debts. Conversion of Renminbi for most capital-account items, such as direct investments,
investments in PRC securities markets and repatriation of investments, however, is still subject to the approval of SAFE.
Pursuant to the above-mentioned
administrative rules, foreign-invested enterprises may buy, sell and/or remit foreign currencies for current account transactions at banks
in China with authority to conduct foreign exchange business by complying with certain procedural requirements, such as presentment of
valid commercial documents. For capital-account transactions involving foreign direct investment, foreign debts and outbound investment
in securities and derivatives, approval from SAFE is a pre-condition. Capital investments by foreign-invested enterprises outside China
are subject to limitations and requirements in China, such as prior approvals from the PRC Ministry of Commerce or SAFE.
10.E. Taxation
The following summary contains
a description of certain Cayman Islands and U.S. federal income tax consequences of the acquisition, ownership and disposition of securities,
but it does not purport to be a comprehensive description of all the tax considerations that may be relevant to a decision to purchase
securities. The summary is based upon the tax laws of the Cayman Islands and regulations thereunder and on the tax laws of the United
States and regulations thereunder as of the date hereof, which are subject to change.
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Prospective investors should
consult their professional advisers on the possible tax consequences of buying, holding or selling any shares under the laws of their
country of citizenship, residence or domicile.
Cayman Islands Taxation
The following is a discussion
on certain Cayman Islands income tax consequences of an investment in the Shares. The discussion is a general summary of the present law,
which is subject to prospective and retroactive change. It is not intended as tax advice, does not consider any investor's particular
circumstances, and does not consider tax consequences other than those arising under Cayman Islands law.
Under Existing Cayman Islands Laws
The Cayman Islands currently
levies no taxes in on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature
of inheritance tax or estate duty. There are no other taxes levied by the Government of the Cayman Islands that are likely to be material
to holders of ordinary shares except for stamp duties which may be applicable on instruments executed in, or brought within the jurisdiction
of the Cayman Islands. The Cayman Islands is not party to any double tax treaties. There are no exchange control regulations or currency
restrictions in the Cayman Islands.
Pursuant to Section 6 of the
Tax Concessions Act (Revised) of the Cayman Islands, the Company has obtained an undertaking from the Financial Secretary of the Cayman
Islands:
(a)
that no Law which is hereafter enacted in the Islands imposing any tax to be levied on profits, income, gains or appreciations shall apply to us or our operations; and
(b)
in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax shall be payable:
(i)
on or in respect of the shares, debentures or other obligations of our company; or
(ii)
by way of the withholding in whole or part, of any relevant payment as defined in Section 6(3) of the Tax Concessions Law (2018 Revision).
These concessions shall be
for a period of 20 years from March 22, 2018.
People's Republic of China Taxation
Under the Enterprise Income
Tax Law, an enterprise established outside the PRC with a "de facto management body" within the PRC is considered a PRC resident
enterprise for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide
income as well as tax reporting obligations. Under the Implementation Rules, a "de facto management body" is defined as a
body that has material and overall management and control over the manufacturing and business operations, personnel and human resources,
finances and properties of an enterprise
In addition, SAT Circular 82,
which was issued in April 2009 and partially abolished on December 29, 2017, specifies that certain offshore-incorporated enterprises
controlled by PRC enterprises or PRC enterprise groups will be classified as non-domestically-registered resident enterprises if all of
the following conditions are met: (a) senior management personnel and core management departments in charge of the daily operations of
the enterprises have their presence mainly in the PRC; (b) their financial and human resources decisions are subject to determination
or approval by persons or bodies in the PRC; (c) major assets, accounting books and company seals of the enterprises, and minutes and
files of their board's and shareholders' meetings are located or kept in the PRC; and (d) half or more of the enterprises'
directors or senior management personnel with voting rights habitually reside in the PRC. Further to SAT Circular 82, the SAT issued Announcement
of the State Administration of Taxation on Printing and Distributing the Administrative Measures for Income Tax on Chinese-controlled
Resident Enterprises Incorporated Overseas (Trial Implementation) (the "SAT Bulletin 45") on July 27, 2011, which took effect
on September 1, 2011 and was last amended on June 15, 2018, to provide more guidance on the implementation of SAT Circular 82. SAT Bulletin
45 provides for procedures and administration details of determination on PRC resident enterprise status and administration on post-determination
matters. If the PRC tax authorities determine that the Company is a PRC resident enterprise for PRC enterprise income tax purposes, a
number of unfavorable PRC tax consequences could follow. For example, the Company may be subject to enterprise income tax at a rate of
25% with respect to its worldwide taxable income. Also, a 10% withholding tax would be imposed on dividends we pay to our non-PRC enterprise
shareholders and with respect to gains derived by our non-PRC enterprise shareholders from transferring our shares or ordinary shares
and potentially a 20% of withholding tax would be imposed on dividends we pay to our non-PRC individual shareholders and with respect
to gains derived by our non-PRC individual shareholders from transferring our shares or ordinary shares.
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It is unclear whether, if
we are considered a PRC resident enterprise, holders of our shares or ordinary shares would be able to claim the benefit of income tax
treaties or agreements entered into between China and other countries or areas. See "3.D. Risk Factors — Risk Factors Related
to Doing Business in China — If we are classified as a PRC resident enterprise for PRC purposes, such classification could result
in unfavorable tax consequences to us and our non-PRC shareholders."
The SAT and the MOF issued
the Notice of Ministry of Finance and State Administration of Taxation on Several Issues relating to Treatment of Corporate Income Tax
Pertaining to Restructured Business Operations of Enterprises (the "SAT Circular 59") in April 2009, which became effective
on January 1, 2008 and was amended on December 25, 2014 and became effective from January 1, 2014. On October 17, 2017, the SAT issued
the Announcement of the State Administration of Taxation on Issues Relating to Withholding at Source of Income Tax of Non-resident Enterprises,
which became effective on December 1, 2017 and was amended on June 15, 2018 (the "SAT Circular 37"). By promulgating and implementing
the SAT Circular 59 and the SAT Circular 37, the PRC tax authorities have enhanced their scrutiny over the direct or indirect transfer
of equity interests in a PRC resident enterprise by a non-PRC resident enterprise.
Pursuant to the Arrangement
between the Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income,
or the Tax Arrangement, where a Hong Kong resident enterprise which is considered a non-PRC tax resident enterprise directly holds at
least 25% of a PRC enterprise, the withholding tax rate in respect of the payment of dividends by such PRC enterprise to such Hong Kong
resident enterprise is reduced to 5% from a standard rate of 10%, subject to approval of the PRC local tax authority.
Pursuant to the Circular of
the State Administration of Taxation on the Issues concerning the Application of the Dividend Clauses of Tax Agreements ("Circular
81"), a resident enterprise of the counter-party to such Tax Arrangement should meet the following conditions, among others, in
order to enjoy the reduced withholding tax under the Tax Arrangement: (i) it must directly own the required percentage of equity interests
and voting rights in such PRC resident enterprise; and (ii) it should directly own such percentage in the PRC resident enterprise anytime
in the 12 months prior to receiving the dividends. Furthermore, pursuant to the Announcement of the State Taxation Administration on Promulgation
of the Administrative Measures on Entitlement of Non-resident Taxpayers to Tax Treaty Benefits (or Circular 35) which was issued on October
14, 2019 and became effective from January 1, 2020, non-resident taxpayers claiming tax treaty benefits shall adopt the method of "making
independent judgement, declaring claims and retaining the relevant materials for future inspection". Where a non-resident taxpayer
deems that it satisfies the criteria for entitlement to tax treaty benefits, it may, at the time of filing tax return or making withholding
declaration through a withholding agent, enjoy tax treaty benefits, and simultaneously compile and retain the relevant materials pursuant
to the provisions of this circular for future inspection, and be subject to follow-up administration by the tax authorities. There are
also other conditions to qualify for such a reduced withholding tax rate according to other relevant tax rules and regulations. Accordingly,
MingZhu HK may be able to enjoy the 5% withholding tax rate for the dividends it receives from the wholly foreign-owned enterprises, if
it satisfies the conditions prescribed under Circular 81 and other relevant tax rules and regulations, and obtains the approvals as required
under the Administrative Measures. However, according to Circular 81, if the relevant tax authorities consider the transactions or arrangements
we have are for the primary purpose of enjoying a favorable tax treatment, the relevant tax authorities may adjust the favorable withholding
tax in the future.
Material United States Federal Income Tax Considerations
The following is a discussion
of certain material United States federal income tax considerations relating to the acquisition, ownership, and disposition of our units,
ordinary shares and warrants by a U.S. Holder, as defined below. For U.S. federal income tax purposes, the holder of a unit generally
should be treated as the owner of the underlying ordinary share and warrant components of the unit, as the case may be. As a result,
the discussion below with respect to actual holders of ordinary shares and warrants should also apply to holders of units (as the deemed
owners of the underlying ordinary shares and warrants that comprise the units). This discussion applies only to securities that are held
as capital assets for U.S. federal income tax purposes, is applicable only to holders who purchased units in this offering and assumes
any distributions on our ordinary shares will be paid in U.S. dollars. This discussion is based on existing United States federal income
tax law, which is subject to differing interpretations or change, possibly with retroactive effect. No ruling has been sought from the
Internal Revenue Service (the "IRS") with respect to any United States federal income tax consequences described below, and
there can be no assurance that the IRS or a court will not take a contrary position. This discussion does not address all aspects of
United States federal income taxation that may be important to particular investors in light of their individual circumstances, including
investors subject to special tax rules (such as, for example, certain financial institutions, insurance companies, regulated investment
companies, real estate investment trusts, broker-dealers, traders in securities that elect mark-to-market treatment, partnerships (or
other entities treated as partnerships for United States federal income tax purposes) and their partners, tax-exempt organizations (including
private foundations)), investors who are not U.S. Holders, investors that own (directly, indirectly, or constructively) 5% or more of
our voting shares, investors that hold their ordinary shares as part of a straddle, hedge, conversion, constructive sale or other integrated
transaction), or investors that have a functional currency other than the U.S. dollar, all of whom may be subject to tax rules that differ
significantly from those summarized below. In addition, this discussion does not address any tax laws other than the United States federal
income tax laws, including any state, local, alternative minimum tax or non-United States tax considerations, or the Medicare tax on
unearned income. Each potential investor is urged to consult its tax advisor regarding the United States federal, state, local and non-United
States income and other tax considerations of an investment in our ordinary shares.
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General
For purposes of this discussion,
a "U.S. Holder" is a beneficial owner of our ordinary shares that is, for United States federal income tax purposes, (i) an
individual who is a citizen or resident of the United States, (ii) a corporation (or other entity treated as a corporation for United
States federal income tax purposes) created in, or organized under the laws of, the United States or any state thereof or the District
of Columbia, (iii) an estate the income of which is includible in gross income for United States federal income tax purposes regardless
of its source, or (iv) a trust (A) the administration of which is subject to the primary supervision of a United States court and which
has one or more United States persons who have the authority to control all substantial decisions of the trust or (B) that has otherwise
elected to be treated as a United States person under the Code.
If a partnership (or other
entity treated as a partnership for United States federal income tax purposes) is a beneficial owner of our ordinary shares, the tax treatment
of a partner in the partnership will depend upon the status of the partner and the activities of the partnership. Partnerships and partners
of a partnership holding our ordinary shares are urged to consult their tax advisors regarding an investment in our ordinary shares.
The discussion set forth below
is addressed only to U.S. Holders that purchase ordinary shares in this offering. Prospective purchasers are urged to consult their own
tax advisors about the application of U.S. federal income tax law to their particular circumstances as well as the state, local, foreign
and other tax consequences to them of the purchase, ownership and disposition of our ordinary shares.
Allocation of Purchase
Price and Characterization of a Unit
No statutory, administrative
or judicial authority directly addresses the treatment of a unit or instruments similar to a unit for U.S. federal income tax purposes
and, therefore, that treatment is not entirely clear. The acquisition of a unit should be treated for U.S. federal income tax purposes
as the acquisition of one ordinary share and one warrant to acquire one ordinary share. For U.S. federal income tax purposes, each
holder of a unit must allocate the purchase price paid by such holder for such unit between the one ordinary share and the warrant based
on the relative fair market value of each at the time of purchase. Under U.S. federal income tax law, each investor must make his or her
own determination of such value based on all the relevant facts and circumstances. Therefore, we strongly urge each investor to consult
his or her tax adviser regarding the determination of value for these purposes. The price allocated to each ordinary share and the warrant
should be the shareholder's tax basis in such share or warrant, as the case may be. Any disposition of a unit should be treated
for U.S. federal income tax purposes as a disposition of the ordinary share and the warrant comprising the unit, and the amount realized
on the disposition should be allocated between the ordinary share and warrant based on their respective relative fair market values at
the time of disposition (as determined by each such unit holder based on all relevant facts and circumstances). The separation of the
ordinary share and the warrant comprising a unit should not be a taxable event for U.S. federal income tax purposes.
The foregoing treatment of
the ordinary shares and warrants and a holder's purchase price allocation are not binding on the IRS or the courts. Because there
are no authorities that directly address instruments that are similar to the units, no assurance can be given that the IRS or the courts
will agree with the characterization described above or the discussion below. Accordingly, each prospective investor is urged to consult
its own tax advisors regarding tax consequences of an investment in a unit (including alternative characterizations of a unit). The balance
of this discussion assumes that the characterization of the units described above is respected for U.S. federal income tax purposes.
Taxation of Dividends
and Other Distributions on our Ordinary Shares
Subject to the passive foreign
investment company rules discussed below, distributions of cash or other property made by us to you with respect to the ordinary shares
(including the amount of any taxes withheld therefrom) will generally be includable in your gross income as dividend income on the date
of receipt by you, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined
under U.S. federal income tax principles). With respect to corporate U.S. Holders, the dividends will not be eligible for the dividends-received
deduction allowed to corporations in respect of dividends received from other U.S. corporations.
115
With respect to non-corporate
U.S. Holders, including individual U.S. Holders, dividends will be taxed at the lower capital gains rate applicable to qualified dividend
income, provided that (1) the ordinary shares are readily tradable on an established securities market in the United States, or we are
eligible for the benefits of an approved qualifying income tax treaty with the United States that includes an exchange of information
program, (2) we are not a passive foreign investment company (as discussed below) for either our taxable year in which the dividend is
paid or the preceding taxable year, and (3) certain holding period requirements are met. You are urged to consult your tax advisors regarding
the availability of the lower rate for dividends paid with respect to our ordinary shares, including the effects of any change in law
after the date of this annual report.
To the extent that the amount
of the distribution exceeds our current and accumulated earnings and profits (as determined under U.S. federal income tax principles),
it will be treated first as a tax-free return of your tax basis in your ordinary shares, and to the extent the amount of the distribution
exceeds your tax basis, the excess will be taxed as capital gain. We do not intend to calculate our earnings and profits under U.S. federal
income tax principles. Therefore, a U.S. Holder should expect that a distribution will be treated as a dividend even if that distribution
would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above.
Taxation of Dispositions
of Ordinary Shares
Subject to the passive foreign
investment company rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of
a share equal to the difference between the amount realized (in U.S. dollars) for the share and your tax basis (in U.S. dollars) in the
ordinary shares. The gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder, including an individual U.S. Holder,
who has held the ordinary shares for more than one year, you may be eligible for reduced tax rates on any such capital gains. The deductibility
of capital losses is subject to limitations.
Exercise, Lapse or Redemption
of a Warrant
Subject to the PFIC rules
discussed below and except as discussed below with respect to the cashless exercise of a warrant, a U.S. holder generally will not recognize
gain or loss on the exercise of a warrant. A U.S. holder's tax basis in an ordinary share received upon exercise of the warrant
generally will be an amount equal to the sum of the U.S. holder's initial investment in the warrant (which will equal the portion
of the U.S. holder's purchase price for the units that is allocated to the warrant, as described above) and the exercise price of
such warrant. The U.S. holder's holding period for an ordinary share received upon exercise of the warrant will begin on the date
following the date of exercise (or possibly the date of exercise) of the warrants and will not include the period during which the U.S.
holder held the warrants. If a warrant is allowed to lapse unexercised, a U.S. holder generally will recognize a capital loss equal to
such holder's tax basis in the warrant.
The tax consequences of a
cashless exercise of a warrant are not clear under current law. A cashless exercise may not be taxable, either because the exercise is
not a realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. In either situation,
a U.S. holder's tax basis in the ordinary shares received generally will equal the U.S. holder's tax basis in the warrant.
If the cashless exercise was not a realization event, it is unclear whether a U.S. holder's holding period for the ordinary shares
acquired pursuant to the exercise of such warrant will commence on the date of exercise of the warrant or the day following the date of
exercise of the warrant. If the cashless exercise were treated as a recapitalization, the holding period of the ordinary shares will generally
include the holding period of the warrant. It is also possible that a cashless exercise may be treated as a taxable exchange in which
gain or loss would be recognized because a U.S. holder may be deemed to have surrendered a portion of its warrants in a taxable transaction
to pay the exercise price for the balance of its warrants that are treated as exercised for U.S. federal income tax purposes. In such
event, a U.S. holder would recognize capital gain or loss in an amount equal to the difference between the exercise price for the total
number of warrants treated as exercised and the U.S. holder's tax basis in the warrants deemed surrendered. In this case, a U.S.
holder's tax basis in the ordinary shares received would equal the U.S. holder's tax basis in the warrants treated as exercised
plus the exercise price of such warrants. It is unclear whether a U.S. holder's holding period for the ordinary shares would commence
on the date of exercise of the warrants or the day following the date of exercise of the warrants.
Due to the absence of authority
on the U.S. federal income tax treatment of a cashless exercise, there can be no assurance which, if any, of the alternative tax consequences
and holding periods described above would be adopted by the IRS or a court of law. Accordingly, U.S. holders should consult their tax
advisors regarding the tax consequences of a cashless exercise.
Subject to the PFIC rules
described below, if we redeem warrants for cash or if we purchase warrants in an open market transaction, such redemption or purchase
generally will be treated as a taxable disposition to the U.S. holder.
116
Possible Constructive
Distributions
The terms of each warrant
provide for an adjustment to the number of ordinary shares for which the warrant may be exercised or to the exercise price of the warrant
in certain events. An adjustment which has the effect of preventing dilution generally is not taxable. The U.S. holders of the warrants
would, however, be treated as receiving a constructive distribution from us if, for example, the adjustment increases the warrant holders'
proportionate interest in our assets or earnings and profits (e.g., through an increase in the number of ordinary shares that would be
obtained upon exercise) as a result of a distribution of cash to the holders of our ordinary shares which is taxable to the U.S. holders
of such ordinary shares as described under "— Taxation of Dividends and Other Distributions" above. Such constructive
distribution would be subject to tax as described under that section in the same manner as if the U.S. holders of the warrants received
a cash distribution from us equal to the fair market value of such increased interest. For certain information reporting purposes, we
are required to determine the date and amount of any such constructive distributions. Proposed Treasury regulations, which we may rely
on prior to the issuance of final regulations, specify how the date and amount of constructive distributions are determined.
Passive Foreign Investment
Company ("PFIC")
If we are a PFIC for your
taxable year(s) during which you hold ordinary shares, you will be subject to special tax rules with respect to any "excess distribution"
that you receive and any gain you realize from a sale or other disposition (including a pledge) of the ordinary shares, unless you make
a "mark-to-market" election as discussed below. Distributions you receive in a taxable year that are greater than 125% of
the average annual distributions you received during the shorter of the three preceding taxable years or your holding period for the ordinary
shares will be treated as an excess distribution. Under these special tax rules:
●
the excess distribution or gain will be allocated ratably over your holding period for the ordinary shares;
●
the amount allocated to your current taxable year, and any amount allocated to any of your taxable year(s) prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and
●
the amount allocated to each of your other taxable year(s) will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.
The tax liability for amounts
allocated to years prior to the year of disposition or "excess distribution" cannot be offset by any net operating losses
for such years, and gains (but not losses) realized on the sale of the ordinary shares cannot be treated as capital, even if you hold
the ordinary shares as capital assets.
A U.S. Holder of "marketable
stock" (as defined below) in a PFIC may make a mark-to-market election for such stock to elect out of the tax treatment discussed
above. If you make a mark-to-market election for the first taxable year during which you hold (or are deemed to hold) ordinary shares
and for which we are determined to be a PFIC, you will include in your income each year an amount equal to the excess, if any, of the
fair market value of the ordinary shares as of the close of such taxable year over your adjusted basis in such ordinary shares, which
excess will be treated as ordinary income and not capital gain. You are allowed an ordinary loss for the excess, if any, of the adjusted
basis of the ordinary shares over their fair market value as of the close of the taxable year. However, such ordinary loss is allowable
only to the extent of any net mark-to-market gains on the ordinary shares included in your income for prior taxable years. Amounts included
in your income under a mark-to-market election, as well as gain on the actual sale or other disposition of the ordinary shares, are treated
as ordinary income. Ordinary loss treatment also applies to any loss realized on the actual sale or disposition of the ordinary shares,
to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such ordinary shares.
Your basis in the ordinary shares will be adjusted to reflect any such income or loss amounts. If you make a valid mark-to-market election,
the tax rules that apply to distributions by corporations which are not PFICs would apply to distributions by us, except that the lower
applicable capital gains rate for qualified dividend income discussed above under "— Taxation of Dividends and Other Distributions
on our Ordinary Shares" generally would not apply.
The mark-to-market election
is available only for "marketable stock", which is stock that is traded in other than de minimis quantities on at least 15
days during each calendar quarter ("regularly traded") on a qualified exchange or other market (as defined in applicable
U.S. Treasury regulations), including Nasdaq. If the ordinary shares are regularly traded on Nasdaq and if you are a holder of ordinary
shares, the mark-to-market election would be available to you were we to be or become a PFIC.
