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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B></B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNITED STATES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>WASHINGTON, D.C. 20549</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FORM 20-F</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Mark One)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&#9744;</B></FONT><B>
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>OR</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&#9746;</B></FONT><B>
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the fiscal year ended December 31, 2022</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>OR</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&#9744;</B></FONT><B>
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the transition period from ___________ to ___________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>OR</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&#9744;</B></FONT><B>
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Commission file number: <B><U>001-35715</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>JX Luxventure
limited</B></FONT></P>

<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>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>Not Applicable</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Translation of Registrant&rsquo;s Name Into English)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>Republic of the Marshall Islands</U></B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Bin Hai Da Dao No. 270</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Lang Qin Wan Guo Ji Du Jia Cun Zong He Lou</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Xiu Ying District</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Haikou City, Hainan Province 570100</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>People&rsquo;s Republic of China</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Ms. Sun Lei, Chief Executive Officer</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Bin Hai Da Dao No. 270</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Lang Qin Wan Guo Ji Du Jia Cun Zong He Lou</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Xiu Ying District</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Haikou City, Hainan Province 570100</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>People&rsquo;s Republic of China</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Tel: + (86) 595 8889 6198</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Fax: (86) 595 8850 5328</B></P>

<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>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="white-space: nowrap; width: 32%; border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Title of Each Class</B></FONT></TD>
    <TD STYLE="white-space: nowrap; width: 2%; text-align: center">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; width: 32%; border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Trading Symbol(s)</B></FONT></TD>
    <TD STYLE="white-space: nowrap; width: 2%; text-align: center">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; width: 32%; border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Name of Each Exchange On Which Registered</B></FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: #CCEEFF">
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Common Stock, $0.0001 par value</FONT></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">JXJT</FONT></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">NASDAQ Capital Market</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Securities registered or to be registered pursuant
to Section 12(g) of the Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><U>None</U></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><U>None</U></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate the number of outstanding shares of each
of the issuer&rsquo;s classes of capital or common stock as of the close of the period covered by the annual report (December 31, 2022):
6,063,192.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes <FONT STYLE="font-family: Times New Roman, Times, Serif">&#9744;</FONT>&nbsp;&nbsp;&nbsp;No
<FONT STYLE="font-family: Times New Roman, Times, Serif">&#9746;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If this report is an annual or transition report,
indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934. Yes <FONT STYLE="font-family: Times New Roman, Times, Serif">&#9744;</FONT>&nbsp;&nbsp;&nbsp;No <FONT STYLE="font-family: Times New Roman, Times, Serif">&#9746;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Note &ndash; Checking the box above will not relieve
any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations
under those Sections.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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. Yes <FONT STYLE="font-family: Times New Roman, Times, Serif">&#9746;</FONT>&nbsp;&nbsp;&nbsp;No <FONT STYLE="font-family: Times New Roman, Times, Serif">&#9744;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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 (&sect;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
<FONT STYLE="font-family: Times New Roman, Times, Serif">&#9746;</FONT>&nbsp;&nbsp;&nbsp;No <FONT STYLE="font-family: Times New Roman, Times, Serif">&#9744;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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 &ldquo;large
accelerated filer, &ldquo;accelerated filer,&rdquo; and &ldquo;emerging growth company&rdquo; in Rule 12b-2 of the Exchange Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="white-space: nowrap; width: 18%"><FONT STYLE="font-size: 10pt">Large Accelerated Filer </FONT></TD>
    <TD STYLE="white-space: nowrap; width: 10%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744;</FONT></TD>
    <TD STYLE="white-space: nowrap; width: 13%"><FONT STYLE="font-size: 10pt">Accelerated Filer </FONT></TD>
    <TD STYLE="white-space: nowrap; width: 10%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744;</FONT></TD>
    <TD STYLE="white-space: nowrap; width: 15%"><FONT STYLE="font-size: 10pt">Non-Accelerated Filer</FONT></TD>
    <TD STYLE="white-space: nowrap; width: 7%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&#9746;</FONT></TD>
    <TD STYLE="white-space: nowrap; width: 26%"><FONT STYLE="font-size: 10pt">Emerging Growth Company </FONT></TD>
    <TD STYLE="white-space: nowrap; width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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&dagger; provided pursuant to Section 13(a) of the Exchange
Act. <FONT STYLE="font-family: Times New Roman, Times, Serif">&#9744;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&dagger; The term &ldquo;new or revised financial
accounting standard&rdquo; refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification
after April 5, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark whether the registrant
has filed a report on and attestation to its management&rsquo;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. <FONT STYLE="font-family: Times New Roman, Times, Serif">&#9744;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">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>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0">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&rsquo;s executive officers during the relevant
recovery period pursuant to &sect;240.10D-1(b). &#9744;</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;</FONT></P>

<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>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 15%"><FONT STYLE="font-size: 10pt">U.S. GAAP <FONT STYLE="font-family: Times New Roman, Times, Serif">&#9744;</FONT></FONT></TD>
    <TD STYLE="width: 70%">
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">International Financial Reporting Standards as
    issued by the</P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">International Accounting Standards Board <FONT STYLE="font-family: Times New Roman, Times, Serif">&#9746;</FONT></P></TD>
    <TD STYLE="width: 15%; text-align: center"><FONT STYLE="font-size: 10pt">Other <FONT STYLE="font-family: Times New Roman, Times, Serif">&#9744;</FONT></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If &ldquo;Other&rdquo; has been checked in response
to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. <FONT STYLE="font-family: Times New