117
Alternatively, a U.S. Holder
of stock in a PFIC may make a "qualified electing fund" election with respect to such PFIC to elect out of the tax treatment
discussed above. A U.S. Holder who makes a valid qualified electing fund election with respect to a PFIC will generally include in gross
income for a taxable year such holder's pro rata share of the corporation's earnings and profits for the taxable year. However,
the qualified electing fund election is available only if such PFIC provides such U.S. Holder with certain information regarding its earnings
and profits as required under applicable U.S. Treasury regulations. We do not currently intend to prepare or provide the information that
would enable you to make a qualified electing fund election. If you hold ordinary shares in any taxable year in which we are a PFIC, you
will be required to file IRS Form 8621 in each such year and provide certain annual information regarding such ordinary shares, including
regarding distributions received on the ordinary shares and any gain realized on the disposition of the ordinary shares. In addition,
a U.S. holder may not make a "qualified electing fund" election with respect to its warrants to acquire our ordinary shares.
As a result, if a U.S. holder sells or otherwise disposes of such warrants (other than upon exercise of such warrants), any gain recognized
generally will be subject to the special tax and interest charge rules treating the gain as an excess distribution, if we were a PFIC
at any time during the period the U.S. holder held the warrants.
If you do not make a timely
"mark-to-market" election (as described above), and if we were a PFIC at any time during the period you hold our ordinary
shares, then such ordinary shares will continue to be treated as stock of a PFIC with respect to you even if we cease to be a PFIC in
a future year, unless you make a "purging election" for the year we cease to be a PFIC. A "purging election" creates
a deemed sale of such ordinary shares at their fair market value on the last day of the last year in which we are treated as a PFIC. The
gain recognized by the purging election will be subject to the special tax and interest charge rules treating the gain as an excess distribution,
as described above. As a result of the purging election, you will have a new basis (equal to the fair market value of the ordinary shares
on the last day of the last year in which we are treated as a PFIC) and holding period (which new holding period will begin the day after
such last day) in your ordinary shares for tax purposes.
You are urged to consult your
tax advisors regarding the application of the PFIC rules to your investment in our ordinary shares and the elections discussed above.
Information Reporting and Backup Withholding
Dividend payments with respect
to our ordinary shares and proceeds from the sale, exchange or redemption of our ordinary shares may be subject to information reporting
to the IRS and possible U.S. backup withholding. 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 IRS 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 IRS 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
IRS and furnishing any required information. We do not intend to withhold taxes for individual shareholders. However, transactions effected
through certain brokers or other intermediaries may be subject to withholding taxes (including backup withholding), and such brokers or
intermediaries may be required by law to withhold such taxes.
Under the Hiring Incentives
to Restore Employment Act of 2010, certain U.S. Holders are required to report information relating to our ordinary shares, subject to
certain exceptions (including an exception for ordinary shares held in accounts maintained by certain financial institutions), by attaching
a completed IRS Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which they hold ordinary
shares.
10.F. Dividends and Paying Agents
Not Applicable.
10.G. Statement by Experts
Not Applicable.
118
10.H. Documents on Display
We have previously filed with
the SEC our registration statements on Form F-1 (File Number 333-253950) and Form 20-F for the fiscal year ended December 31, 2020.
We are subject to the periodic
reporting and other informational requirements of the Exchange Act. Under the Exchange Act, we are required to file reports and other
information with the SEC. Specifically, we are required to file annually a Form 20-F within four months after the end of each fiscal year.
Copies of reports and other information, when so filed, may be inspected without charge and may be obtained at prescribed rates at the
public reference facilities maintained by the SEC at Judiciary Plaza, 100 F Street, N.E., Washington, D.C. 20549. The public may obtain
information regarding the Washington, D.C. Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a web site
at http://www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants that make electronic
filings with the SEC using its EDGAR system. As a foreign private issuer, we are exempt from the rules of the Exchange Act prescribing,
among other things, the furnishing and content of proxy statements to shareholders, and our executive officers, directors and principal
shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.
10.I. Subsidiary Information
Not Applicable.
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Financial instruments that
expose us to concentrations of credit risk primarily consist of cash and accounts receivables. The maximum amount of loss due to credit
risk in the event of other parties failing to perform their obligations is represented by the carrying amount of each financial asset
as stated in our consolidated balance sheets.
We are exposed to various
types of market risks, including changes in foreign exchange rates, commodity prices and inflation in the normal course of business.
Interest rate risk
Our market risk is affected
by changes in interest rates. Historically, we have used a combination of fixed rate and variable rate obligations to manage our interest
rate exposure. Fixed rate obligations expose us to the risk that interest rates might fall. Variable rate obligations expose us to the
risk that interest rates might rise. We currently do not have any interest rate swaps although we may enter into such swaps in the future.
We are exposed to variable
interest rate risk principally from our existing term loan facility and our existing revolving credit facility. We are exposed to fixed
interest rate risk principally from equipment notes and mortgages. As of December 31, 2022, we had bank borrowings totaling $10,862,622
comprised of $10,862,622 variable rate borrowings and $nil fixed rate borrowings.
As of December
31, 2021, we had bank borrowings totaling $8,866,082 comprised of $8,866,082 variable rate borrowings and $nil fixed rate borrowings.
Accordingly, holding other variables constant (including borrowing levels), the Group's interest rate risk is mainly concentrated
on the fluctuation of interest rates quoted by The People's Bank of China arising from the Company's RMB denominated bank
borrowings. If interest rates had been one percentage point higher/lower and all other variables were held constant, our profit for the
year ended December 31, 2022, 2021 and 2020 would decrease/increase by approximately $90,000, $18,000 and $18,000, respectively. Management
believes that the influence of such change has no material impact on the Company's consolidated financial statements.
119
Foreign exchange risk
While our reporting currency
is the U.S. dollar, almost all of our consolidated revenues and consolidated costs and expenses are denominated in RMB. Most of our assets
are denominated in RMB. As a result, we are exposed to foreign exchange risk as our revenues and results of operations may be affected
by fluctuations in the exchange rate between the U.S. dollar and RMB. If the RMB depreciates against the U.S. dollar, the value of our
RMB revenues, earnings and assets as expressed in our U.S. dollar financial statements will decline. We have not entered into any hedging
transactions in an effort to reduce our exposure to foreign exchange risk.
Liquidity Risk
We are also exposed to liquidity
risk which is the risk that we will be unable to provide sufficient capital resources and liquidity to meet our commitments and business
needs. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, we will
turn to other financial institutions and related parties to obtain short-term funding to cover any liquidity shortage.
Credit Risk
Credit risk is controlled
by the application of credit approvals, limits and monitoring procedures. We manage credit risk through in-house research and analysis
of the Chinese economy and the underlying obligors and transaction structures. We identify credit risk collectively based on industry,
geography and customer type. In measuring the credit risk of our sales to our customers, we mainly reflect the "probability of default"
by the customer on its contractual obligations and consider the current financial position of the customer and the current and likely
future exposures to the customer.
Other risks
In addition to the risks described
above, in December 2019, a strain of coronavirus (also known as COVID- 19) was reported to have surfaced in Wuhan, Hubei Province, China.
At this point, the extent to which the coronavirus may impact our results is uncertain. However, any outbreak of a contagious disease,
or other adverse public health developments, could have a material adverse effect on our business operations by disrupting our ability
to purchase raw materials, impacting the demand for some of our products, disrupting our ability to sell and/or distribute products, and/or
temporarily closing our facilities or the facilities of our suppliers or customers and their contract manufacturers, or restricting our
ability to travel to support our sites or our customers around the world, any of which would likely impact our sales and operating results.
ITEM
12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Not Applicable.
120
PART II
ITEM
13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
Not Applicable.
ITEM
14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
On October 21, 2020, the Company
completed its IPO of 3,000,000 ordinary shares at a public offering price of US$4.00 per share.
On October 30, 2020, the underwriter
and sole book-runner of the Company's underwritten IPO, exercised the partial over-allotment option and purchased an additional
350,000 ordinary shares of the Company at the IPO price of US$4.00 per share.
On December 4, 2020, the underwriter
and sole book-runner of the Company's underwritten IPO, further exercised the partial over-allotment option and purchased an additional
4,040 ordinary shares of the Company at the IPO price of US$4.00 per share.
With the above IPO and over-allotments,
the Company received total net proceeds of $10,958,803 after deducting underwriting commission and other expenses.
On March 12, 2021, the Company
closed a direct public offering of 3,333,335 Units, with each Unit consisting of (i) one ordinary share of the Company, par value $0.001
per share, and (ii) one warrant to purchase 0.75 ordinary share. The Company sold the Units at a price of $6.00 per Unit. The Company
received gross proceeds from the Offering, before deducting estimated offering expenses payable by the Company, of approximately $18,000,000.
On April 21, 2021, the underwriter
and sole book-runner of our underwritten IPO, exercised its partial warrant and purchased a total of 214,286 ordinary shares of the Company
with no cash in consideration.
On June 14, 2021, the underwriter
and sole book-runner of our underwritten IPO, exercised its partial warrant and purchased a total of 43,616 ordinary shares of the Company
with no cash in consideration.
We have used the net proceeds
from such offerings in the manner as disclosed in our registration statement on Form F-1 (File Number 333-253950).
On December 31, 2021, we acquired
100% shares outstanding of the Cheyi BVI, and we issued 3,189,000 ordinary shares and paid $2,000,000 to the sellers.
On March 18, 2022, we acquired
100% shares outstanding of the Yinhua, and we issued 3,826,000 ordinary shares and paid $1,000,000 to the sellers.
On December 21, 2022, we acquired
100% shares outstanding of the Feipeng BVI, and we paid $9,550,000 to the sellers.
The Company has 22,960,277
ordinary shares outstanding as of the date of this annual report.
ITEM 15. CONTROLS AND PROCEDURES
(a)
Disclosure Controls and Procedures
Our management, with the participation
of our chief executive officer and chief financial officer, has performed an evaluation of the effectiveness of our disclosure controls
and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report, as required by
Rule 13a-15(b) under the Exchange Act.]
Based upon that evaluation,
our management has concluded that, due to the outstanding material weakness described below, as of December 31, 2022, our disclosure controls
and procedures were not effective in ensuring that the information required to be disclosed by us in the reports that we file and furnish
under the Exchange Act was recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and
forms, and that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated
and communicated to our management, including our chief executive officer and chief financial officer, to allow timely decisions regarding
required disclosure.
121
(b)
Management's 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 Exchange Act of 1934, as amended. Our internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance
with Generally Accepted Accounting Principles (GAAP) in the United States of America and includes those policies and procedures that
(1)
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company;
(2)
provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with GAAP, and that receipts and expenditures of our company are being made only in accordance with authorizations of our management and directors; and
(3)
provide reasonable assurance regarding prevention or timely detection of the unauthorized acquisition, use or disposition of our company's assets that could have a material effect on the consolidated financial statements.
This annual report does not
include a report of management's assessment regarding internal control over financial reporting or an attestation report by our
independent registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.
(c)
Attestation Report of Independent Registered Public Accounting Firm
As a company with less than
US$1.07 billion in revenue for our last fiscal year, we qualify as an "emerging growth company" pursuant to the JOBS Act,
and are eligible to take advantage of certain exemptions from various reporting and financial disclosure requirements that are applicable
to other public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley
Act of 2002, related to the assessment of the effectiveness of the emerging growth company's internal control over financial reporting.]
(d)
Changes in Internal Control over Financial Reporting
In connection with the audits
of our consolidated financial statements included in this annual report, we and our independent registered public accounting firm identified
one "material weakness" in our internal control over financial reporting, as defined in the standards established by the PCAOB,
and other control deficiencies. A "material weakness" is a deficiency, or a combination of deficiencies, in internal control
over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial
statements will not be prevented or detected on a timely basis.
The material weakness identified
relates to our lack of sufficient skilled staff with U.S. GAAP and SEC reporting knowledge for the purpose of financial reporting as well
as the lack of formal accounting policies and procedures manual to ensure proper financial reporting in accordance with U.S. GAAP and
SEC reporting requirements.
Because of the material weakness
described above, our management has concluded that we had not maintain effective internal control over financial reporting as of December
31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
(e)
Remediation Initiatives
To remedy our identified material
weakness in connection with preparation of our consolidated financial statements, we plan to adopt several measures to improve our internal
control over financial reporting, including (i) hiring additional accounting personnel with experience in U.S. GAAP and SEC reporting
requirements, and (ii) providing more regular training on an ongoing basis to our accounting personnel that cover a broad range of accounting
and financial reporting topics.
Other than as described above,
no changes in our internal controls over financial reporting occurred during the period covered by this annual report that have materially
affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
Our management has worked,
and will continue to work to strengthen our internal controls over financial reporting. There were no other changes in our internal control
over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial
reporting.
122
ITEM 16. RESERVED
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Mikael Charette, Yuzhou Wang
and To Wai Suen serve as members of our Audit Committee. Mr. Suen serves as the chair of the Audit Committee. Each of our Audit Committee
members satisfy the "independence" requirements of the Nasdaq listing rules and meet the independence standards under Rule
10A-3 under the Exchange Act. We have determined that Mr. Suen possesses accounting or related financial management experience that qualifies
her as an "audit committee financial expert" as defined by the rules and regulations of the SEC. Our Audit Committee oversees
our accounting and financial reporting processes and the audits of our financial statements. Our Audit Committee performs several functions,
including:
●
evaluating the independence and performance of, and assesses the qualifications of, our independent auditor, and engages such independent auditor;
●
approving the plan and fees for the annual audit, quarterly reviews, tax and other audit-related services, and approves in advance any non-audit service to be provided by the independent auditor;
●
monitoring the independence of the independent auditor and the rotation of partners of the independent auditor on our engagement team as required by law;
●
reviewing the financial statements to be included in our Annual Report on Form 20-F and Current Reports on Form 6-K and reviews with management and the independent auditors the results of the annual audit and reviews of our quarterly financial statements;
●
overseeing all aspects of our systems of internal accounting control and corporate governance functions on behalf of the board;
●
reviewing and approving in advance any proposed related-party transactions and report to the full Board on any approved transactions; and
●
providing oversight assistance in connection with legal, ethical and risk management compliance programs established by management and our board of directors, including Sarbanes-Oxley Act implementation, and makes recommendations to our board of directors regarding corporate governance issues and policy decisions.
ITEM
16B. CODE OF ETHICS
We have adopted a code of
ethics that applies to all of our executive officers, directors and employees in accordance with the rules of Nasdaq and the SEC. The
code of ethics codifies the business and ethical principles that govern all aspects of our business. We filed a copy of our Code of Ethics
as Exhibit 14 to our Registration Statement declared effective on March 9, 2021 (File Number 333-253950). You can review these documents
by accessing our public filings at the SEC's website at
www.sec.gov.
123
ITEM
16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table sets forth
the aggregate fees by the categories specified below in connection with certain professional services rendered by our independent registered
public accounting firm, for the periods indicated. We did not pay any other fees to our auditors during the periods indicated below.
For the Fiscal Years Ended
December 31,
2022
2021
Audit Fees
$
140,000
$
113,000
Audit-Related Fees
30,000
-
Tax Fees
-
-
All Other Fees
-
-
Total
$
170,000
$
113,000
Audit fees represent the aggregate
fees billed for professional services rendered by our independent registered public accounting firms for the audit of our annual financial
statements and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements
for those fiscal years. We dismissed Friedman LLP on May 17, 2021 and we had appointed Audit Alliance LLP as successor auditor of the
Company on May 17, 2021 and for the fiscal years ended December 31, 2021 and 2022.
The policy of our audit committee
is to pre-approve all audit and non-audit services provided by our independent registered public accounting firms, including audit services
and audit-related services as described above, other than those for de minimis services which are approved by the Audit Committee prior
to the completion of the audit.
ITEM
16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not Applicable.
ITEM
16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
Not Applicable.
124
ITEM
16F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM
16G. CORPORATE GOVERNANCE
As a Cayman Islands company
listed on the Nasdaq Capital Market, we are subject to the Nasdaq Capital Market corporate governance listing standards. However, Nasdaq
Capital Market rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain
corporate governance practices in the Cayman Islands, which is our home country, may differ significantly from the Nasdaq Capital Market
corporate governance listing standards. We intend to follow the following home country practices in lieu of the Nasdaq Listing Rules as
follows:
●
Nasdaq Listing Rule 5605(b)(1) requires listed companies to have, among other things, a majority of its board members be independent. As a foreign private issuer, however, we are permitted to, and we may follow home country practice in lieu of the above requirements, or we may choose to comply with the above requirement within one year of listing. The corporate governance practice in our home country, the Cayman Islands, does not require a majority of our board to consist of independent directors. Currently, a majority of our board members are independent.
●
We do not intend to follow Nasdaq's requirements regarding shareholder approval for certain issuances of securities under Nasdaq Listing Rule 5635. Under our Memorandum and Articles of Association, our board of directors is authorized to issue securities including in connection with certain events such as the acquisition of shares or assets of another company, the establishment of or amendments to equity-based compensation plans for employees, a change of control of us, rights issues at or below market price, certain private placements and issuance of convertible notes, and the issuance of 20% or more of our outstanding ordinary shares.
Other than those described
above, there are no significant differences between our corporate governance practices and those followed by U.S. domestic companies under
Nasdaq Capital Market corporate governance listing standards. We may in the future decide to use the foreign private issuer exemption
with respect to some or all the other Nasdaq corporate governance rules. As a result, our shareholders may be afforded less protection
than they otherwise would under the Nasdaq corporate governance listing standards applicable to U.S. domestic issuers. We may utilize
these exemptions for as long as we continue to qualify as a foreign private issuer.
ITEM
16H. MINE SAFETY DISCLOSURE
Not applicable.
ITEM
16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.
Not applicable.
125
PART III
ITEM
17. FINANCIAL STATEMENTS
Not applicable.
ITEM
18. FINANCIAL STATEMENTS
The consolidated financial
statements and related notes required by this item are contained on pages F-1 through F-43.
ITEM
19. EXHIBITS
EXHIBIT INDEX
Exhibit No.
Description of document
2.4**
Description of Securities
3.1*
Memorandum of Association of the Registrant (incorporated herein by reference to Exhibit 3.1 to the registration statement on Form F-1 (File No. 333-233992https://www.sec.gov/cgi-bin/browse-edgar?filenum=333-233992&action=getcompany), as amended, initially filed with the SEC on September 27, 2019).
3.2*
Articles
    of Association of the Registrant (incorporated herein by reference to Exhibit 3.2 to the registration statement on Form F-1 (File
    No. 333-233992https://www.sec.gov/cgi-bin/browse-edgar?filenum=333-233992&action=getcompany), as amended, initially filed with
    the SEC on September 27, 2019).
3.3*
Amended and Restated Memorandum of Association of the Registrant (incorporated herein by reference to Exhibit 3.3 to the registration statement on Form F-1 (File No. 333-233992https://www.sec.gov/cgi-bin/browse-edgar?filenum=333-233992&action=getcompany), as amended, initially filed with the SEC on September 27, 2019).
4.1*
Form of Underwriters' Warrant (incorporated herein by reference to Exhibit 4.1 to the registration statement on Form F-1 (File No. 333-233992https://www.sec.gov/cgi-bin/browse-edgar?filenum=333-233992&action=getcompany), as amended, initially filed with the SEC on September 27, 2019).
4.2*
Form of Investors Warrant filed as Exhibit 4.2 to the Registrant's Form F-1 filed with the Commission on March 5, 2021 (File number 333-253950)
4.3*
Form of Placement Agent's Warrant. filed as Exhibit 4.3 to the Registrant's Form F-1 filed with the Commission on March 5, 2021 (File number 333-253950)
8.1**
List of Subsidiaries of the Registrant
10.1*
Share Purchase Agreement, dated as of March 14, 2022, by and among Mingzhu Logistic Holdings Limited, YINHUA (BVI) LIMITED and sellers named therein filed as Exhibit 10.1 to the Form 6-K filed with the SEC on March 18, 2022.
10.2*
Lock-up Agreement dated March 14, 2022 filed as Exhibit 10.2 to the Form 6-K filed with SEC on March 18, 2022.
10.3*
Non-Competition and Non-Solicitation Agreement dated March 14, 2022 filed as Exhibit 10.3 to the Form 6-K filed with SEC on March 18, 2022.
10.4*
Share Purchase Agreement, dated as of December 21, 2022, by and among Mingzhu Logistic Holdings Limited, Feipeng Global Limited, and sellers named therein, filed as Exhibit 10.1 to the Form 6-K filed with SEC on December 23, 2022.
10.5*
Non-Competition and Non-Solicitation Agreement dated December 21, 2022, filed as Exhibit 10.2 to the Form 6-K filed with SEC on December 23, 2022.
126
Exhibit No.
Description of document
10.6**
Master Exclusive Service Agreement, dated December 20, 2022, by and between Xinjiang Feipeng Logistics Co., Ltd.  and Shenzhen Feipeng Zongheng Supply Chain Management Co., Ltd.
10.7**
Business Cooperation Agreement, dated December 20, 2022, by and among Xinjiang Feipeng Logistics Co., Ltd., shareholders of Xinjiang Feipeng Logistics Co., Ltd., Shenzhen Feipeng Zongheng Supply Chain Management Co., Ltd. and Shareholders named therein.
10.8**
Equity Interest Pledge Agreement, dated December 20, 2022, by and between Xinjiang Feipeng Logistics Co., Ltd., Shenzhen Feipeng Zongheng Supply Chain Management Co., Ltd. and Pledgors named therein.
10.9**
Exclusive Option Agreement, dated December 20, 2022, by and among Xinjiang Feipeng Logistics Co., Ltd., shareholders of Xinjiang Feipeng Logistics Co., Ltd. and Shenzhen Feipeng Zongheng Supply Chain Management Co., Ltd.
10.10**
Proxy Agreement, dated December 20, 2022, by and among Xinjiang Feipeng Logistics Co., Ltd., shareholders of Xinjiang Feipeng Logistics Co., Ltd.  and Shenzhen Feipeng Zongheng Supply Chain Management Co., Ltd.
10.11**
Letter of Confirmation and Undertaking, dated December 20, 2022, by shareholders of Xinjiang Feipeng Logistics Co., Ltd.
10.12**
Master Exclusive Service Agreement, dated January 22, 2022, by and between Hainan Zhisheng Automobile Services Co., Ltd. and Zhejiang Caiyunlian Technology Co., Ltd.
10.13**
Business Cooperation Agreement, dated January 22, 2022, by and among Hainan Zhisheng Automobile Services Co., Ltd., shareholders of Hainan Zhisheng Automobile Services Co., Ltd. and Zhejiang Caiyunlian Technology Co., Ltd.
10.14**
Equity Interest Pledge Agreement, dated January 22, 2022, by and between Hainan Zhisheng Automobile Services Co., Ltd., Zhejiang Caiyunlian Technology Co., Ltd, and Pledgors named therein.
10.15**
Exclusive Option Agreement, dated January 22, 2022, by and among Hainan Zhisheng Automobile Services Co., Ltd., shareholders of Hainan Zhisheng Automobile Services Co., Ltd. and Zhejiang Caiyunlian Technology Co., Ltd.
10.16**
Proxy Agreement, dated January 22, 2022, by and among Hainan Zhisheng Automobile Services Co., Ltd., shareholders of Hainan Zhisheng Automobile Services Co., Ltd. and Zhejiang Caiyunlian Technology Co., Ltd.
10.17**
Letter of Confirmation and Undertaking, dated January 22, 2022, by shareholders of Hainan Zhisheng Automobile Services Co., Ltd.
10.18**
Consent Letter, dated January 22, 2022, by spouse of shareholder of Hainan Zhisheng Automobile Services Co., Ltd.
11*
Code of Ethics of the Registrant, filed as Exhibit 14 to the Registrant's Form F-1 filed with the Commission on March 5, 2021 (File number 333-253950)
12.1**
CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2**
CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1***
CEO Certificate Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2***
CFO Certificate Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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 (embedded within the Inline XBRL document)
*
Previously Filed as indicated and incorporated by reference.
**
Filed herewith.
***
Furnished herewith.
127
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.
MINGZHU LOGISTICS HOLDINGS LIMITED
/s/ Jinlong Yang
Name:
Jinlong Yang
Title:
Chief Executive Officer and Director
Date: May 16, 2023
128
MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED
FINANCIAL STATEMENTS
Table
of content
Page(s)
Consolidated Financial Statements
Reports of Independent Registered Public Accounting Firms (PCAOB firm ID#3481)
F-2
Consolidated Balance Sheets as of December 31, 2022 and 2021
F-3
Consolidated Statements of Income (Loss) and
    Comprehensive Income (Loss) for the Years Ended December 31, 2022, 2021 and 2020
F-4
Consolidated Statements of Changes in Shareholders' Equity for the Years Ended December 31, 2022, 2021 and 2020
F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2021 and 2020
F-6
Notes to the Consolidated Financial Statements
F-7 – F-43
F-
1
AUDIT
  ALLIANCE LLP
®
A Top 18 Audit Firm
10 Anson Road, #20-16 International Plaza, Singapore
  079903.
UEN: T12LL1223B
GST Reg No: M90367663E
Tel: (65) 6227 5428
Website:
www.allianceaudit.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the Board of Directors of MingZhu Logistics Holdings Limited
Opinion on the Financial Statements
We have audited the accompanying consolidated
balance sheets of MingZhu Logistics Holdings Limited and its subsidiaries (collectively, the "Company") as of December 31,
2022 and 2021, the related consolidated statements of (loss) income and comprehensive (loss) income, shareholders' equity, and cash
flows for the years then ended, and the related notes to the consolidated financial statements and schedule (collectively, the financial
statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company
as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the years ended December 31, 2022 and 2021,
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
audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance
with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit 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 audit 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 audit 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 audit provides a reasonable basis for our opinion.
Very truly yours,
/s/
Audit Alliance LLP
Audit Alliance LLP
We have served as the Company's auditor since 2021.
Singapore
May 16, 2023
PCAOB ID Number
3481
F-
2
MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of
December 31,
2022
As of
December 31,
2021
USD
USD
Restatement
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
5,687,311
$
5,752,117
Accounts receivable, net
19,127,321
3,650,005
Prepayments
7,339,861
5,473,938
Other receivables
2,795,843
1,540,044
Loans receivable
28,622,704
22,487,767
Amount due from related parties
2,677,345
705,280
Total current assets
66,250,385
39,609,151
NON-CURRENT ASSET
Property and equipment, net
9,073,698
12,224,582
Deferred tax assets
238,237
35,491
Deposits
2,657,126
10,327,872
Goodwill
33,237,409
14,157,570
Total non-current asset
45,206,470
36,745,515
Total assets
$
111,456,855
$
76,354,666
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank borrowings
$
10,022,335
$
7,579,324
Accounts and notes payable
10,134,535
1,344,532
Other payables and accrued liabilities
29,054,674
19,269,124
Amount due to related parties
6,108,866
294,344
Tax payable
5,278,436
3,133,294
Current maturities of long-term bank borrowings
586,935
269,009
Current portion of capital lease and financing obligations
757,088
2,267,248
Current maturities of loans from other financial institutions
-
144,126
Total current liabilities
61,942,869
34,301,001
NON-CURRENT LIABILITIES
Long-term bank borrowings
253,352
179,339
Long-term portion of capital lease and financing obligations
1,158,642
200,712
Total non-current liabilities
1,411,994
380,051
Total liabilities
63,354,863
34,681,052
SHAREHOLDERS' EQUITY
Ordinary shares: $
0.001
par value,
50,000,000
shares authorized,
22,960,277
and
19,134,277
shares issued and outstanding as of December 31, 2022 and 2021, respectively*
22,960
19,134
Share subscription receivables
(
847,086
)
(
847,086
)
Additional paid-in capital
41,734,546
35,796,751
Statutory reserves
1,036,841
916,148
Retained earnings
7,704,538
5,929,043
Accumulated other comprehensive loss
(
1,549,807
)
(
140,376
)
Total shareholders' equity
48,101,992
41,673,614
Total liabilities and shareholders' equity
$
111,456,855
$
76,354,666
*
Giving retroactive effect to the re-denomination and nominal issuance of shares effected on February 12, 2020, and the surrender and cancellation of shares effected on May 21, 2020.
The accompanying notes are an integral part of
these consolidated financial statements.
F-
3
MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND
COMPREHENSIVE (LOSS) INCOME
For the Year Ended
December 31,
2022
2021
2020
USD
USD
USD
REVENUES
$
114,073,803
$
17,358,914
$
18,793,951
COSTS AND EXPENSES
Costs of revenues
104,766,355
15,428,131
16,010,644
General and administrative expenses
5,646,443
2,050,954
1,321,412
Sales and marketing expenses
784,653
367,633
50,083
Total costs and expenses
111,197,451
17,846,718
17,382,139
INCOME (LOSS) FROM OPERATIONS
2,876,352
(
487,804
)
1,411,812
OTHER (EXPENSES) INCOME
Interest expenses
(
1,430,978
)
(
396,188
)
(
374,048
)
Other expenses
(
927,568
)
(
360,032
)
(
65,828
)
Other income
1,908,424
441,025
176,802
Total other expenses, net
(
450,122
)
(
315,195
)
(
263,074
)
INCOME (LOSS) BEFORE INCOME TAXES
2,426,230
(
802,999
)
1,148,738
PROVISION FOR INCOME TAXES
530,042
135,414
366,442
NET INCOME (LOSS)
1,896,188
(
938,413
)
782,296
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment
(
1,409,431
)
(
640,974
)
752,828
COMPREHENSIVE INCOME (LOSS)
$
486,757
$
(
1,579,387
)
$
1,535,124
Weighted average shares used in computation:
Basic*
21,429,877
19,035,038
9,629,783
Diluted*
20,885,442
15,237,432
9,633,993
EARNINGS PER SHARE - BASIC*
$
0.09
$
(
0.05
)
$
0.08
EARNINGS PER SHARE - DILUTED*
$
0.09
$
(
0.06
)
$
0.08
*
Giving retroactive effect to the re-denomination and nominal issuance of shares effected on February 12, 2020, and the surrender and cancellation of shares effected on May 21, 2020.
The accompanying notes are an integral part of
these consolidated financial statements.
F-
4
MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS'
EQUITY
Shares*
Amount
Share
Subscription
Receivables
Additional
Paid-in
Capital
Statutory
Reserve
Retained
Earnings
Accumulated
Other
Comprehensive
(Loss)
Income
Total
USD
USD
USD
USD
USD
USD
USD
BALANCE, December 31, 2019
9,000,000
$
9,000
$
(
847,086
)
$
4,115,638
$
760,475
$
6,240,833
$
(
252,230
)
$
10,026,630
Issuance of shares through initial public offering
3,354,040
3,354
-
10,955,449
-
-
-
10,958,803
Capitalization of listing expenses
-
-
-
(
1,246,267
)
-
-
-
(
1,246,267
)
Net income for the year
-
-
-
-
-
782,296
-
782,296
Foreign currency translation adjustment
-
-
-
-
-
-
752,828
752,828
Appropriation to statutory reserves
-
-
-
-
117,411
(
117,411
)
-
-
BALANCE, December 31, 2020
12,354,040
$
12,354
$
(
847,086
)
$
13,824,820
$
877,886
$
6,905,718
$
500,598
$
21,274,290
Issuance of shares
6,780,237
6,780
-
21,971,931
-
-
-
21,978,711
Net (loss) for the year
-
-
-
-
-
(
938,413
)
-
(
938,413
)
Foreign currency translation adjustment
-
-
-
-
-
-
(
640,974
)
(
640,974
)
Appropriation to statutory reserves
-
-
-
-
38,262
(
38,262
)
-
-
BALANCE, December 31, 2021
19,134,277
$
19,134
$
(
847,086
)
$
35,796,751
$
916,148
$
5,929,043
$
(
140,376
)
$
41,673,614
Net income for the year
-
-
-
-
-
1,896,188
-
1,896,188
Foreign currency translation adjustment
-
-
-
-
-
-
(
1,409,431
)
(
1,409,431
)
Appropriation to statutory reserves
-
-
-
-
120,693
(
120,693
)
-
-
Issuance of shares for acquisition
3,826,000
3,826
-
5,937,795
-
-
-
5,941,621
BALANCE, December 31, 2022
22,960,277
$
22,960
$
(
847,086
)
$
41,734,546
$
1,036,841
$
7,704,538
$
(
1,549,807
)
$
48,101,992
*
Giving retroactive effect to the re-denomination and nominal issuance of shares effected on February 12, 2020, and the surrender and cancellation of shares effected on May 21, 2020.
The accompanying notes are an integral part of
these consolidated financial statements.
F-
5
MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Year Ended December 31,
2022
2021
2020
USD
USD
USD
Reclassification
Cash flows from operating activities:
Net income (loss)
$
1,896,188
$
(
938,413
)
$
782,296
Adjustments to reconcile net income to net cash provided (used in) by operating activities:
Loss (Gain) on disposals of equipment
679,635
(
25,070
)
(
17,761
)
Provision for doubtful accounts
804,613
140,204
82,647
Written-off of allowance for doubtful accounts
-
136,602
-
Amortization of deferred financing fees
223,904
55,640
124,401
Depreciation for property and equipment
3,844,159
1,438,310
1,519,415
Deferred income tax (benefit) expenses
(
202,746
)
(
2,832
)
(
10,381
)
Changes in operating assets and liabilities
Accounts receivable
(
3,257,814
)
1,633,476
5,842,238
Prepayments
4,678,337
(
3,838,690
)
644,525
Other receivables
7,531,718
3,444,875
466,187
Loans receivable
(
16,621,319
)
(
11,070,827
)
(
10,653,588
)
Deposits
(
1,313,871
)
(
9,470,731
)
(
189,430
)
Accounts and notes payable
4,207,620
(
874,843
)
(
240,887
)
Other payables and accrued liabilities
(
7,766,999
)
(
2,989,501
)
412,064
Tax payables
1,342,620
(
1,422,362
)
348,065
Net cash used in operating activities
(
3,953,955
)
(
23,784,162
)
(
890,209
)
Cash flows from investing activities:
Purchases of equipment
(
12,243
)
(
199,481
)
(
156,029
)
Proceeds from disposal of equipment
24,906
-
-
Cash from acquisition of subsidiary
2,714,240
1,477,065
-
Net cash provided by (used in) by investing activities
2,726,903
1,277,584
(
156,029
)
Cash flows from financing activities:
Proceeds from short-term bank borrowings
21,212,202
6,665,840
6,604,675
Repayment of short-term bank borrowings
(
18,631,203
)
(
7,433,187
)
(
3,041,105
)
Proceeds from long-term bank borrowings
444,345
465,059
-
Repayment of long-term bank borrowings
(
92,594
)
(
22,146
)
(
1,129,747
)
Repayments of loans from other financial institutions
(
136,492
)
(
300,279
)
(
274,929
)
Repayments of obligations under capital leases
(
597,533
)
(
98,972
)
(
980,244
)
Amounts advanced from related parties
1,258,130
)
6,787,477
10,238,023
Repayments to related parties
(
2,663,598
)
(
7,864,254
)
(
10,062,100
)
Proceeds from initial public offering
-
-
10,958,803
Proceeds from private placement
-
18,465,009
-
Net cash provided by financing activities
793,257
16,664,547
12,313,376
Effect of exchange rate change on cash
368,989
(
11,477
)
114,980
Net increase (decrease) in cash, cash equivalents and restricted cash
(
64,806
)
(
5,853,508
)
11,382,118
Cash, cash equivalents and restricted cash at beginning of the year
5,752,117
11,605,625
223,507
Cash, cash equivalents and restricted cash at end of the year
$
5,687,311
$
5,752,117
$
11,605,625
Supplemental disclosure of cash flow information:
Interest paid
$
456,127
$
396,187
$
310,675
Income tax paid
$
249,732
$
1,435,366
$
108,207
Supplemental non-cash investing and financing information:
Non-cash capital leases to acquire revenue equipment
$
-
$
102,054
$
44,628
Uncollected receivable from disposal of revenue equipment
$
-
$
175,215
$
73,817
Reconciliation to amounts on consolidated balance sheets:
Cash
$
5,624,695
$
5,673,656
$
2,105,625
Cash equivalents
62,616
78,461
-
Restricted cash
-
-
9,500,000
Total cash
$
5,687,311
$
5,752,117
$
11,605,625
The accompanying notes are an integral part of
these consolidated financial statements.
F-
6
MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(In U.S. Dollars, unless stated otherwise)
Note 1 – Nature of business and organization
MingZhu Logistics Holdings Limited ("MingZhu
Cayman") is a holding company incorporated in the Cayman Islands on January 2, 2018 under the laws of the Cayman Islands. The Company
are engaged in various businesses through our subsidiaries and controlled entities in China.
Reorganization
A reorganization of the Company's legal
structure was completed on April 13, 2018. The reorganization involved the incorporation of MingZhu Cayman, and its wholly-owned subsidiaries,
MingZhu BVI, and MingZhu HK; and the transfer of all equity ownership of Shenzhen Yangang Mingzhu Freight Industry Co., Ltd ("MingZhu")
to MingZhu HK from the former shareholders of MingZhu. In consideration of the transfer, the Company issued
1,000
shares of the Company
with par value $
0.001
(HKD
0.01
) per share to the former shareholders of MingZhu.
On April 13, 2018, the former shareholders transferred
their
100
% ownership interest in MingZhu to MingZhu HK, which is
100
% owned by MingZhu Cayman through MingZhu BVI. After the reorganization,
MingZhu Cayman owns
100
% equity interests of MingZhu BVI, MingZhu HK and MingZhu. The controlling shareholder of MingZhu Cayman is same
as of MingZhu prior to the reorganization.
MingZhu was incorporated on July 10, 2002 in Shenzhen,
Guangdong under the laws of the PRC. Shenzhen Pengcheng Shengshi Logistics Co., Ltd. ("MingZhu Pengcheng"), a company providing
trucking services, was incorporated on April 7, 2010 in Shenzhen, Guangdong under the laws of the PRC. Prior to the reorganization, MingZhu
and MingZhu Pengcheng were under common control. On November 10, 2017, for the purpose of reorganization so that the business of the Company
could be rearranged to be under a common holding company, the entire equity interest of MingZhu Pengcheng was transferred to MingZhu.
These two transactions were between entities under
common control, and therefore accounted for in a manner similar to the pooling of interest method. Under the pooling-of-interests method,
combination between two businesses under common control is accounted for at carrying amounts with retrospective adjustment of prior period
financial statements, and the equity accounts of the combining entities are combined and the difference between the consideration paid
and the net assets acquired is reflected as an equity transaction (i.e., distribution to parent company). As opposed to the purchase method
of accounting, no intangible assets are recognized in the transaction, and no goodwill is recognized as a result of the combination.
On September 5, 2018, MingZhu HK established its
wholly-owned subsidiary, Shenzhen Yangang Mingzhu Supply Chain Management Co., Ltd ("MingZhu Management"), a PRC company.
MingZhu Management engages in providing transportation and supply chain management services.
With the effect of resolutions passed by board
of directors on February 12, 2020, the authorized number of ordinary shares increased from
38,000,000
to
50,000,000
with a par value of
$
0.001
instead of HKD
0.01
and the issued number of ordinary shares increased from
1,000
to
9,250,000
with a par value of $
0.001
instead
of HKD
0.01
. With the effect of resolution passed by board of directors on May 21, 2020, the issued number of ordinary shares decreased
from
9,250,000
to
9,000,000
. As of the date hereof, the authorized number of ordinary shares is
50,000,000
with a par value of $
0.001
and the issued number of ordinary shares is
9,000,000
.
On October 21, 2020, the Company completed the
initial public offering ("IPO") of
3,000,000
ordinary shares at a public offering price of US$
4.00
per share.
On October 30, 2020, the underwriter and sole
book-runner of our underwritten IPO, exercised the partial over-allotment option and purchased an additional
350,000
ordinary shares of
the Company at the IPO price of US$
4.00
per share.
On December 4, 2020, the underwriter and sole
book-runner of our underwritten IPO, further exercised the partial over-allotment option and purchased an additional
4,040
ordinary shares
of the Company at the IPO price of US$
4.00
per share.
On March 12, 2021, the Company closed its direct
public offering of
3,333,335
units of its securities (each, a "Unit"), with each Unit consisting of (i) one ordinary share
of the Company, par value $
0.001
per share, and (ii) one warrant to purchase
0.75
ordinary share. The Company sold the Units at a price
of $
6.00
per Unit. The Company received gross proceeds from the Offering, before deducting estimated offering expenses payable by the
Company, of approximately $
18,000,000
.
On April 21, 2021, the underwriter and sole book-runner
of our underwritten IPO, exercised its partial warrant and purchased a total of
214,286
ordinary shares of the Company with no cash in
consideration.
On June 14, 2021, the underwriter and sole book-runner
of our underwritten IPO, exercised its partial warrant and purchased a total of
43,616
ordinary shares of the Company with no cash in
consideration.
F-
7
On December 29, 2021 ("Acquisition Date"),
the Company entered into a Share Purchase Agreement (the "SPA") to acquire
100
% of the equity interest of Cheyi (BVI) Limited
(the "Cheyi BVI") which operates its business through its subsidiary Zhejiang Cheyi Network Technology Co., Ltd. (the "Cheyi
Network"), an integrated online car-hailing and driver management services company. Pursuant to the agreement, the total consideration
for the acquisition of
100
% equity ownership of Cheyi BVI is an aggregate of U.S. $
23,470,712
, consisting of the issuance by the Company
to the shareholders of Cheyi BVI an aggregate of
3,189,000
fully paid Company's ordinary shares (being U.S. $
6,760,680
of $
2.12
per share) and payment of $
2,000,000
at closing, and Year-2021 earnout payment of U.S. $
8,826,019
and Year-2022 earnout payment of U.S.
$
5,884,013
if the Cheyi BVI's audited net income for its fiscal year 2021 and 2022 is no less than U.S. $
3,000,000
respectively.
The two earnout payments are due 13 months upon the delivery of Cheyi BVI's audited financial statements.
The transaction was accounted for in accordance
with the provisions of ASC 805-10, Business Combinations. The values assigned in these financial statements represent management's
best estimate of fair values as of the Acquisition Date.
As required by ASC 805-20, Business Combinations
– Identifiable Assets and Liabilities, and Any Noncontrolling Interest, management conducted a review to reassess whether they identified
all the assets acquired and all the liabilities assumed, and followed ASC 805-20's measurement procedures for recognition of the
fair value of net assets acquired. According to ASC 820, the fair value hierarchy gives the highest priority to unadjusted quoted prices
in active markets as the most reliable fair value measurement, and the lowest priority to unobservable inputs. According to ASC 820-10-35-41,
the valuation of shares issued in the acquisitions and purchase consideration is recognized on the quoted trading price of the Company's
ordinary shares on the date of acquisitions. The quoted closing prices for the Company's ordinary shares on NASDAQ on the dates
of the acquisitions of Cheyi BVI was $
2.12
per share.
The following table summarizes the allocation
of estimated fair values of net assets acquired and liabilities assumed:
Recognized amounts of identifiable assets acquired and liabilities
Accounts receivable, net
$
216,572
Prepayments
575,913
Others receivable
4,761,164
Equipment, net
9,980,931
Deferred tax assets
10
Deposits
595,149
Short-term bank borrowings
(
1,647,679
)
Accounts and notes payable
(
803,784
)
Others payable and accrued liabilities
(
1,631,610
)
Tax payable
(
1,859,485
)
Capital lease and financing obligations
(
2,351,104
)
Total identifiable net assets
7,836,077
Add: Goodwill
14,157,570
Total purchase price for acquisition net of $
1,477,065
of cash
$
21,993,647
On March 14, 2022, the Company entered into a
Share Purchase Agreement with Yinhua which develops and operates a comprehensive auto related service platform to serve auto insurance
companies, and each of the shareholders of the Yinhua.
Under terms of the share purchase agreement, we
shall pay $
10,076,600
in exchange for
100
% equity of Yinhua. Of the total consideration to be paid, $
7,078,100
shall be paid in form of
3,826,000
newly issued ordinary shares of the Company, representing $
1.85
per ordinary share of the Company, and $
1,000,000
upon closing.
In addition, a cash earnout of $
1,998,500
shall be paid if Yinhua achieves a net income target threshold of $
1.3
million during the calendar
year of 2022.
Founded in 2018, Yinhua provides diversified,
differentiated and customized value-added auto related services to auto insurance companies, where the services include road security
services, car maintenance services, car inspection services and other services. Yinhua develops and operates a comprehensive auto related
service platform for auto insurance companies combining intelligent human-vehicle interaction functions with car owner programs.
On March 18, 2022, the parties completed the transaction.
Upon the closing of the transaction, the Company acquired
100
% shares outstanding of the Yinhua, and the Company issued
3,826,000
ordinary
shares and paid $
1,000,000
to the sellers.
As required by ASC 805-20, Business Combinations
– Identifiable Assets and Liabilities, and Any Noncontrolling Interest, management conducted a review to reassess whether they identified
all the assets acquired and all the liabilities assumed, and followed ASC 805-20's measurement procedures for recognition of the
fair value of net assets acquired. According to ASC 820, the fair value hierarchy gives the highest priority to unadjusted quoted prices
in active markets as the most reliable fair value measurement, and the lowest priority to unobservable inputs. According to ASC 820-10-35-41,
the valuation of shares issued in the acquisitions and purchase consideration is recognized on the quoted trading price of the Company's
ordinary shares on the date of acquisitions. The quoted closing prices for the Company's ordinary shares on NASDAQ on the dates
of the acquisitions of Yinhua was $
1.85
per share.
F-
8
The following table summarizes the allocation
of estimated fair values of net assets acquired and liabilities assumed:
Recognized amounts of identifiable assets acquired and liabilities assumed
Accounts receivable, net
$
4,519,839
Prepayments
8,050,558
Equipment, net
3,504
Deferred tax assets
16,415
Short-term bank borrowings
(
193,339
)
Others payable and accrued liabilities
(
7,685,086
)
Tax payable
(
1,126,777
)
Total identifiable net assets
3,585,114
Goodwill
5,364,709
Total purchase price for acquisition net of $
1,126,777
of cash
$
8,949,823
On December 21, 2022, the Company entered into
a Share Purchase Agreement with Feipeng BVI which provides regional trucking services, and each of the shareholders of the Feipeng BVI,
pursuant to which, among other things and subject to the terms and conditions contained therein, the Company acquired
100
% of Feipeng
BVI for approximately $
14,540,436
, of which US $
9,550,000
will be paid in cash upon closing in form of cash. Feipeng BVI shall receive
a certain number of shares valued at $
4,990,436
if it achieves a targeted net income of US$
2.4
million during the calendar year 2023.
On December 21, 2022, the Company entered into
a Share Purchase Agreement with Feipeng BVI which provides regional trucking services, and each of the shareholders of the Feipeng BVI,
pursuant to which, among other things and subject to the terms and conditions contained therein, the Company acquired
100
% of Feipeng
BVI for approximately $
14,540,436
, of which US $
9,550,000
will be paid in cash upon closing in form of cash. Feipeng BVI shall receive
a certain number of shares valued at $
4,990,436
if it achieves a targeted net income of US$
2.4
million during the calendar year 2023.
On December 21, 2022, the parties completed the
transaction. Upon the closing of the transaction, we acquired
100
% of the outstanding shares of the Feipeng BVI, and we paid $
9,550,000
in cash to the sellers.
The following table summarizes the allocation
of estimated fair values of net assets acquired and liabilities assumed:
Recognized amounts of identifiable assets acquired and liabilities assumed
Accounts receivable, net
$
3,746,298
Prepayments
550,944
Other receivables
246,748
Equipment, net
123,446
Deposits
610,393
Accounts payable
(
1,546,037
)
Short-term bank borrowings
(
1,884,823
)
Others payable and accrued liabilities
(
1,383,077
)
Amount due to related parties
(
1,552,719
)
Tax payable
(
21,589
)
Total identifiable net liabilities
(
1,110,416
)
Goodwill
13,715,130
Total purchase price for acquisition net of $
1,935,722
of cash
$
12,604,714
The Company
has included the operating results of Feipeng BVI in its consolidated financial statements since the Acquisition Date. $
nil
in net sales
and $
nil
in net income of Feipeng BVI were included in the consolidated financial statements for the years ended December 31, 2022.
As of December 31, 2022, the authorized number
of ordinary shares is
50,000,000
with a par value of $
0.001
and the issued number of ordinary shares is
22,960,277
.
Note 2 - Restatement of Previously Issued Financial
Statements
Subsequent to filing of its Form 20-F, the Company
identified errors in its historical financial statements related to the accounting for the acquisition of Cheyi. The Company used negotiated
and agreed price of the Company's ordinary shares, which is $
4.00
per shares, for the recognition of the valuation of shares issued
in the acquisition and purchase consideration. However, the Company should have used the quoted trading price of the Company's ordinary
shares on the date of acquisitions for the valuation of shares issued in the acquisition and purchase consideration.
F-
9
The tables below summarize the effects of the
restatement on the consolidated balance sheets as of December 31, 2021. There was no impact from this restatement on the years ended prior
to December 31, 2021.
As of December 31, 2021
As Previously
Reported
Restatement
Adjustment
As Restated
Balance Sheet
Goodwill
$
20,152,890
$
(
5,995,320
)
$
14,157,570
Total non-current asset
42,740,835
(
5,995,320
)
36,745,515
Total assets
$
82,349,986
$
(
5,995,320
)
$
76,354,666
Additional paid-in capital
$
41,792,071
$
(
5,995,320
)
$
35,796,751
Total shareholders' equity
$
47,668,934
$
(
5,995,320
)
$
41,673,614
Note 3 – Summary of significant accounting
policies
Basis of presentation
The consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").
Principles of consolidation
The consolidated financial statements include
the financial statements of the Company, its subsidiaries, VIE and VIE's subsidiaries for which the Company is exercises control
and, when applicable, entities for which the Company has a controlling financial interest or the ultimate primary beneficiary.
A subsidiary is an entity in which the Company,
directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members
of the board of directors, to cast a majority of votes at the meeting of the board of directors or to govern the financial and operating
policies of the investee under a statute or agreement among the shareholders or equity holders.
All transactions and balances between the Company,
its subsidiaries, VIE and VIE's subsidiaries have been eliminated upon consolidation.
Subsidiaries are those entities in which the Company,
directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies,
to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors.
F-
10
The accompanying consolidated financial statements
reflect the activities of the Company and each of the following entities:
Name
Background
Ownership
MingZhu Investment Limited ("MingZhu BVI")
●
●
●
A British Virgin Islands company
Incorporated on January 15, 2018
A holding company
100% directly owned by MingZhu Cayman
YGMZ (Hong Kong) Limited ("MingZhu HK")
●
●
●
A Hong Kong company
Incorporated on February 2, 2018
A holding company
100% directly owned by MingZhu BVI
Shenzhen Yangang Mingzhu Freight Industry Co., Ltd ("MingZhu" or "Mingzhu")
●
●
●
A PRC limited liability company
Incorporated on July 10, 2002
Providing trucking services
100% directly owned by MingZhu HK
Shenzhen Yangang Mingzhu Supply Chain Management Co., Ltd ("MingZhu Management")
●
●
●
A PRC limited liability company
Incorporated on September 5, 2018
Transportation and supply chain management services
100% directly owned by MingZhu HK
Shenzhen Pengcheng Shengshi Logistics Co., Ltd ("MingZhu Pengcheng")
●
●
●
A PRC limited liability company
Incorporated on April 7, 2010
Providing trucking services
100% directly owned by MingZhu
Cheyi (BVI) Limited ("Cheyi BVI")
●
●
●
A British Virgin Islands company
Incorporated on September 29, 2021
A holding company
100% directly owned by MingZhu Cayman
Cheyi (Hong Kong) Limited ("Cheyi HK")
●
●
●
A Hong Kong company
Incorporated on October 22, 2021
A holding company
100% directly owned by Cheyi BVI
F-
11
Ningbo Cheyi Corporate Information Consulting Co., Ltd. ("Ningbo Cheyi" or Cheyi WFOE)
●
●
●
A PRC limited liability company
Incorporated on November 2, 2021
A holding company
100% directly owned by Cheyi HK
Zhejiang Cheyi Network Technology Co., Ltd. ("Cheyi Network")
●
●
●
A PRC limited liability company
Incorporated on December 10, 2015
An integrated online car-hailing and driver management services company
100% owned by Ningbo Cheyi via contractual arrangements
Yinhua (BVI) Limited ("Yinhua")
●
●
●
A British Virgin Islands company
Incorporated on November 12, 2021
A holding company
100% directly owned by MingZhu Cayman
Yinhua (HK) Limited ("Yinhua HK")
●
●
●
A Hong Kong company
Incorporated on December 1, 2021
A holding company
100% directly owned by Yinhua
Zhejiang Caiyunlian Technology Co. Ltd. ("Yinhua WFOE")
●
●
●
A PRC limited liability company
Incorporated on January 7, 2021
A holding company
100% directly owned by Yinhua HK
Hainan Zhisheng Automobile Services Co., Ltd. ("Zhisheng")
●
●
●
A PRC limited liability company
Incorporated on September 13, 2018
A comprehensive auto related service platform to serve auto insurance companies
100% owned by Yinhua WFOE via contractual arrangements
Feipeng Global Limited ("Feipeng BVI")
●
●
●
A British Virgin Islands company
Incorporated on March 17, 2022
A holding company
100% directly owned by MingZhu Cayman
Feipeng Enterprises (HK) Limited ("Feipeng HK")
●
●
●
A Hong Kong company
Incorporated on April 27, 2022
A holding company
100% directly owned by Feipeng BVI
Shenzhen Feipeng Zongheng Supply Chain Management Co., Ltd. ("Feipeng WFOE")
●
●
●
A PRC limited liability company
Incorporated on September 13, 2022
A holding company
100% directly owned by Feipeng HK
Xinjiang Feipeng Logistics Co., Ltd. ("Feipeng")
●
●
●
A PRC limited liability company
Incorporated on July 3, 2014
A regional trucking services provider
100% owned by Feipeng WFOE via contractual arrangements
F-
12
Use of estimates and assumptions
The preparation of consolidated financial statements
in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts
of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company's consolidated
financial statements include the useful lives of property and equipment, impairment of long-lived assets, the fair value of the reporting
unit for the goodwill impairment test, allowance for doubtful accounts, provision for contingent liabilities, revenue recognition, deferred
taxes and uncertain tax position. Actual results could differ from these estimates.
Foreign currency translation and transaction
The functional currencies of the Company are the
local currency of the country in which the subsidiaries operate. The reporting currency of the Company is the United States Dollars ("U.S.
dollar"). The results of operations and the consolidated statements of cash flows denominated in foreign currencies are translated
at the average rates of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance
sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currencies
is translated at the historical rates of exchange at the time of capital contributions. Because cash flows are translated based on the
average translation rates, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily
agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different
exchange rates from period to period are included as a separate component of accumulated other comprehensive income included in consolidated
statements of changes in shareholders' equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions
denominated in a currency other than the functional currency in the consolidated statement of income and comprehensive income.
The functional currency of entities incorporated
in Cayman and BVI is U.S. dollar. The functional currency of entities incorporated in Hong Kong is the Hong Kong dollar ("HKD").
The Company's subsidiaries with operations in PRC uses the local currency, Renminbi ("RMB"), as their functional currencies.
An entity's functional currency is the currency of the primary economic environment in which it operates, normally that is the currency
of the environment in which the entity primarily generates and expends cash. Management's judgment is essential to determine the
functional currency by assessing various indicators, such as cash flows, sales price and market, expenses, financing and inter-company
transactions and arrangements.
For the purpose of presenting the financial statements
of subsidiaries using RMB as functional currency, the Company's assets and liabilities are expressed in U.S. dollar at the exchange
rate on the balance sheet date, which is
6.8972
,
6.3726
and
6.5250
as of December 31, 2022, 2021 and 2020, respectively; shareholders'
equity accounts are translated at historical rates, and income and expense items are translated at the average exchange rate during the
period, which is
6.7290
,
6.4508
and
6.9042
for the years ended December 31, 2022, 2021 and 2020, respectively.
For the purpose of presenting the financial statements
of the subsidiary using HKD as functional currency, the Company's assets and liabilities are expressed in U.S. dollar at the exchange
rate on the balance sheet date, which is
7.8015
,
7.7996
and
7.7894
as of December 31, 2022, 2021 and 2020, respectively; shareholders'
equity accounts are translated at historical rates, and income and expense items are translated at the average exchange rate during the
period, which is
7.8306
,
7.7727
and
7.8351
for the years ended December 31, 2022, 2021 and 2020, respectively.
Cash and cash equivalents
Cash comprises of cash at banks and on hand, which
includes deposits with original maturities of three months or less with commercial banks in PRC. As of December 31, 2022 and 2021, cash
were held in accounts at financial institutions located in the PRC‚ which is not freely convertible into foreign currencies. In
addition, these balances are not covered by insurance. While management believes that these financial institutions are of high credit
quality, it also continually monitors their creditworthiness. The Company and its subsidiaries have not experienced any losses in such
accounts and do not believe the cash is exposed to any significant risk.
Restricted cash
In November 2016, the FASB issued ASU No. 2016-18,
Statement of Cash Flows (230): Restricted Cash. The amendments in this Update require that a statement of cash flows explain the change
during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents.
For public business entities, the amendments in this update are effective for fiscal years beginning after December 15, 2017, and interim
periods within those annual periods. Earlier adoption is permitted. The amendments in this Update should be applied using a retrospective
transition method to each period presented. On January 1, 2018, the Company adopted this guidance on a retrospective basis and have applied
the changes to the consolidated statement of cash flows starting from the year ended December 31, 2016.
As of December 31, 2022 and 2021, there were restricted
cash balance of $
nil
and $
nil
, respectively.
F-
13
Accounts Receivable and allowance for doubtful
accounts
Accounts receivables are stated and carried at
original invoiced amount. Accounts are considered overdue after 90 days. In establishing the required allowance for doubtful accounts,
management considers historical collection experience, aging of the receivables, the economic environment, industry trend analysis, and
the credit history and financial conditions of the customers. Management reviews its receivables on a regular basis to determine if the
bad debt allowance is adequate and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance
for doubtful accounts after all means of collection have been exhausted and that the likelihood of collection is not probable.
Operating supplies
Operating supplies consist primarily of tires
for servicing the Company's revenue equipment. Operating supplies are recorded at the lower of cost (on a first-in, first-out basis)
or net realizable value. Tires purchased as part of revenue equipment are capitalized as part of the cost of the equipment. Replacement
tires are charged to expense when placed in service.
Prepayments and Deposits
Prepayments are cash deposited or advanced to
suppliers for purchasing goods or services that have not been received or provided and deposits made to the Company's customers
and landlord. This amount is refundable and bears no interest. Prepayment and deposit are classified as either current or non-current
based on the terms of the respective agreements. These advances are unsecured and are reviewed periodically to determine whether their
carrying value has become impaired.
Other receivables
Other receivables primarily include short-term
interest-free advances made to third parties, rental receivables and receivables for disposal of equipment. Management regularly reviews
the aging of receivables and changes in payment trends and records allowances when management believes collection of amounts due are at
risk. Accounts considered uncollectable are written off against allowances after exhaustive efforts at collection are made.
Property and equipment, net
Property and equipment are stated at cost net
of accumulated depreciation and impairment. Depreciation is provided over the estimated useful lives of the assets using the straight-line
method from the time the assets are placed in service, after considering the estimated residual value which is
5
% of costs. Estimated
useful lives are as follows:
Classification
Estimated
Useful Life
Buildings and improvements
10
years
Computer and office equipment
3
-
5
years
Revenue equipment– trucking*
5
years
Revenue equipment – car-hailing and driver management services **
6
years
*
Revenue equipment – trucking are trucks and trailers only used for providing trucking services.
**
Revenue equipment –car-hailing and driver management services are passenger cars only used for providing car-hailing and driver management services.
The cost and related accumulated depreciation
of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of
income and comprehensive income. Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets,
are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets,
are capitalized. The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant
revised estimates of useful lives.
We sell and lease back certain of our revenue
equipment for obtaining working capital. As a result of our continued involvement, for accounting purposes in accordance with ASC 606-10-55-68,
these sale and leaseback transactions are considered a financing rather than a sale. Therefore, for purposes of our Consolidated Balance
Sheets, as of December 31, 2022 and 2021, $
757,088
and $
2,267,248
was recorded to "Current portion of capital lease and financing
obligations", respectively; $
1,158,642
and $
200,712
was recorded to "Long-term portion of capital lease and financing obligations",
respectively.
F-
14
Leases
The Company accounts for all significant leases
as either operating or capital. At lease inception, if the lease meets any of the following four criteria, the Company will classify it
as a capital lease: (a) transfer of ownership to lessee at the end of the lease term, (b) bargain purchase option, (c) lease term is equal
to
75
% or more of the estimated economic life of the leased property, or (d) the present value of the minimum lease payments is
90
% or
more of the fair value of the leased asset. Otherwise, the lease will be treated as an operating lease.
Impairment of long-lived assets
Long-lived assets, including property and equipment
are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that
will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the
recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment
loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition
of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company will reduce the carrying
amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable
market values. For the years ended December 31, 2022, 2021 and 2020, no impairment of long-lived assets was recognized.
Fair Value Measurement
The accounting standard regarding fair value of
financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial
instruments held by the Company.
The accounting standards define fair value, establish
a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures.
The three levels of the fair value hierarchy are as follows:
●
Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
●
Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.
●
Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.
Financial instruments included in current assets
and current liabilities are reported in the consolidated balance sheets at face value or cost, which approximate fair value because of
the short period of time between the origination of such instruments and their expected realization and their current market rates of
interest.
Interest rates that are currently available to
the Company for issuance of long-term debt and capital lease with similar terms and remaining maturities are used to estimate the fair
value of the Company's long-term debt. The fair value of the Company's long-term debt approximated the carrying value at December
31, 2022 and 2021, as the weighted average interest rate on these long-term debt approximates the market rate for similar debt.
Share subscription receivables
Share subscription receivables represent unpaid
capital contribution from the Company's shareholders.
Claims accruals
With respect to cargo loss and auto liability,
the Company maintains insurance coverage to protect it from certain business risks. Claims accruals represent the uninsured portion of
pending claims including estimates of adverse development of known claims, plus an estimated liability for incurred but not reported claims.
Upon settling claims and expenses associated with claims where it has third party coverage, the Company is generally required to initially
fund payment to the claimant and seek reimbursement from the insurer.
F-
15
The Company shall be responsible for any loss
or damages to the goods entrusted to it or any loss or damage or personal injury happened in the course of the Company's provision
of relevant trucking services. As at the date of this report the Company maintained an adequate insurance coverage in relation to the
trucking services to be delivered to its customers and third-party liability. The Company has also maintained sufficient workers'
compensation for its employees.
Revenue Recognition
For the year ended December 31, 2022, revenues
are mainly generated from provision of trucking services, car-hailing and driver management services and car owner services. All revenues
are accounted for under ASC Topic 606, Revenue from Contracts with Customers ("ASC 606"). The Company recognizes revenue when
it satisfies a performance obligation by transferring control over a product or service to a customer. The amount of revenue recognized
reflects the consideration the Company expects to be entitled to in exchange for such products or services.
Revenues under ASC 606
The core principle of the ASC 606 is that an entity
should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration
to which the entity expects to be entitled in exchange for those goods or services. The Company elected the modified retrospective method
which required a cumulative adjustment to retained earnings instead of retrospectively adjusting prior periods. The adoption of ASC 606
did not have material impact on the Company's consolidated financial statements.
The management have determined that revenue recognition
over the transit period provides a reasonable estimate of the provision of services to our customers as our obligation is performed over
the transit period.
We utilize independent contractors in the performance
of certain services. While various ownership arrangements may exist for the equipment utilized to perform these services, revenue is generated
from the same base of customers. We evaluate whether our performance obligation is a promise to transfer services to the customer (as
the principal) or to arrange for services to be provided by another party (as the agent) using a control model. Our evaluation determined
that we are in control of establishing the transaction price, managing all aspects of the services process and taking the risk of failure
of provision of services. Based on our evaluation of the control model, we determined that all of our major businesses act as the principal
rather than the agent within their revenue arrangements and such revenues are reported on a gross basis.
The Company applies the practical expedient in
ASC 606 that permits the Company not to disclose the aggregate amount of transaction price allocated to performance obligations that are
unsatisfied as of the end of the period as the Company's contracts have an expected length of one year or less. The Company also
applies the practical expedient in ASC 606 that permits the recognition of incremental costs of obtaining contracts as an expense when
incurred if the amortization period of such costs is one year or less.
The Company's performance obligations represent
the transaction price allocated to future reporting periods for services started but not completed at the reporting date. This includes
the unbilled amounts and accrued costs for services provision in transit.
Disaggregated information of revenues by types
are as follows:
2022
2021
2020
Trucking services
$
36,461,921
$
17,358,914
$
18,793,951
Car-hailing and driver management services
50,558,733
-
-
Car owner services
27,053,149
-
-
Total revenues
$
114,073,803
$
17,358,914
$
18,793,951
The revenue derived from car owner services are
primarily provided by the Yinhua and its subsidiaries, which is acquired by the Company on March 14, 2022. In accordance with the ASC-805,
the Company only is able to account the revenue generated by Yinhua and its subsidiaries after the acquisition is completed. The Company
had carefully evaluated the amount of such revenue generated by Yinhua and its subsidiaries with reasonable estimates.
On December 21, 2022, the Company acquired Feipeng
BVI and its subsidiaries which provide regional trucking services. The revenue generated by Feipeng BVI and its subsidiaries for the year
ended December 31, 2022 is immaterial and hence no revenue is accounted in the consolidated financial statements for the year ended December
31, 2022.
F-
16
Transportation costs
The transportation costs primarily consist of
fuel expenses, highway bridge expenses, insurance expenses, drivers' wages, maintenance and repairs expenses, subcontractor fees,
depreciation expenses and other expenses.
Costs of car-hailing and driver management
services
The costs of car-hailing and driver management
services mainly include depreciation expenses, repair and maintenance expenses, labor wages and insurance expenses.
Costs of car owner services
The costs of car owner services mainly include
technical services expenses and subcontractor fees.
Sales and marketing expenses
Sales and marketing expenses primarily include
advertising costs. Advertising costs are expensed as incurred and amounted to $
784,653
, $
367,633
and $
50,083
for the years ended December
31, 2022, 2021 and 2020, respectively.
Employee benefit
The full-time employees of the Company are entitled
to staff welfare benefits including medical care, housing fund, pension benefits, unemployment insurance and other welfare, which are
government mandated defined contribution plans. The Company is required to accrue for these benefits based on certain percentages of the
employees' respective salaries, subject to certain ceilings, in accordance with the relevant PRC regulations, and make cash contributions
to the state-sponsored plans out of the amounts accrued. Total expenses for the plans were $
847,666
, $
31,145
and $
29,100
for the years
ended December 31, 2022, 2021 and 2020, respectively.
Value added taxes
The Company is subject to value added tax ("VAT").
Revenue from provision of trucking services, car-hailing and driver management services and car owner services are generally subject to
VAT at the rate of 9%, 6% and 6%.
The Company is entitled to a refund for VAT already paid on goods and services purchased. The VAT balance
is recorded in tax payables on the audited consolidated balance sheets. Revenues are presented net of applicable VAT.
Income taxes
The Company accounts for income taxes in accordance
with the laws of the relevant tax authorities. The charge for taxation is based on the results for the fiscal year as adjusted for items,
which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance
sheet date.
Deferred taxes are accounted for using the asset
and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities
in the consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle,
deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it
is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated
using tax rates that are expected to apply to the period when the asset is realized, or the liability is settled. Deferred tax is charged
or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred
tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it
is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for
in accordance with the laws of the relevant taxing authorities.
An uncertain tax position is recognized as a benefit
only if it is "more likely than not" that the tax position would be sustained in a tax examination, with a tax examination
being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than
50
% likely of being realized
on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded. No penalties and
interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred.
Comprehensive income (loss)
Comprehensive income (loss) consists of two components,
net income (loss) and other comprehensive income (loss). Other comprehensive (loss) income refers to revenue, expenses, gains and losses
that under GAAP are recorded as an element of shareholders' equity but are excluded from net income. Other comprehensive income
(loss) consists of a foreign currency translation adjustment resulting from the Company not using the U.S. dollar as its functional currencies.
F-
17
Earnings per share
The Company computes earnings per share ("EPS")
in accordance with ASC 260, "Earnings per Share". ASC 260 requires companies to present basic and diluted EPS. Basic EPS is
measured as net income divided by the weighted average ordinary shares outstanding for the period. Diluted EPS presents the dilutive effect
on a per share basis of the potential ordinary shares (e.g., convertible securities, options and warrants) as if they had been converted
at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e.,
those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the years ended
December 31, 2022, 2021 and 2020, the diluted EPS was
0.09
, -
0.06
and
0.08
, respectively.
Statutory Reserves
Pursuant to the laws applicable to the PRC, PRC
entities must make appropriations from after-tax profit to the non-distributable "statutory surplus reserve fund". Subject
to certain cumulative limits, the "statutory surplus reserve fund" requires annual appropriations of 10% of after-tax profit
until the aggregated appropriations reach 50% of the registered capital (as determined under accounting principles generally accepted
in the PRC ("PRC GAAP") at each year-end). For foreign invested enterprises and joint ventures in the PRC, annual appropriations
should be made to the "reserve fund". For foreign invested enterprises, the annual appropriation for the "reserve fund"
cannot be less than 10% of after-tax profits until the aggregated appropriations reach 50% of the registered capital (as determined under
PRC GAAP at each year-end). If the Company has accumulated loss from prior periods, the Company is able to use the current period net
income after tax to offset against the accumulate loss.
Commitments and Contingencies
In the normal course of business, the Company
is subject to contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters,
such as government investigations and tax matters. The Company recognizes a liability for such contingency if it determines it is probable
that a loss has occurred, and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments
including historical and the specific facts and circumstances of each matter.
Segment Reporting
Before the completion of acquisition of Cheyi
BVI, Yinhua and Feipeng BVI
The Company's chief operating decision maker
("CODM") has been identified as its CEO, who reviews the consolidated results when making decisions about allocating resources
and assessing performance of the Company as a whole and hence, the Company has only one reportable segment. The Company does not distinguish
between markets or segments for the purpose of internal reporting. The Company's long-lived assets are substantially all located
in the PRC and all of the Company's revenues are derived from the PRC.
After the completion of acquisition of Cheyi
BVI, Yinhua and Feipeng BVI
The Company's CODM has been identified as
its CEO, who reviews the financial results when making decisions about allocating resources and assessing performance of the trucking
business, car-hailing and driver management services business and car owner services business separately and therefore, the Company has
three reportable segments. The Company's long-lived assets are substantially all located in the PRC and all of the Company's
revenues are derived from the PRC.
Recent issued Accounting Pronouncements
In February 2016, the FASB issued ASU No. 2016-02, Leases
(Topic 842), which supersedes the guidance in ASC Topic 840, Leases. ASU 2016-02 requires, among other changes to the lease accounting
guidance, lessees to recognize most leases on-balance sheet via a right-of-use asset and lease liability, and additional qualitative and
quantitative disclosures. In July 2018, ASU No. 2018-10, Codification Improvements to Topic 842, Leases, was issued to provide
more detailed guidance and additional clarification for implementing ASU No. 2016-02. In July 2018, the FASB issued ASU No. 2018-11, Leases
(Topic 842): Targeted Improvements, which provides an optional transition method in addition to the existing modified retrospective transition
method by allowing a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. Furthermore,
in June 2020, the FASB issued ASU No. 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective
Dates for Certain Entities, which defers the effective date of ASU No. 2016-02 for certain entities. This update is effective for
the Group for annual reporting periods beginning after December 15, 2021 and interim periods within annual periods beginning after December
15, 2022. Early adoption is permitted. The Group does not plan to early adopt this guidance and is evaluating the impact of the new standard.
Under the Jumpstart Our Business Startups Act of 2012, as amended ("the JOBS Act"), the Company meets the definition of an
emerging growth company, or EGC, and has elected the extended transition period for complying with new or revised accounting standards,
which delays the adoption of these accounting standards until they would apply to private companies. Consequently, financial information
will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2022.
The Company is currently evaluating the impact of the adoption of ASU 2016-02 on its consolidated financial statements and related disclosures.
F-
18
In June 2016, the FASB issued ASU No. 2016-13,
Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held
at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the
existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. This
guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. In November
2019, the FASB issued ASU 2019-10 which defers the effective date of ASU 2016-13 for SEC filers that are eligible to be smaller reporting
companies, non-SEC filers, and all other companies to fiscal years beginning after December 15, 2022, including interim periods within
those fiscal years. The Company is currently evaluating the impact of the adoption of ASU 2016-13 on its consolidated financial statements
and related disclosures.
Except for the above-mentioned pronouncements,
there are no new recent issued accounting standards that will have material impact on the consolidated financial position, statements
of operations and cash flows.
Concentrations of Risks
(a)
Foreign currency risk
A majority of the Company's expense transactions
are denominated in RMB and a significant portion of the Company and its subsidiaries' assets and liabilities are denominated in
RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be
transacted only by authorized financial institutions at exchange rates set by the People's Bank of China ("PBOC"). 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 the Company's financial results reported
in the U.S. dollar terms without giving effect to any underlying changes in the Company's business or results of operations. 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.
As a result, the Company is exposed to foreign
exchange risk as revenues and results of operations may be affected by fluctuations in the exchange rate between the U.S. dollar and RMB.
If the RMB depreciates against the U.S. dollar, the value of RMB revenues, earnings and assets as expressed in U.S. dollar financial statements
will decline. The Company has not entered into any hedging transactions in an effort to reduce its exposure to foreign exchange risk.
(b)
Concentration of Credit risk
Financial instruments that potentially subject
the Company to a significant concentration of credit risk consist primarily of cash, cash equivalents and restricted cash. As of December
31, 2022, and 2021, substantially most of the Company's cash were held by major financial institutions located in the PRC, which
management believes are of high credit quality.
For the credit risk related to accounts receivable,
the Company performs ongoing credit evaluations of its customers. The Company establishes an allowance for doubtful accounts based upon
estimates, factors surrounding the credit risk of specific customers and other information. The allowance amounts were immaterial for
all periods presented.
(c)
Customer concentration risk
For the year ended December 31, 2022,
one
customer
accounted for
15.6
% of the Company's total revenues. For the year ended December 31, 2021,
two
customers accounted for
23.0
% and
13.7
% of the Company's total revenues. For the year ended December 31, 2020,
two
customers accounted for
48.6
% and
17.2
% of the
Company's total revenues. No other customer accounts for more than
10
% of the Company's revenue for the years ended December
31, 2022, 2021 and 2020, respectively.
As of December 31, 2022,
two
customers accounted
for
15.2
% and
10.4
% of the total balance of accounts receivable. As of December 31, 2021,
three
customers accounted for
24.2
%,
16.2
% and
11.7
% of the total balance of accounts receivable. No other customer accounts for more than
10
% of the Company's accounts receivable
as of December 31, 2022 and 2021, respectively.
F-
19
(d)
Vendor concentration risk
For the year ended December 31, 2022, one vendor
accounted for
11.1
% of the Company's total costs. For the year ended December 31, 2021, three subcontractors accounted for
33.4
%,
18.8
% and
10.3
% of the Company's total subcontracting costs. For the year ended December 31, 2020, three subcontractors accounted
for
39.6
%,
26.1
% and
17.6
%. No other subcontractor accounts for more than
10
% of the Company's total subcontracting costs for the
years ended December 31, 2022, 2021 and 2020, respectively.
As of December 31, 2022, one vendor accounted
for
18.6
% of the total balance of accounts and notes payable. As of December 31, 2021, one subcontractor accounted for
18.4
% of the total
balance of accounts payable. No other subcontractor accounts for more than
10
% of the Company's accounts and notes payable as of
December 31, 2022 and 2021, respectively.
Goodwill impairment
The Company performs impairment tests on goodwill
on an annual basis in accordance with US GAAP, or more frequently if events or changes in circumstances indicate that those assets might
be impaired. Goodwill is tested for impairment at a reporting unit level, which is at the same level or one level below an operating segment.
A goodwill impairment loss is recognized when the carrying amount of the reporting unit is greater than its fair value. The goodwill impairment
loss is calculated as the excess of the carrying amount of the goodwill over its implied fair value. During the year ended December 31,
2022 there was no goodwill impairment identified.
Goodwill arising from the acquisition of Cheyi BVI, Yinhua and Feipeng
BVI. As Feipeng BVI was acquired in December, 2022, the goodwill arising from acquisition of Feipeng BVI was not assessed for impairment
test. During the year ended December 31, 2022, no indicator of impairment was identified with respect to the Cheyi BVI and Yinhua, which
was acquired in December 2021 and March 2022, after the management adjusted the projected results of Cheyi BVI and Yinhua due to the impact
of the COVID-19 pandemic.
Note 4 – Cash and cash equivalents
Cash and cash equivalents consist of the following:
December 31,
2022
December 31,
2021
Cash on hand
$
62,616
$
51,053
Cash at bank
5,624,695
5,622,603
Fixed deposits
-
78,461
Cash and cash equivalents
$
5,687,311
$
5,752,117
On June 11, 2021, the Company deposited $
78,461
(RMB
500,000
) in a bank at an annual interest rate of
1.95
% with a maturity date of
June 11, 2022
.
Note 5 – Accounts receivable, net
Accounts receivable, net consist of the following:
December 31,
2022
December 31,
2021
Accounts receivable
$
20,073,082
$
3,802,773
Allowance for doubtful accounts
(
945,761
)
(
152,768
)
Total accounts receivable, net
$
19,127,321
$
3,650,005
Movements of allowance for doubtful accounts are
as follows:
December 31,
2022
December 31,
2021
December 31,
2020
Beginning balance
$
152,768
$
217,676
$
122,056
Provision
804,613
140,204
82,647
Write off
-
(
136,602
)
-
Exchange rate effect
(
11,620
)
(
68,510
)
(
12,973
)
Ending balance
$
945,761
$
152,768
$
217,676
Note 6 – Prepayments
Prepayments consist of the following:
December 31,
2022
December 31,
2021
Prepayments
Prepayment - subcontracting
$
1,569,781
$
4,420,242
Prepayment - fuel
212,047
277,666
Prepayment - insurance
92,630
102,188
Prepayment - parts and others
54,544
183,999
Prepayment - salaries
306,192
436,847
Prepayment - legal
222,556
52,996
Prepayment - telecommunication services expenses
544,306
-
Prepayment - car services
4,279,810
-
Prepayment - vehicles
57,995
-
Total prepayments
$
7,339,861
$
5,473,938
F-
20
Note 7 – Other receivables
Other receivables consist of the following:
December 31,
2022
December 31,
2021
Other receivables
Other receivables, disposal of revenue equipment
$
-
$
169,095
Others*
88,069
67,614
Vehicle rental in advance
1,111,290
427,716
Pay on behalf of third parties
1,388,820
875,619
Government grant
207,664
-
Total other receivables
$
2,795,843
$
1,540,044
Others primarily involve the employee's
statutory social insurance.
Note 8 – Loans receivable
Due to strategic business cooperation, the Company
made interest-free advances to third parties. As of December 31, 2022 and 2021, the outstanding balance of such interest-free advances
were $
28,622,704
and $
22,487,767
, respectively.
Note 9 – Property and equipment, net
Property and equipment, net consist of the following:
December 31,
2022
December 31,
2021
Property and equipment
Buildings and improvements
$
1,097,647
$
1,188,006
Computer and office equipment
117,390
446,033
Revenue equipment – trucking
9,833,295
16,107,826
Revenue equipment – car-hailing and driver management services
16,732,808
9,980,931
Subtotal
27,781,140
27,722,796
Less: accumulated depreciation
(
18,707,442
)
(
15,498,214
)
Property and equipment, net
$
9,073,698
$
12,224,582
Depreciation expenses for the years ended December
31, 2022, 2021 and 2020 was $
3,844,159
, $
1,438,310
and $
1,521,234
, respectively. For the year ended December 31, 2022, the Company disposed
revenue equipment with cost of $
2,640,705
and accumulated depreciation of $
1,420,491
for proceeds of $
540,579
resulting in disposal loss
of $
679,635
. For the year ended December 31, 2021, the Company disposed revenue equipment with cost of $
1,047,024
and accumulated depreciation
of $
896,879
for proceeds of $
175,215
resulting in disposal gain of $
25,070
.
Revenue equipment under capital leases
The Company leased its revenue equipment from
third parties with terms of approximately 24 to 36 months and account for as a capital lease. As of December 31, 2022, carrying value
and accumulated depreciation of the revenue equipment under capital leases recorded by the Company were $
2,141,219
and $
81,035
, respectively.
As of December 31, 2021, carrying value and accumulated depreciation of the revenue equipment under capital leases recorded by the Company
were $
10,232,895
and $
10,232,895
, respectively.
Note 10 – Deposits
As of December 31, 2022, deposits primarily include
payments in total of $
2,657,126
made in advance to landlord, suppliers and financial institutions. As of December 31, 2021, deposits primarily
include payments in total of $
10,327,872
made in advance to landlord, suppliers, financial institutions and a business alliance for operational
purposes.
F-
21
Note 11 – Goodwill
As of December 31, 2022, the balance of goodwill
represented an amount of $
14,157,570
that arose from acquisition of Cheyi BVI in 2021, $
5,364,709
that arose from acquisition of Yinhua
in March 2022 and $
13,715,130
that arose from acquisition of Feipeng BVI in December 2022.
A reconciliation of changes in the Company's
goodwill by reportable segment were as follows:
Trucking services
Car-hailing and driver management services
Car owner services
Balance as at December 31, 2021
$
-
$
14,157,570
$
-
Impairment
-
-
-
Arising from acquisition
13,715,130
-
5,364,709
Effects of exchange rate changes
-
-
-
Balance as at December 31, 2022
$
13,715,130
$
14,157,570
$
5,364,709
Note 12 – Acquisition
Acquisition of Cheyi BVI
On December 29, 2021 ("Acquisition Date"),
the Company entered into a Share Purchase Agreement (the "SPA") to acquire
100
% of the equity interest of Cheyi (BVI) Limited
(the "Cheyi BVI") which operates its business through its subsidiary Zhejiang Cheyi Network Technology Co., Ltd. (the "Cheyi
Network"), an integrated online car-hailing and driver management services company. Pursuant to the agreement, the total consideration
for the acquisition of
100
% equity ownership of Cheyi BVI is an aggregate of U.S. $
23,470,712
, consisting of the issuance by the Company
to the shareholders of Cheyi BVI an aggregate of
3,189,000
fully paid Company's ordinary shares (being U.S. $
6,760,680
of $
2.12
per share) and payment of $
2,000,000
at closing, and Year-2021 earnout payment of U.S. $
8,826,019
and Year-2022 earnout payment of U.S.
$
5,884,013
if the Cheyi BVI's audited net income for its fiscal year 2021 and 2022 is no less than U.S. $
3,000,000
respectively.
The two earnout payments are due 13 months upon the delivery of Cheyi BVI's audited financial statements.
The transaction was accounted for in accordance
with the provisions of ASC 805-10, Business Combinations. The values assigned in these financial statements represent management's
best estimate of fair values as of the Acquisition Date.
As required by ASC 805-20, Business Combinations
– Identifiable Assets and Liabilities, and Any Noncontrolling Interest, management conducted a review to reassess whether they identified
all the assets acquired and all the liabilities assumed, and followed ASC 805-20's measurement procedures for recognition of the
fair value of net assets acquired. According to ASC 820, the fair value hierarchy gives the highest priority to unadjusted quoted prices
in active markets as the most reliable fair value measurement, and the lowest priority to unobservable inputs. According to ASC 820-10-35-41,
the valuation of shares issued in the acquisitions and purchase consideration is recognized on the quoted trading price of the Company's
ordinary shares on the date of acquisitions. The quoted closing prices for the Company's ordinary shares on NASDAQ on the dates
of the acquisitions of Cheyi BVI was $
2.12
per share.
The following table summarizes the allocation
of estimated fair values of net assets acquired and liabilities assumed:
Recognized amounts of identifiable assets acquired and liabilities
Accounts receivable, net
$
216,572
Prepayments
575,913
Others receivable
4,761,164
Equipment, net
9,980,931
Deferred tax assets
10
Deposits
595,149
Short-term bank borrowings
(
1,647,679
)
Accounts and notes payable
(
803,784
)
Others payable and accrued liabilities
(
1,631,610
)
Tax payable
(
1,859,485
)
Capital lease and financing obligations
(
2,351,104
)
Total identifiable net assets
7,836,077
Add: Goodwill
14,157,570
Total purchase price for acquisition net of $
1,477,065
of cash
$
21,993,647
The Company
has included the operating results of Cheyi BVI in its consolidated financial statements since the Acquisition Date.
The following
table summarizes the revenue and net income generated by
Cheyi BVI
for the year ended December
31, 2022:
Revenue
$
50,558,732
Net income
$
1,954,516
F-
22
Acquisition of Yinhua
On March 14, 2022, the Company entered into a
Share Purchase Agreement with Yinhua which develops and operates a comprehensive auto related service platform to serve auto insurance
companies, and each of the shareholders of the Yinhua.
Under terms of the share purchase agreement, we
shall pay $
10,076,600
in exchange for
100
% equity of Yinhua. Of the total consideration to be paid, $
7,078,100
shall be paid in form of
3,826,000
newly issued ordinary shares of the Company, representing $
1.85
per ordinary share of the Company, and $
1,000,000
upon closing.
In addition, a cash earnout of $
1,998,500
shall be paid if Yinhua achieves a net income target threshold of $
1.3
million during the calendar
year of 2022.
Founded in 2018, Yinhua provides diversified,
differentiated and customized value-added auto related services to auto insurance companies, where the services include road security
services, car maintenance services, car inspection services and other services. Yinhua develops and operates a comprehensive auto related
service platform for auto insurance companies combining intelligent human-vehicle interaction functions with car owner programs.
On March 18, 2022, the parties completed the transaction.
Upon the closing of the transaction, the Company acquired
100
% shares outstanding of the Yinhua, and the Company issued
3,826,000
ordinary
shares and paid $
1,000,000
to the sellers.
As required by ASC 805-20, Business Combinations
– Identifiable Assets and Liabilities, and Any Noncontrolling Interest, management conducted a review to reassess whether they identified
all the assets acquired and all the liabilities assumed, and followed ASC 805-20's measurement procedures for recognition of the
fair value of net assets acquired. According to ASC 820, the fair value hierarchy gives the highest priority to unadjusted quoted prices
in active markets as the most reliable fair value measurement, and the lowest priority to unobservable inputs. According to ASC 820-10-35-41,
the valuation of shares issued in the acquisitions and purchase consideration is recognized on the quoted trading price of the Company's
ordinary shares on the date of acquisitions. The quoted closing prices for the Company's ordinary shares on NASDAQ on the dates
of the acquisitions of Yinhua was $
1.85
per share.
The following table summarizes the allocation
of estimated fair values of net assets acquired and liabilities assumed:
Recognized amounts of identifiable assets acquired and liabilities assumed
Accounts receivable, net
$
4,519,839
Prepayments
8,050,558
Equipment, net
3,504
Deferred tax assets
16,415
Short-term bank borrowings
(
193,339
)
Others payable and accrued liabilities
(
7,685,086
)
Tax payable
(
1,126,777
)
Total identifiable net assets
3,585,114
Goodwill
5,364,709
Total purchase price for acquisition net of $
1,126,777
of cash
$
8,949,823
The Company
has included the operating results of Yinhua in its consolidated financial statements since the Acquisition Date.
The following
table summarizes the revenue and net income generated by Yinhua for the year ended December 31, 2022:
Revenue
$
27,053,149
Net income
$
533,006
F-
23
Acquisition of Feipeng BVI
On December 21, 2022, the Company entered into
a Share Purchase Agreement with Feipeng BVI which provides regional trucking services, and each of the shareholders of the Feipeng BVI,
pursuant to which, among other things and subject to the terms and conditions contained therein, the Company acquired 100% of Feipeng
BVI for approximately $
14,540,436
, of which US $
9,550,000
will be paid in cash upon closing in form of cash. Feipeng BVI shall receive
a certain number of shares valued at $4,990,436 if it achieves a targeted net income of US$
2.4
million during the calendar year 2023.
On December 21, 2022, the parties completed the
transaction. Upon the closing of the transaction, we acquired
100
% of the outstanding shares of the Feipeng BVI, and we paid $
9,550,000
in cash to the sellers.
The following table summarizes the allocation
of estimated fair values of net assets acquired and liabilities assumed:
Recognized amounts of identifiable assets acquired and liabilities assumed
Accounts receivable, net
$
3,746,298
Prepayments
550,944
Other receivables
246,748
Equipment, net
123,446
Deposits
610,393
Accounts payable
(
1,546,037
)
Short-term bank borrowings
(
1,884,823
)
Others payable and accrued liabilities
(
1,383,077
)
Amount due to related parties
(
1,552,719
)
Tax payable
(
21,589
)
Total identifiable net liabilities
(
1,110,416
)
Goodwill
13,715,130
Total purchase price for acquisition net of $
1,935,722
of cash
$
12,604,714
The Company
has included the operating results of Feipeng BVI in its consolidated financial statements since the Acquisition Date. $nil in net sales
and $nil in net income of Feipeng BVI were included in the consolidated financial statements for the years ended December 31, 2022.
Note 13 – Other payables and accrued
liabilities
Other payables and accrued liabilities consist
of the following:
December 31,
2022
December 31,
2021
Other payables and accrued liabilities
Rental deposits
$
369,026
$
220,416
Salary payables
230,283
157,970
Others
143,273
44,053
Receipt in advance
3,146,220
153,399
Payable under acquisition
22,835,923
16,710,032
Advance for operational purpose
916,332
286,820
Lending with no interests
1,413,617
1,220,176
Deposits for purchase of vehicles
-
476,258
Total other payables and accrued liabilities
$
29,054,674
$
19,269,124
Others primarily involve the rental expenses incurred.
F-
24
Note 14 – Credit facilities
Short-term bank borrowings
Outstanding balances of short-term bank borrowings
as of December 31, 2022 and 2021 consisted of the following:
Bank name
Term
Interest
rate
Collateral/
Guarantee
Date of
paid off
December 31,
2022
December 31,
2021
The Industrial Bank Co., Ltd.
From May 9, 2022 to May 9, 2023
Weighted average rate of
5.0
%
Guarantee by Mr. Jinlong Yang and MingZhu Logistics
9-May-23
347,967
-
Bank of China
From May 16, 2022 to May 16, 2023
Weighted average rate of
4.5
%
Guarantee by Mr. Jinlong Yang and MingZhu Logistics
16-May-23
3,340,486
-
China Everbright Bank
From November 23, 2022 to  November 22, 2023
Weighted average rate of
5.0
%
Guarantee by Mr. Jinlong Yang and MingZhu Logistics, pledge by a property owned by Mr. Jinlong Yang and two properties owned by Mr. Jinlong Yang's family members
-
2,087,804
-
Guilin Bank
From April 28, 2022 to April 28, 2023
Weighted average rate of
8.0
%
Guarantee by Mr. Jinlong Yang and MingZhu Logistics
28-Apr-23
420,460
-
Zhejiang Mintai Commercial Bank
From June 30, 2022 to June 8, 2023
Weighted average rate of
5.5
%
Guarantee by Mr. Dongdong Wang and his Spouse
-
289,973
-
Zhejiang Tailong Commercial Bank Co., Ltd.
From November 18, 2022 to  May 17, 2023
Weighted average rate of
6.8
%
Guarantee by Mr. Dongdong Wang, Mr. Dongdong Wang's Spouse and five employees
17-May-23
376,965
-
Haifa Baocheng Leasing Co., Ltd.
From September 2022 to September 2023
Weighted average rate of
8.0
%
Guarantee by Zhisheng's accounts receivable
-
1,273,857
-
Bank of China
From January 3, 2022 to January 3, 2023
Weighted average rate of
3.65
%
Guarantee by Mr. Lihui Wang
3-Jan-23
289,973
-
Bank of China
From September 2022 to September 2023
Weighted average rate of
3.65
%
Guarantee by Mr. Lihui Wang
-
1,159,891
-
China Construction Bank
From June 4, 2022 to June 4, 2023
Weighted average rate of
3.8525
%
None
-
434,959
-
Hangzhou United Rural Commercial Bank Co., Ltd.
From November 11, 2021 to November 5, 2022
Weighted average rate of
6.8
%
Guarantee by Mr. Dongdong Wang and his Spouse
5-Nov-22
$
-
$
156,922
Hangzhou United Rural Commercial Bank Co., Ltd.
From September 23, 2021 to September 22, 2022
Weighted average rate of
5.8
%
Guarantee by Mr. Dongdong Wang and his Spouse
22-Sep-22
-
78,461
Hangzhou United Rural Commercial Bank Co., Ltd.
From September 16, 2021 to September 15, 2022
Weighted average rate of
5.8
%
Guarantee by Mr. Dongdong Wang and his Spouse
15-Sep-22
-
78,461
Hangzhou United Rural Commercial Bank Co., Ltd.
From July 14, 2021 to January 13, 2022
Weighted average rate of
5.5
%
Guarantee by Mr. Dongdong Wang and his Spouse
13-Jan-22
-
78,461
Hangzhou United Rural Commercial Bank Co., Ltd.
From June 29, 2021 to January 13, 2022
Weighted average rate of
5.5
%
Guarantee by Mr. Dongdong Wang and his Spouse
13-Jan-22
-
784,609
Zhejiang Tailong Commercial Bank Co., Ltd.
From November 11, 2021 to November 19, 2022
Weighted average rate of
6.8
%
Guarantee by Mr. Dongdong Wang, Mr. Dongdong Wang's Spouse and five employees
19-Nov-22
-
470,765
Industrial Bank Co., Ltd.
From April 28, 2021 to May 7, 2022
Weighted average rate of
5.7
%
Guarantee by Mr. Jinlong Yang and MingZhu Logistics.
7-May-22
-
376,612
China Everbright Bank Co., Ltd.
From November 12, 2021 to November 20, 2022
Weighted average rate of
6.0
%
Pledge by properties owned by Mr. Jinlong Yang and properties owned by family members of Mr. Jinlong Yang
20-Nov-22
-
2,259,674
Bank of Communications Co., Ltd.
From April 29, 2021 to May 9, 2022
Weighted average rate of
5.7
%
Guarantee by Mr. Jinlong Yang and MingZhu Logistics.
9-May-22
-
3,295,359
$
10,022,335
$
7,579,324
F-
25
Long-term bank borrowings
Outstanding balances of long-term bank borrowings
as of December 31, 2022 and 2021 consisted of the following:
Bank name
Term
Interest rate
Collateral/
Guarantee
Date of
paid off
December 31,
2022
December 31,
2021
WeBank Co., Ltd.
From August 26, 2021 to August 26, 2023
Weighted average rate of
9.0
%
Guarantee by Mr. Jinlong Yang and MingZhu Logistics.
-
$
343,174
$
448,348
WeBank Co., Ltd.
From July 13, 2022 to July 13, 2024
Weighted average rate of
16.2
%
Guarantee by Mr. Jinlong Yang and MingZhu Logistics.
-
176,763
-
Kincheng Bank of Tianjin Co., Ltd.
From July 5, 2022 to July 5, 2024
Weighted average rate of
9.0
%
-
-
154,652
-
WeBank Co., Ltd.
From September 8, 2022 to September 8, 2024
Weighted average rate of
16.2
%
-
-
165,698
-
Less: current maturities
(
253,352
)
(
269,009
)
Non-current maturities
$
586,935
$
179,339
The maturities schedule of long-term bank borrowings
is as follow:
As of
December 31,
2022
As of
December 31,
2021
Payments due by period
Less than 1 year
$
586,935
$
269,009
1-2 years
253,352
179,339
Total
$
840,287
$
448,348
Interest expenses incurred from long-term bank
borrowings were and $
45,130
, $
14,184
and $
52,521
for the years ended December 31, 2022, 2021 and 2020, respectively.
Loans from other financial institutions
Outstanding balances of loans from other financial
institutions, which mainly includes the loan from Chailease, as of December 31, 2022 and 2021 were $
nil
and
144,126
, respectively. Loans
were pledged by several revenue equipment with recorded cost of $
nil
and $
1,125,173
, carrying value of $
nil
and $
79,903
and accumulated
depreciation of $
nil
and $
1,045,270
as of December 31, 2022 and 2021, respectively. The depreciation expenses of $
nil
, $
74,185
and $
101,741
and $
126,595
was recorded for revenue equipment pledged under these loans for the year ended December 31, 2022, 2021 and 2020, respectively.
The interest rate of this loan is
17.0
% per annum, and the loan term was up to
36
months starting from December 2019. As of December 31,
2022 and 2021 the balance of long-term portion of loans from other financial institutions were $
nil
and $
nil
, respectively and the balance
of short-term portion of loans from other financial institutions were $
nil
and $
144,126
, respectively. Interest expenses incurred from
loans from other financial institutions for the year ended December 31, 2022, 2021 and 2020 were $
nil
, $
47,229
and $
85,930
, respectively.
The outstanding balances and maturities schedule
of loans from other financial institutions is as follow:
As of
December 31,
2022
As of
December 31,
2021
Payments due by period
Less than 1 year
$
-
$
144,126
1-2 years
-
-
Total
$
-
$
144,126
F-
26
Note 15 – Variable Interest Entity
Variable interest entities ("VIEs")
are entities in which equity investors lack the characteristics of a controlling financial interest.
Cheyi Network
The Cheyi BVI, which is acquired by the Company
on December 29, 2021, operates business mainly through its variable interest entities ("VIE") in the PRC, based on a series
of contractual arrangements (collectively the "VIE Agreements").
As
a result of the VIE
Agreements
that our
Ningbo Cheyi Corporate
Information Consulting Co., Ltd. ("Cheyi WFOE")
entered with Zhejiang
Cheyi Network Technology Co., Ltd. ("Cheyi Network")
, and
its shareholders, the control and benefits of
Cheyi Network
were accrued
to us subject to the conditions that we have satisfied for consolidation of
Cheyi Network
and
its subsidiaries under U.S. GAAP. Such conditions include that (i) we control
Cheyi Network
through
power to govern the activities which most significantly impact
Cheyi Network
's
economic performance, (ii) we are contractually obligated to absorb losses of
Cheyi Network
that
could potentially be significant to
Cheyi Network
, and (iii) we are entitled
to receive benefits from
Cheyi Network
that could potentially be significant
to
Cheyi Network
. We are regarded as the primary beneficiary of
Cheyi
Network
and its subsidiaries, and
Cheyi Network
and
its subsidiaries are treated as our consolidated affiliated entity under U.S. GAAP. We have consolidated the financial results of
Cheyi
Network
and its subsidiaries in our consolidated financial statements for accounting
purposes in accordance with U.S. GAAP.
The Company believes that Cheyi Network is considered
a VIE under Accounting Codification Standards ("ASC") 810 "Consolidation", because the equity investors in Cheyi
Network no longer have the characteristics of a controlling financial interest, and the Company, through Cheyi WFOE, is the primary beneficiary
of Cheyi Network and controls Cheyi Network's operations. Accordingly, Cheyi Network has been consolidated as a deemed subsidiary
into the Company as a reporting company under ASC 810.
As required by ASC 810-10, the Company performs
a qualitative assessment to determine whether the Company is the primary beneficiary of Cheyi Network which is identified as a VIE of
the Company. A quality assessment begins with an understanding of the nature of the risks in the entity as well as the nature of the entity's
activities including terms of the contracts entered into by the entity, ownership interests issued by the entity and the parties involved
in the design of the entity. The Company's assessment of the involvement with Cheyi Network reveals that the Company has the absolute
power to direct the most significant activities that impact the economic performance of Cheyi Network. Cheyi WFOE is obligated to absorb
a majority of the loss from Cheyi Network activities and receive a majority of Cheyi Network's expected residual returns. In addition,
Cheyi Network's shareholders have pledged their equity interest in Cheyi Network to Jianzhi Beijing, irrevocably granted Cheyi WFOE
an exclusive option to purchase, to the extent permitted under PRC Law, all or part of the equity interests in Cheyi Network and agreed
to entrust all the rights to exercise their voting power to the person(s) appointed by Cheyi WFOE. Under the accounting guidance, the
Company is deemed to be the primary beneficiary of Cheyi Network and the financial positions, the operating results and cash flows of
Cheyi Network and Cheyi Network's subsidiaries are consolidated in the Company for financial reporting purposes.
The following is a summary of VIE Agreements by
and among Cheyi Network, a subsidiary of Cheyi BVI,
Cheyi WFOE
and the
shareholders of Cheyi BVI. Each of the VIE Agreements is described in detail below:
Master Exclusive Service Agreement
Under the Master Exclusive Service Agreement dated
November 24, 2021, Cheyi WFOE has agreed to provide the following services (among others) to Cheyi Network:
●
information consulting services regarding the business operation of Service Receiving Parties;
●
public relation services;
●
market investigation, research and consulting services;
●
Leasing, assignment or disposal of properties;
●
recruiting, managing and training of necessary personnel to sustain the business operation;
●
marketing channel to cooperate with business-relating third-party platforms;
●
customer order management and customer services;
●
mid or short-term market development and market planning services;
●
human resource management and internal information management;
●
Design, installation, daily management, maintenance and updating of network system, hardware and database design, and/or other services determined from time to time by Cheyi Network according to the need of business and capacity of the Cheyi WFOE.
This agreement was effective from November 24,
2021 and will continue to be effective unless it is terminated by written notice of Cheyi.
F-
27
Business Cooperation Agreement
Under the Business Cooperation Agreement entered
into by Cheyi WFOE, Cheyi Network and the shareholders of Cheyi Network, dated November 24, 2021, all parties agreed that without obtaining
Cheyi WFOE 's prior written consent, Cheyi shall not, and each of the Cheyi Network and shareholders of Cheyi Network shall cause
each of Cheyi Network and its subsidiaries not to, engage in any transaction which may materially affect its asset obligation right or
operation. Furthermore, Cheyi Network shall and shareholders of Cheyi Network shall cause Cheyi and its subsidiaries to accept suggestions
raised by Cheyi WFOE over the employee engagement and replacement, daily operation, dividend distribution and financial management systems
of Cheyi Network and its subsidiaries and Cheyi Network and its subsidiaries shall strictly abide by and perform accordingly.
Equity Interest Pledge Agreement
The shareholders of Cheyi Network entered into
an Equity Pledge Interest Agreement with Cheyi WFOE, dated November 24, 2021. Under such equity pledge agreement, each of the shareholders
of Cheyi Network pledged its respective equity interest in Cheyi Network to Cheyi WFOE to secure such shareholder's obligations
under the Exclusive Option Agreement, Proxy Agreement, Master Exclusive Service Agreement, and Letter of Confirmation and Undertaking.
Each of such shareholders further agreed not to
transfer or pledge his or her respective equity interest in Cheyi Network without the prior written consent of Cheyi WFOE. The equity
pledge agreement will remain effective until the shareholders fulfill their obligations and Cheyi WFOE discharges all the shareholders'
obligations under these VIE Agreements in writing.
Exclusive Option Agreement
Under the Exclusive Option Agreement entered into
by Cheyi WFOE, Cheyi Network and the shareholders of Cheyi Network, dated November 24, 2021, the shareholders of Cheyi Network granted
Cheyi WFOE or its designee an option to purchase all or a portion of their respective equity interest in Cheyi Network for the RMB
1
.
Each of shareholders of Cheyi Network agreed that,
as of the effective date of this agreement, but before the transfer of all or part of the Cheyi Network's equity interest to Cheyi
Network WFOE, if the shareholders obtain dividends, bonuses or residual property from Cheyi Network, the shareholders shall transfer all
the income (after tax) to Cheyi WFOE.
The exclusive option agreement shall remain in
effect until all of the equity interests in or assets of Cheyi Network have been acquired by Cheyi WFOE or its designee, and upon the
condition that Cheyi WFOE and its subsidiaries, branches can engage in the business of Cheyi Network legally.
Cheyi WFOE has the right to unilaterally terminate
this agreement immediately by sending written notices to Cheyi Network and the shareholders of Cheyi Network at any time without liability
for the breach. Unless otherwise mandatory by Chinese law, Cheyi Network and its shareholders has no right to unilaterally terminate this
agreement.
Proxy Agreement
Under the Proxy Agreement among Cheyi WFOE, Cheyi
Network and the shareholders of Cheyi Network, dated November 24, 2021, each of the shareholders of Cheyi Network has agreed to irrevocably
entrust Cheyi WFOE or its designee to represent it to exercise all the shareholders' rights to which it is entitled as a shareholder
of Cheyi Network.
The Proxy Agreement is irrevocable and shall remain effective until
upon the instruction of Cheyi WFOE.
Letter of Confirmation and Undertaking
Each shareholder of Cheyi Network had signed a
Letter of Confirmation and Undertaking. Under the Letter of Confirmation and Undertaking, each shareholder of Cheyi Network confirmed
undertake and warrant that his or her successor, guardian, creditor, spouse or any other person that may be entitled to assume rights
and interests in the equity interest of Cheyi Network held by him or her upon his or her death incapacity, divorce or any circumstances
that may affect his or her ability to exercise rights of shareholder in Cheyi Network will not, in any manner and under any circumstances,
take any action that may affect or hinder the fulfillment of his or her obligations under each of the Master Exclusive Service Agreement,
the Business Cooperation Agreement, the Proxy Agreement, the Exclusive Option Agreement, and the Equity Interest Pledge Agreement executed
by him or her on November 24, 2021.
F-
28
The Company believes that the contractual arrangements
with its VIE and their respective shareholders are in compliance with PRC laws and regulations and are legally enforceable. On March 15,
2019, the National People's Congress approved the Foreign Investment Law, effective on January 1, 2020. The Foreign Investment Law
has a catch-all provision under the definition of "foreign investment" which includes investments made by foreign investors
in China through means stipulated in laws or administrative regulations or other methods prescribed by the State Council. In the event
that the State Council in the future promulgates laws and regulations that deem investments made by foreign investors through contractual
arrangements as "foreign investment," the Group's ability to use the contractual arrangements with its VIEs and the
Group's ability to conduct business through the VIEs could be severely limited. However, uncertainties in the PRC legal system could
limit the Company's ability to enforce the contractual arrangements. If the legal structure and contractual arrangements were found
to be in violation of PRC laws and regulations, the PRC government could:
●
revoke the business and operating licenses of the Company's PRC subsidiary and VIE;
●
discontinue or restrict the operations of any related-party transactions between the Company's PRC subsidiary and VIE;
●
limit the Company's business expansion in China by way of entering into contractual arrangements;
●
impose fines or other requirements with which the Company's PRC subsidiary and VIE may not be able to comply;
●
require the Company or the Company's PRC subsidiary and VIE to restructure the relevant ownership structure or operations; or
●
restrict or prohibit the Company's use of the proceeds of the additional public offering to finance.
The Company's ability to conduct its car-hailing
and driver management services business that specializes in car-hailing and driver management services s may be negatively affected if
the PRC government was to carry out any aforementioned actions.
Zhisheng
The Yinhua, which is acquired
by the Company on March 14, 2022, operates business mainly through its variable interest entities ("VIE") in the PRC, based
on a series of contractual arrangements (collectively the "VIE Agreements"). As a result of the VIE Agreements that our Zhejiang
Caiyunlian Technology Co., Ltd. ("Yinhua WFOE") entered with Hainan Zhisheng Car Services Co., Ltd. ("Zhisheng"),
and its shareholders, the control and benefits of Zhisheng were accrued to us subject to the conditions that we have satisfied for consolidation
of Zhisheng under U.S. GAAP. Such conditions include that (i) we control Zhisheng through power to govern the activities which most significantly
impact Zhisheng's economic performance, (ii) we are contractually obligated to absorb losses of Zhisheng that could potentially
be significant to Zhisheng, and (iii) we are entitled to receive benefits from Cheyi Network that could potentially be significant to
Zhisheng. We are regarded as the primary beneficiary of Zhisheng, and Zhisheng is treated as our consolidated affiliated entity under
U.S. GAAP. We have consolidated the financial results of Zhisheng in our consolidated financial statements for accounting purposes in
accordance with U.S. GAAP.
The following is a summary
of VIE Agreements by and among Zhisheng, a subsidiary of Yinhua, Yinhua WFOE and the shareholders of Yinhua. Each of the VIE Agreements
is described in detail below:
Master Exclusive Service
Agreement
Under the Master Exclusive
Service Agreement dated January 22, 2022, Yinhua WFOE has agreed to provide the following services (among others) to Zhisheng:
●
information consulting services regarding the business operation
of Service Receiving Parties;
●
public relation services;
●
market investigation, research and consulting services;
●
Leasing, assignment or disposal of properties;
●
recruiting, managing and training of necessary personnel
to sustain the business operation;
●
marketing channel to cooperate with business-relating third-party
platforms;
●
customer order management and customer services;
●
mid or short-term market development and market planning
services;
●
human resource management and internal information management;
●
Design, installation, daily management, maintenance and updating
of network system, hardware and database design, and/or other services determined from time to time by Zhisheng according to the need
of business and capacity of the Yinhua WFOE.
This agreement was effective
from January 22, 2022 and will continue to be effective unless it is terminated by written notice of Zhisheng.
F-
29
Business Cooperation Agreement
Under the Exclusive Option
Agreement entered into by Yinhua WFOE, Zhisheng and the shareholders of Zhisheng, dated January 22, 2022, all parties agreed that without
obtaining Yinhua WFOE 's prior written consent, Zhisheng shall not, and each of the Zhisheng and shareholders of Zhisheng shall
cause each of Zhisheng and its subsidiaries not to, engage in any transaction which may materially affect its asset obligation right or
operation. Furthermore, Zhisheng shall and shareholders of Zhisheng shall cause Zhisheng and its subsidiaries to accept suggestions raised
by Yinhua WFOE over the employee engagement and replacement, daily operation, dividend distribution and financial management systems of
Zhisheng and its subsidiaries and Zhisheng and its subsidiaries shall strictly abide by and perform accordingly.
Equity Interest Pledge Agreement
The shareholders of Zhisheng
entered into an Equity Pledge Interest Agreement with Yinhua WFOE, dated January 22, 2022. Under such equity pledge agreement, each of
the shareholders of Zhisheng pledged its respective equity interest in Zhisheng to Yinhua WFOE to secure such shareholder's obligations
under the Exclusive Option Agreement, Proxy Agreement, Master Exclusive Service Agreement, and Letter of Confirmation and Undertaking.
Each of such shareholders further
agreed not to transfer or pledge his or her respective equity interest in Zhisheng without the prior written consent of Yinhua WFOE. The
equity pledge agreement will remain effective until the shareholders fulfill their obligations and Yinhua WFOE discharges all the shareholders'
obligations under these VIE Agreements in writing.
Exclusive Option Agreement
Under the Exclusive Option
Agreement entered into by Yinhua WFOE, Zhisheng and the shareholders of Zhisheng, dated January 22, 2022, the shareholders of Zhisheng
granted Yinhua WFOE or its designee an option to purchase all or a portion of their respective equity interest in Zhisheng for the RMB
1
.
Each of shareholders of Zhisheng
agreed that, as of the effective date of this agreement, but before the transfer of all or part of the Zhisheng's equity interest
to Yinhua WFOE, if the shareholders obtain dividends, bonuses or residual property from Zhisheng, the shareholders shall transfer all
the income (after tax) to Yinhua WFOE.
The exclusive option agreement
shall remain in effect until all of the equity interests in or assets of Zhisheng have been acquired by Yinhua WFOE or its designee, and
upon the condition that Yinhua WFOE and its subsidiaries, branches can engage in the business of Zhisheng legally.
Yinhua WFOE has the right to
unilaterally terminate this agreement immediately by sending written notices to Zhisheng and the shareholders of Zhisheng at any time
without liability for the breach. Unless otherwise mandatory by Chinese law, Zhisheng and its shareholders has no right to unilaterally
terminate this agreement.
Proxy Agreement
Under the Proxy Agreement among
Yinhua WFOE, Zhisheng and the shareholders of Zhisheng, dated January 22, 2022, each of the shareholders of Zhisheng has agreed to irrevocably
entrust Yinhua WFOE or its designee to represent it to exercise all the shareholders' rights to which it is entitled as a shareholder
of Zhisheng.
The Proxy Agreement is irrevocable
and shall remain effective until upon the instruction of Yinhua WFOE.
Letter of Confirmation and
Undertaking
Each shareholder of Zhisheng
had signed a Letter of Confirmation and Undertaking. Under the Letter of Confirmation and Undertaking, each shareholder of Zhisheng confirmed
undertake and warrant that his or her successor, guardian, creditor, spouse or any other person that may be entitled to assume rights
and interests in the equity interest of Zhisheng held by him or her upon his or her death incapacity, divorce or any circumstances that
may affect his or her ability to exercise rights of shareholder in Zhisheng will not, in any manner and under any circumstances, take
any action that may affect or hinder the fulfillment of his or her obligations under each of the Master Exclusive Service Agreement, the
Business Cooperation Agreement, the Proxy Agreement, the Exclusive Option Agreement, and the Equity Interest Pledge Agreement executed
by him or her on January 22, 2022.
Consent Letter
Each spouse of shareholder
of Zhisheng had signed a Consent letter. Under Consent Letter, each spouse of shareholder of Zhisheng confirm and agree that the equity
interest in the Zhisheng held by each shareholder of Zhisheng is her or his individual property not the joint property, which each shareholder
of Zhisheng is entitled to dispose of on her or his own.
F-
30
The Company's ability to conduct its car
owner services business that specializes in car owner services may be negatively affected if the PRC government was to carry out any aforementioned
actions.
Feipeng
The Feipeng BVI, which is
acquired by the Company on December 21, 2022, operates business mainly through its variable interest entities ("VIE") in the
PRC, based on a series of contractual arrangements (collectively the "VIE Agreements"). As a result of the VIE Agreements
that our Shenzhen Feipeng Zongheng Supply Chain Management Co., Ltd. ("Feipeng WFOE") entered with Xinjiang Feipeng Logistics
Co., Ltd. ("Feipeng"), and its shareholders, the control and benefits of Feipeng were accrued to us subject to the conditions
that we have satisfied for consolidation of Feipeng under U.S. GAAP. Such conditions include that (i) we control Feipeng through power
to govern the activities which most significantly impact Feipeng's economic performance, (ii) we are contractually obligated to
absorb losses of Feipeng that could potentially be significant to Feipeng, and (iii) we are entitled to receive benefits from Feipeng
that could potentially be significant to Feipeng. We are regarded as the primary beneficiary of Feipeng, and Feipeng is treated as our
consolidated affiliated entity under U.S. GAAP. We have consolidated the financial results of Feipeng in our consolidated financial statements
for accounting purposes in accordance with U.S. GAAP.
The following is a summary
of VIE Agreements by and among Feipeng, a subsidiary of Feipeng BVI, Feipeng WFOE and the shareholders of Feipeng BVI. Each of the VIE
Agreements is described in detail below:
Master Exclusive Service
Agreement
Under the Master Exclusive
Service Agreement dated December 20, 2022, Feipeng WFOE has agreed to provide the following services (among others) to Feipeng:
●
information consulting services regarding the business operation of Service Receiving Parties;
●
public relation services;
●
market investigation, research and consulting services;
●
Leasing, assignment or disposal of properties;
●
recruiting, managing and training of necessary personnel to sustain the business operation;
●
marketing channel to cooperate with business-relating third-party platforms;
●
customer order management and customer services;
●
mid or short-term market development and market planning services;
●
human resource management and internal information management;
●
Design, installation, daily management, maintenance and updating of network system, hardware and database design, and/or other services determined from time to time by Feipeng according to the need of business and capacity of the Feipeng WFOE.
This agreement was effective
from December 20, 2022 and will continue to be effective unless it is terminated by written notice of Feipeng.
Business Cooperation Agreement
Under the Exclusive Option
Agreement entered into by Feipeng WFOE, Feipeng and the shareholders of Feipeng, dated December 20, 2022, all parties agreed that without
obtaining Feipeng WFOE 's prior written consent, Feipeng shall not, and each of the Feipeng and shareholders of Feipeng shall cause
each of Feipeng and its subsidiaries not to, engage in any transaction which may materially affect its asset obligation right or operation.
Furthermore, Feipeng shall and shareholders of Feipeng shall cause Feipeng and its subsidiaries to accept suggestions raised by Feipeng
WFOE over the employee engagement and replacement, daily operation, dividend distribution and financial management systems of Feipeng
and its subsidiaries and Feipeng and its subsidiaries shall strictly abide by and perform accordingly.
F-
31
Equity Interest Pledge
Agreement
The shareholders of Feipeng
entered into an Equity Pledge Interest Agreement with Feipeng WFOE, dated December 20, 2022. Under such equity pledge agreement, each
of the shareholders of Feipeng pledged its respective equity interest in Feipeng to Feipeng WFOE to secure such shareholder's obligations
under the Exclusive Option Agreement, Proxy Agreement, Master Exclusive Service Agreement, and Letter of Confirmation and Undertaking.
Each of such shareholders
further agreed not to transfer or pledge his or her respective equity interest in Feipeng without the prior written consent of Feipeng
WFOE. The equity pledge agreement will remain effective until the shareholders fulfill their obligations and Feipeng WFOE discharges all
the shareholders' obligations under these VIE Agreements in writing.
Exclusive Option Agreement
Under the Exclusive Option
Agreement entered into by Feipeng WFOE, Feipeng and the shareholders of Feipeng, dated December 20, 2022, the shareholders of Feipeng
granted Feipeng WFOE or its designee an option to purchase all or a portion of their respective equity interest in Feipeng for the RMB
1
.
Each of shareholders of Feipeng
agreed that, as of the effective date of this agreement, but before the transfer of all or part of the Feipeng's equity interest
to Feipeng WFOE, if the shareholders obtain dividends, bonuses or residual property from Feipeng, the shareholders shall transfer all
the income (after tax) to Feipeng WFOE.
The exclusive option agreement
shall remain in effect until all of the equity interests in or assets of Feipeng have been acquired by Feipeng WFOE or its designee, and
upon the condition that Feipeng WFOE and its subsidiaries, branches can engage in the business of Feipeng legally.
Feipeng WFOE has the right
to unilaterally terminate this agreement immediately by sending written notices to Feipeng and the shareholders of Feipeng at any time
without liability for the breach. Unless otherwise mandatory by Chinese law, Feipeng and its shareholders has no right to unilaterally
terminate this agreement.
Proxy Agreement
Under the Proxy Agreement
among Feipeng WFOE, Feipeng and the shareholders of Feipeng, dated December 20, 2022, each of the shareholders of Feipeng has agreed to
irrevocably entrust Feipeng WFOE or its designee to represent it to exercise all the shareholders' rights to which it is entitled
as a shareholder of Feipeng.
The Proxy Agreement is irrevocable
and shall remain effective until upon the instruction of Feipeng WFOE.
Letter of Confirmation
and Undertaking
Each shareholder of Feipeng
had signed a Letter of Confirmation and Undertaking. Under the Letter of Confirmation and Undertaking, each shareholder of Feipeng confirmed
undertake and warrant that his or her successor, guardian, creditor, spouse or any other person that may be entitled to assume rights
and interests in the equity interest of Feipeng held by him or her upon his or her death incapacity, divorce or any circumstances that
may affect his or her ability to exercise rights of shareholder in Feipeng will not, in any manner and under any circumstances, take any
action that may affect or hinder the fulfillment of his or her obligations under each of the Master Exclusive Service Agreement, the Business
Cooperation Agreement, the Proxy Agreement, the Exclusive Option Agreement, and the Equity Interest Pledge Agreement executed by him or
her on December 20, 2022.
Consent Letter
Each spouse of shareholder of Feipeng had signed
a Consent letter. Under Consent Letter, each spouse of shareholder of Feipeng confirm and agree that the equity interest in the Feipeng
held by each shareholder of Feipeng is her or his individual property not the joint property, which each shareholder of Feipeng is entitled
to dispose of on her or his own.
The Company's ability to conduct its regional
trucking services may be negatively affected if the PRC government was to carry out any aforementioned actions.
As a result, The Company may not be able to consolidate
its VIEs in its consolidated financial statements as it may lose the ability to exert effective control over the VIEs and their respective
shareholders and it may lose the ability to receive economic benefits from the VIEs. The Company, however, does not believe such actions
would result in the liquidation or dissolution of the Company, its PRC subsidiary and VIEs.
F-
32
Total assets and liabilities presented on the
Company's consolidated balance sheets and revenue, expense, net income presented on consolidated statement of income and comprehensive
income as well as the cash flow from operating, investing and financing activities presented on the consolidated statement of cash flows
are consolidation of the financial position, operation and cash flow of the Company's subsidiaries, VIE and VIE's subsidiaries.
The Company has not provided any financial support to Cheyi Network, Zhisheng, Feipeng for the years ended as of December 31, 2022 and
2021.
The carrying amounts of the assets, liabilities
and the results of operations of the VIEs and VIEs' subsidiaries included in the Company's consolidated balance sheets and
statements of income and comprehensive income, which are prepared before eliminating the inter-company balances and transactions between
the VIEs, the subsidiaries of the VIEs and the Company and its subsidiaries, are as follows:
As of
As of
December 31,
December 31,
2022
2021
USD
USD
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
3,936,430
1,477,065
Accounts receivable, net
17,625,183
216,572
Prepayments
5,687,920
575,913
Other receivables
2,776,885
1,350,331
Loans receivable
1,721,594
3,410,833
Amount due from related parties
877,598
-
Total current assets
32,625,610
7,030,714
NON-CURRENT ASSET
Property and equipment, net
7,737,384
9,980,931
Deferred tax assets
15,175
10
Deposits
2,345,084
595,149
Total non-current asset
10,097,643
10,576,090
Total assets
$
42,723,253
$
17,606,804
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term bank borrowings
$
3,825,617
$
1,647,679
Accounts and notes payable
6,509,409
803,784
Other payables and accrued liabilities
4,194,169
1,631,610
Amount due to related parties
5,958,665
-
Tax payable
4,174,642
1,859,485
Current portion of capital lease and financing obligations
704,504
-
Total current liabilities
25,367,006
5,942,558
NON-CURRENT LIABILITIES
Long-term portion of capital lease and financing obligations
1,158,642
2,351,104
Total non-current liabilities
1,158,642
2,351,104
Total liabilities
26,525,648
8,293,662
SHAREHOLDERS' EQUITY
Ordinary shares
1,454,440
1,454,440
Additional paid-in capital
1,992,881
383,721
Statutory reserves
536,962
468,522
Other reserves
12,349,552
325,456
Retained earnings
-
6,236,232
Accumulated other comprehensive (loss) income
(
136,230
)
444,771
Total shareholders' equity
16,197,605
9,313,142
Total liabilities and shareholders' equity
$
42,723,253
$
17,606,804
F-
33
For the Years Ended
December 31,
2022
2021
Revenues
$
77,611,882
$
-
Net income
$
2,487,522
$
-
For the Years Ended
December 31,
2022
2021
Net cash flows from operating activities
$
(
1,435,387
)
$
-
Net cash flows from investing activities
$
778,705
$
-
Net cash flows from financing activities
$
779,811
$
-
There are no pledge or collateralization of the
VIEs and VIEs' subsidiaries' assets that can only be used to settled obligations of the VIEs and VIEs' subsidiaries,
except for the restricted assets disclosed in Note - 19. Relevant PRC laws and regulations restrict the VIE from transferring a portion
of its net assets to the Company in the form of loans and advances or cash dividends.
As the VIEs are incorporated as limited liability
company under the PRC Company Law, creditors of the VIEs do not have recourse to the general credit of the Company for any of the liabilities
of the VIEs in normal course of business.
Note 16 – Leases
As of December 31, 2022, the Company has capital
lease commitments for revenue equipment summarized for the following fiscal years:
Minimum
lease
payments
Present
value of
minimum
lease
payments
12 months ending December 31,
2023
$
865,348
$
757,088
2024
774,057
670,952
2025
473,265
410,226
Thereafter
89,368
77,464
Total
2,202,038
1,915,730
Less: amount representing interest
(
286,308
)
Present value of minimum lease payments
$
1,915,730
$
1,915,730
Less: current maturities
(
757,088
)
Capital lease obligations, long-term
$
1,158,642
The Company leases certain of its revenue equipment
under capital lease agreements. The terms of the capital leases expire at various dates through December 2026. The Company has option
to purchase the revenue equipment for a nominal amount at the end of the lease term.
As of December 31, 2021, the Company has capital
lease commitments for revenue equipment summarized for the following fiscal years:
Minimum
lease
payments
Present value of
minimum
lease
payments
12 months ending December 31,
2022
$
2,641,587
$
2,267,248
2023
136,063
121,407
2024
91,323
79,305
Thereafter
-
-
Total
2,868,973
2,467,960
Less: amount representing interest
(
401,013
)
-
Present value of minimum lease payments
$
2,467,960
$
2,467,960
Less: current maturities
(
2,267,248
)
Capital lease obligations, long-term
$
200,712
F-
34
The lease term of the Company's capital
lease obligations ranged from two to four years. Interest rates underlying the capital lease obligations ranged from
5.0
% to
6.0
%,
4
%
to
11.8
% per annum and
3.4
% to
17.0
% per annum for the years ended December 31, 2022, 2021 and 2020, respectively. Interest expenses incurred
from capital lease were $
223,904
, $
8,411
and $
41,110
for the years ended December 31, 2022, 2021 and 2020, respectively.
The Company's capital lease obligations
are secured by the lessor's title to the leased assets.
The total future minimum lease payments under
the non-cancellable operating lease with respect to the offices December 31, 2022 are payable as follows:
12 months ending December 31,
2023
298,924
2024
-
Future minimum operating lease payments
$
298,924
The total future minimum lease payments under
the non-cancellable operating lease with respect to the office December 31, 2021 are payable as follows:
12 months ending December 31,
2022
112,387
2023
99,899
Future minimum operating lease payments
$
212,286
Rental expense of the Company for the years ended
December 31, 2022, 2021 and 2020 were $
306,396
, $
111,024
and $
103,733
, respectively.
Note 17 – Related party balances and
transactions
Related party balances
The amount due from related parties consists of
the following:
Related Party Name (EN)
Relationship
Nature
December 31,
2022
December 31,
2021
Mr. Dongdong Wang
Shareholder
Lending with no interests
$
877,598
$
-
Exquisite Elite Limited
Shareholder
Advances to payment of professional fee
54,882
-
Mr. Hui Wang
Senior employee
Advances for operational purpose
32,839
-
Mr. Jinlong Yang
Chairman and Chief Executive Officer
Advances for operational purpose
709,694
705,280
Mr. Mingzhu Logistics
Mr. Jinlong Yang's family member as sole shareholder
Lending with no interests
1,002,332
-
$
2,677,345
$
705,280
The amount due to related parties consists of
the following:
Related Party Name (EN)
Relationship
Nature
December 31,
2022
December 31,
2021
Mr. Zuojie Dai
Manager of MingZhu Pengcheng
Advances for operational purpose
75,180
81,375
Exquisite Elite Limited
Shareholder
Advances to payment of professional fee
-
14,479
MingZhu Logistics
Mr. Jinlong Yang's family member as sole shareholder
Lending with no interests
-
198,490
Mr. Jingwei Zhang
Chief Financial Officer
Advances for operational purpose
75,021
-
Lihui Wang
Advances for operational purpose
1,552,720
-
Xiangyin Guo
Advances for operational purpose
4,405,945
-
$
6,108,866
$
294,344
F-
35
Collateral and Guarantee
The collateral and guarantee made by related parties
to the Company as of December 31, 2022 consists of the following:
Related Parties
Institution Name
Term
Aggregated
Principal
Carrying
Amount
as of
December 31,
2022
Guarantee by Mr. Jinlong Yang and MingZhu Logistics
The Industrial Bank Co., Ltd.(3)
From May 9, 2022 to May 9, 2023
$
347,967
$
347,967
Guarantee by Mr. Jinlong Yang and MingZhu Logistics
Bank of China(6)
From May 16, 2022 to May 16, 2023
4,059,618
3,340,486
Guarantee by Mr. Jinlong Yang and MingZhu Logistics, pledge by a property owned by Mr. Jinlong Yang and two properties owned by Mr. Jinlong Yang's family members
China Everbright Bank(4)
From November 23, 2022 to  November 22, 2023
2,174,796
2,087,804
Guarantee by Mr. Jinlong Yang and MingZhu Logistics
Guilin Bank(5)
From April 28, 2022 to  April 28, 2023
420,460
420,460
Guarantee by Mr. Dongdong Wang and his Spouse
Zhejiang Mintai Commercial Bank
From June 30, 2022 to June 8, 2023
289,973
289,973
Guarantee by Mr. Dongdong Wang, Mr. Dongdong Wang's Spouse and five employees
Zhejiang Tailong Commercial Bank Co., Ltd. (2)
From November 18, 2022 to  May 17, 2023
376,965
376,965
Guarantee by Mr. Lihui Wang
Bank of China(6)
From January 3, 2022 to  January 3, 2023
289,973
289,973
Guarantee by Mr. Lihui Wang
Bank of China(6)
From September 2022 to  September 2023
1,159,891
1,159,891
$
10,285,333
$
8,313,519
The collateral and guarantee made by related parties
to the Company as of December 31, 2021 consists of the following:
Related Parties
Institution Name
Term
Aggregated
Principal
Carrying
Amount
as of
December 31,
2021
Guarantee by Mr. Dongdong Wang and his Spouse
Hangzhou United Rural Commercial Bank Co.,Ltd.
From November 11, 2021 to November 5, 2022
$
156,922
$
156,922
Guarantee by Mr. Dongdong Wang and his Spouse
Hangzhou United Rural Commercial Bank Co.,Ltd.
From September 23, 2021 to September 22, 2022
78,461
78,461
Guarantee by Mr. Dongdong Wang and his Spouse
Hangzhou United Rural Commercial Bank Co.,Ltd.
From September 16, 2021 to September 15, 2022
78,461
78,461
Guarantee by Mr. Dongdong Wang and his Spouse
Hangzhou United Rural Commercial Bank Co.,Ltd.
From July 14, 2021 to January 13, 2022
78,461
78,461
Guarantee by Mr. Dongdong Wang and his Spouse
Hangzhou United Rural Commercial Bank Co.,Ltd.
From June 29, 2021 to January 13, 2022
784,609
784,609
Guarantee by Mr. Dongdong Wang, Mr. Dongdong Wang's Spouse and five employees
Zhejiang Tailong Commercial Bank Co.,Ltd
From November 11, 2021 to November 19, 2022
470,765
470,765
Guarantee by Mr. Jinlong Yang and MingZhu Logistics.
Industrial Bank Co., Ltd.
From April 28, 2021 to May 7, 2022
470,765
376,612
Pledge by properties owned by Mr. Jinlong Yang and properties owned by family members of Mr. Jinlong Yang
China Everbright Bank Co., Ltd.
From November 12, 2021 to November 20, 2022
2,353,827
2,259,674
Guarantee by Mr. Jinlong Yang and MingZhu Logistics.
Bank of Communications Co., Ltd.
From April 29, 2021 to May 9, 2022
3,923,046
3,295,359
Guarantee by Mr. Jinlong Yang and MingZhu Logistics.
WeBank Co., Ltd.
From August 26, 2021 to August 26, 2023
$
470,765
$
448,348
$
8,866,082
$
8,027,672
F-
36
Note 18 – Employee benefits government
plan
The Company participates in a government-mandated
multi-employer defined contribution plan pursuant to which certain retirement, medical and other welfare benefits are provided to employees.
PRC labor regulations require the Company to pay to the local labor bureau a monthly contribution calculated at a stated contribution
rate based on the basic monthly compensation of qualified employees. The relevant local labor bureau is responsible for meeting all retirement
benefit obligations; the Company has no further commitments beyond its monthly contribution.
Note 19 – Income taxes
Cayman Islands
The Company was incorporated in the Cayman Islands
and is not subject to tax on income or capital gains under the laws of Cayman Islands. Additionally, the Cayman Islands does not impose
a withholding tax on payments of dividends to shareholders.
British Virgin Islands
MingZhu BVI is incorporated in the British Virgin
Islands and is not subject to tax on income or capital gains under current British Virgin Islands law. In addition, upon payments of dividends
by these entities to their shareholders, no British Virgin Islands withholding tax will be imposed.
Hong Kong
MingZhu HK is incorporated in Hong Kong and is
subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant
Hong Kong tax laws. The applicable tax rate is
16.5
% in Hong Kong. The Company did not make any provisions for Hong Kong profit tax as
there were no assessable profits derived from or earned in Hong Kong since inception. Under Hong Kong tax law, MingZhu HK is exempted
from income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends.
PRC
The Company PRC subsidiaries are governed by the
income tax laws of the PRC and the income tax provision in respect to operations in the PRC is calculated at the applicable tax rates
on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise
Income Tax Laws of the PRC (the "EIT Laws"), Chinese enterprises are subject to income tax at a rate of
25
% after appropriate
tax adjustments.
The Ministry of Finance ("MOF") and
State Administration of Taxation ("SAT") on March 14, 2022 jointly issued Cai Shui 2022 No. 13. This clarified that from January
1, 2022 to December 31, 2024, eligible small enterprises whose first RMB 1,000,000 of annual taxable income is eligible for 75% reduction
on a rate of 20% (i.e., effective rate is 5%) and the income between RMB 1,000,000 and RMB 3,000,000 is eligible for 50% reduction on
a rate of 20% (i.e. effective rate is 10%). For the years ended December 31, 2022 and 2021, MingZhu Pengcheng was eligible to enjoy this
policy.
F-
37
Significant components of the income tax expense
consisted of the following for the years ended December 31,
2022
2021
2020
Current income tax expense
$
732,788
$
138,246
$
376,823
Deferred income tax (benefit) expense
(
202,746
)
(
2,832
)
(
10,381
)
Total
$
530,042
$
135,414
$
366,442
The tax effects of temporary difference that give
rise to the deferred tax assets as of December 31, 2022 and 2021 are $
238,237
and $
35,491
, respectively. Deferred tax assets consist of
the following:
As of
December 31,
2022
As of
December 31,
2021
Deferred tax assets:
Allowance for doubtful accounts
$
238,237
$
35,491
Contingent liabilities
-
-
Net operating loss carryforwards:
PRC
62,492
153,696
HONG KONG
74,305
9,633
375,034
198,820
Less valuation allowance
(
136,797
)
(
163,329
)
Total deferred tax assets
$
238,237
$
35,491
The Company evaluated the recoverable amounts
of deferred tax assets and provided a valuation allowance to the extent that future taxable profits will be available against which the
net operating loss and temporary difference can be utilized. The Company considers both positive and negative factors when assessing the
future realization of the deferred tax assets and applied weigh to the relative impact of the evidences to the extent it could be objectively
verified.
The Company's net operation loss ("NOL")
was mainly from MingZhu Management's cumulative NOL of approximately $
836,000
as of December 31, 2022 which will mostly expire in
2026. Management considers projected future losses outweighs other factors and made a full allowance of related deferred tax assets.
Reconciliation of effective income tax rate is
as follows for the years ended December 31:
December 31,
2021
December 31,
2020
December 31,
2019
PRC statutory tax rate
25.0
%
25.0
%
25.0
%
Effect of tax rate differential
-
1.3
%
-
13.3
%
-
5.2
%
Valuation allowance deferred tax
-
5.6
%
-
27.2
%
4.9
%
Non-deductible items*
3.7
%
-
1.4
%
7.2
%
Effective tax rate
21.8
%
-
16.9
%
31.9
%
*
Non-deductible items mainly arise from expenses not deductible for tax purposes primarily including professional fees in relation to capital market planning and late penalty fees.
Uncertain tax positions
The Company evaluates each uncertain tax position
(including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits
associated with the tax positions. The Company does not anticipate any significant increases or decreases in unrecognized tax benefits
in the next twelve months from December 31, 2022.
Value added tax
The Company is subject to value added tax ("VAT").
Revenue from provision of trucking services, car-hailing and driver management services and car owner services are generally subject to
VAT at the rate of 9%, 6% and 6%.
The Company is entitled to a refund for VAT already paid on goods and services purchased. The VAT balance
is recorded in tax payables on the audited consolidated balance sheets. Revenues are presented net of applicable VAT.
F-
38
Taxes payable consisted of the following:
December 31,
2022
December 31,
2021
VAT taxes payable
$
861,336
$
345,133
Income taxes payable
4,304,739
2,761,201
Other taxes payable
112,361
26,960
Total
$
5,278,436
$
3,133,294
Note 20 – Shareholders' equity
Ordinary shares
MingZhu Cayman was established under the laws
of Cayman Islands on January 2, 2018. The authorized number of ordinary shares was
38,000,000
shares with a par value of approximate $
0.001
(HKD
0.01
) per ordinary share.
With the effect of resolutions passed by board
of directors on February 12, 2020, the authorized number of ordinary shares increased from
38,000,000
to
50,000,000
with a par value of
$
0.001
instead of HKD
0.01
and the issued number of ordinary shares increased from
1,000
to
9,250,000
with a par value of $
0.001
instead
of HKD
0.01
. With the effect of resolution passed by board of directors on May 21, 2020, the issued number of ordinary shares decreased
from
9,250,000
to
9,000,000
.
On October 21, 2020, the Company completed the
initial public offering ("IPO") of
3,000,000
ordinary shares at a public offering price of US$
4.00
per share.
On October 30, 2020, the underwriter and sole
book-runner of the Company's underwritten IPO, has exercised the partial over-allotment option and purchased an additional
350,000
ordinary shares of the Company at the IPO price of US$
4.00
per share.
On December 4, 2020, the underwriter and sole
book-runner of the Company's underwritten IPO, has further exercised the partial over-allotment option and purchased an additional
4,040
ordinary shares of the Company at the IPO price of US$
4.00
per share.
As of December 31, 2020, the authorized number
of ordinary shares is
50,000,000
with a par value of $
0.001
and the issued number of ordinary shares is
12,354,040
.
With the above IPO and over-allotments, the Company
received total gross proceeds of $
13,416,160
. After deducting a sum of $
2,457,357
in underwriting commission and other expenses, the Company
received a total net proceeds of $
10,958,803
.
On March 12, 2021, the Company closed its direct
public offering of
3,333,335
units of its securities (each, a "Unit"), with each Unit consisting of (i) one ordinary share
of the Company, par value $
0.001
per share, and (ii) one warrant to purchase
0.75
ordinary share. The Company sold the Units at a price
of $
6.00
per Unit. The Company received gross proceeds from the Offering, before deducting estimated offering expenses payable by the
Company, of approximately $
18,000,000
.
On April 21, 2021, the underwriter and sole book-runner
of our underwritten IPO, exercised its partial warrant and purchased a total of
214,286
ordinary shares of the Company with no cash in
consideration.
On June 14, 2021, the underwriter and sole book-runner
of our underwritten IPO, exercised its partial warrant and purchased a total of
43,616
ordinary shares of the Company with no cash in
consideration.
On December 29, 2021, the Company entered into
a Share Purchase Agreement (the "SPA") to acquire
100
% of the equity interest of Cheyi (BVI) Limited (the "Cheyi BVI")
which operates its business through its subsidiary Zhejiang Cheyi Network Technology Co., Ltd. (the "Cheyi Network"), an integrated
online car-hailing and driver management services company. Pursuant to the agreement, the total consideration for the acquisition of
100
%
equity ownership of Cheyi BVI is an aggregate of U.S. $
23,470,712
, consisting of the issuance by the Company to the shareholders of Cheyi
BVI an aggregate of
3,189,000
fully paid Company's ordinary shares (being U.S. $
6,760,680
of $
2.12
per share) and payment of $
2,000,000
at closing, and Year-2021 earnout payment of U.S. $
8,826,019
and Year-2022 earnout payment of U.S. $
5,884,013
if the Cheyi BVI's
audited net income for its fiscal year 2021 and 2022 is no less than U.S. $
3,000,000
respectively. The two earnout payments are due 13
months upon the delivery of Cheyi BVI's audited financial statements.
F-
39
On March 14, 2022, the Company entered into a
Share Purchase Agreement with Yinhua which develops and operates a comprehensive auto related service platform to serve auto insurance
companies, and each of the shareholders of the Yinhua. Under terms of the share purchase agreement, we shall pay $
10,076,600
in exchange
for
100
% equity of Yinhua. Of the total consideration to be paid, $
7,078,100
shall be paid in form of
3,826,000
newly issued ordinary
shares of the Company, representing $
1.85
per ordinary share of the Company, and $
1,000,000
upon closing. In addition, a cash earnout
of $
1,998,500
shall be paid if Yinhua achieves a net income target threshold of $
1.3
million during the calendar year of 2022. On March
18, 2022, the parties completed the transaction. Upon the closing of the transaction, the Company acquired
100
% shares outstanding of
the Yinhua, and the Company issued
3,826,000
ordinary shares and paid $
1,000,000
to the sellers.
As of December 31, 2022, the authorized number
of ordinary shares is
50,000,000
with a par value of $
0.001
and the issued number of ordinary shares is
22,960,277
.
The Company believes it is appropriate to reflect
the above transactions as re-denomination and nominal issuance of shares on a retroactive basis similar to stock split or dividend pursuant
to ASC 260. According to the above transactions, the Company has retroactively adjusted the shares and per share data for all periods
presented.
Share subscription receivables
Share subscription receivables represent unpaid
capital contribution from the Company's shareholders of $
847,086
and $
847,086
as of December 31, 2022 and 2021, respectively.
Statutory reserves
In accordance with the relevant PRC laws and regulations,
the Group's subsidiaries in the PRC are required to provide for certain statutory reserves, which are appropriated from net profit
as reported in accordance with PRC accounting standards. The Group's subsidiaries in the PRC are required to allocate at least
10
%
of their after-tax profits to the general reserve until such reserve has reached
50
% of their respective registered capital. Appropriations
to other types of reserves in accordance with relevant PRC laws and regulations are to be made at the discretion of the board of directors
of each of the Group's subsidiaries in the PRC. The statutory reserves are restricted from being distributed as dividends under
PRC laws and regulations. The statutory reserves recorded by the Group's subsidiaries in the PRC were $
1,036,841
and $
916,148
as
of December 31, 2022 and 2021, respectively.
Restricted assets
As a result of these PRC laws and regulations
and the requirement that distributions by the Group's subsidiaries in the PRC can only be paid out of distributable profits reported
in accordance with PRC accounting standards, the Group's subsidiaries in the PRC are restricted from transferring a portion of their
net assets to the Company. The restricted amounts include the paid-in capital and the statutory reserves of the Group's subsidiaries
in the PRC. The aggregate amount of paid-in capital and statutory reserves, which represented the amount of net assets of the Group's
subsidiaries in the PRC not available for distribution, was $
Nil
and $
Nil
as of December 31, 2022 and 2021, respectively.
Note 21 – Commitments and Contingencies
Guarantee Commitments
In November 2017, the MingZhu entered into guarantee
agreements for a capital lease of $
2,531,453
to a subcontractor. The guarantee period was from November 2017 to January 2022. In November
2017, the MingZhu entered into a guarantee agreement in which MingZhu Logistics, a related party, guaranteed for the above-mentioned capital
lease. The Company assessed its performance guarantee obligations as of December 31, 2021 in accordance with ASC 460, Guarantees,
no financial impact was found.
Lease Commitments
The Company entered into a lease for office space
located in Shenzhen, Guangdong, China for the period from November 21, 2018 to November 20, 2023. The Company's commitments for
minimum lease payment under these operating leases as of December 31, 2022 are listed in section "Note 12 – Leases".
F-
40
Contingencies
From time to time, the Company is party to certain
legal proceedings, as well as certain asserted and unasserted claims.
On January 20, 2022, Shenzhen Xincang Freight
Co., Ltd. submitted
the Civil Complaint to The People's Court of Yantian District, requesting the defendant Jian Yang to compensate
for the economic loss of RMB 233,055, judgment of the defendant Yangang Pearl for Jian Yang's compensation liability to assume joint
liability. According to the civil order issued by The People's Court of Yantian District on January 27, 2022, the applicant Shenzhen
Xincang Freight Co., Ltd. applies for property preservation in the case of the liability dispute between the applicant Shenzhen Xincang
Freight Co., Ltd. of seizing and freezing the property worth RMB 234,990.12 under the name of the respondent Mingzhu. According to the
notice of response issued by The People's Court of Yantian District, on February 10, 2022, the case of the liability dispute between
the plaintiff and the defendant Mingzhu and Jian Yang was filed by the Court on January 21, 2022.
A trial is scheduled for March 18, 2022.
As of the date of this annual report, the case had been concluded and the Company had paid out the claimed amount of compensation.
In accordance with ASC No. 450-20, "Loss
Contingencies", the Company will record accruals for above loss contingencies when it is probable that a liability has been incurred
and the amount of loss can be reasonably estimated. There are no other material loss contingencies than above-mentioned ones for the years
ended December 31, 2022 and 2021.
Note 22 – Segment information
The Company's CODM has been identified as
its CEO, who reviews the financial results when making decisions about allocating resources and assessing performance separately of three
business segments as below:
●
trucking
business, conducted by Mingzhu and its subsidiaries and Feipeng BVI, its subsidiaries and its VIEs;
●
car-hailing
and driver management services business, conducted by Cheyi BVI, its subsidiaries and its VIEs;
●
car
owner services business, conducted by Yinhua, its subsidiaries and its VIEs
and therefore, the Company has three reportable segments. The Company's
long-lived assets are substantially all located in the PRC and all of the Company's revenues are derived from the PRC.
The acquisition of Cheyi BVI, Yinhua, Feipeng
BVI was completed on December 29, 2021, March 14, 2022 and December 20, 2022, in accordance with the ASC-805, the Company only is able
to account the revenue generated by Cheyi BVI, Yinhua, Feipeng BVI and their subsidiaries after the acquisition is completed. The Company
had carefully evaluated the amount of such revenue generated by Cheyi BVI, Yinhua, Feipeng BVI and their subsidiaries with reasonable
estimates.
Segment information for the years as of December
31, 2022 and 2021 is as follows:
As of December 31,
2022
2021
Total assets
Trucking services
$
75,947,153
$
64,743,182
Car-hailing and driver management services
19,600,724
17,606,804
Car owner services
15,908,978
-
Total
$
111,456,855
$
82,349,986
Total Property and equipment, net
Trucking services
$
1,459,760
$
2,243,651
Car-hailing and driver management services
7,613,938
9,980,931
Car owner services
-
-
Total
$
9,073,698
$
12,224,582
As of December 31, 2022, the balance of goodwill represented an amount
of $
14,157,570
that arose from acquisition of Cheyi BVI in 2021, $
5,364,709
that arose from acquisition of Yinhua in March 2022 and $
13,715,130
that arose from acquisition of Feipeng BVI in December 2022.
Note 23 – Subsequent events
No significant event occurred after the date of
December 31, 2022.
Note 24 – Reclassification
Certain prior year amounts have been reclassified
for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations and performance
position. A reclassification has been made to the Consolidated Balance Sheet and Consolidated Statements of Cash Flows for the fiscal
year ended December 31, 2020, to reclassify the others receivable.
F-
41
Note 25 – Condensed financial information
of the parent company (unaudited)
The Company performed a test on the restricted
net assets of consolidated subsidiary in accordance with Securities and Exchange Commission Regulation S-X Rule 4-08 (3), "General
Notes to Financial Statements" and concluded that it was applicable for the Company to disclose the financial statements for the
parent company.
The subsidiaries did not pay any dividend to the
Company for the years presented. For the purpose of presenting parent only financial information, the Company records its investment in
its subsidiary under the equity method of accounting. Such investment is presented on the separate condensed balance sheets of the Company
as "Investment in subsidiary" and the income of the subsidiary is presented as "share of income of subsidiary".
Certain information and footnote disclosures generally included in financial statements prepared in accordance with U.S. GAAP have been
condensed and omitted.
The Company did not have other commitments, long-term
obligations, or guarantees as of December 31, 2022 and 2021.
PARENT COMPANY BALANCE SHEETS
December 31,
2022
December 31,
2021
ASSETS
CURRENT ASSETS:
Cash
$
1,139,015
$
3,079,046
Prepayments
222,556
4,701,968
Amount due from related parties
14,080,100
14,083,531
Total current assets
15,441,671
21,864,545
NON-CURRENT ASSET
Investment in subsidiaries and VIEs
48,087,748
25,804,389
Total assets
$
63,529,419
$
47,668,934
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
$
21,497,787
$
-
SHAREHOLDERS' EQUITY
Ordinary shares: $
0.001
par value,
50,000,000
shares authorized,
22,960,277
and
19,134,277
shares issued and outstanding as of December 31, 2022 and 2021, respectively*
22,960
19,134
Share subscription receivables
(
847,086
)
(
847,086
)
Additional paid-in capital
35,678,430
41,792,071
Statutory reserves
1,036,841
916,148
Retained earnings
7,704,538
5,929,043
Accumulated other comprehensive (loss) income
(
1,564,051
)
(
140,376
)
Total shareholders' equity
42,031,632
47,668,934
Total liabilities and shareholders' equity
$
63,529,419
$
47,668,934
*
Giving retroactive effect to the re-denomination and nominal issuance of shares effected on February 12, 2020.
F-
42
PARENT COMPANY STATEMENT OF INCOME (LOSS) AND COMPREHENSIVE INCOME
(LOSS)
For the Year Ended
December 31,
2022
2021
2020
INCOME (LOSS) OF SUBSIDIARIES
$
2,325,434
$
(
490,484
)
$
950,045
COSTS AND EXPENSES
General and Administrative expenses
429,246
447,929
167,749
Total costs and expenses
429,246
447,929
167,749
INCOME (LOSS) FROM OPERATION
1,896,188
(
938,413
)
782,296
INCOME (LOSS) BEFORE INCOME TAXES
1,896,188
(
938,413
)
782,296
PROVISION FOR INCOME TAXES
-
-
NET INCOME (LOSS)
1,896,188
(
938,413
)
782,296
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment
(
1,409,431
)
(
640,974
)
752,828
COMPREHENSIVE INCOME (LOSS)
$
486,757
$
(
1,579,387
)
$
1,535,124
PARENT COMPANY STATEMENT OF CASH FLOWS
For the Year Ended
December 31,
2022
2021
2020
Cash flows from operating activities:
Net income (loss)
$
1,896,188
$
(
938,413
)
$
782,296
Adjustments to reconcile net income to cash used in operating activities:
Equity income of subsidiaries
2,325,434
490,484
(
950,045
)
Prepayments
(
1,940,031
)
(
4,400,661
)
-
Net cash provided by (used in) operating activities
2,281,591
(
4,848,590
)
(
167,749
)
Cash flows from financing activities:
Amounts advanced from related parties
(
4,221,622
)
(
10,556,693
)
(
166,872
)
Proceeds from private placement
-
18,465,009
-
Net cash provided by (used in) financing activities
-
7,908,316
(
166,872
)
Effect of exchange rate change on cash
-
2,444
82
Net (decrease) increase in cash
(
1,940,031
)
3,062,170
(
795
)
Cash at beginning of the year
3,079,046
16,876
17,671
Cash at end of the year
$
1,139,015
$
3,079,046
$
16,876
F-43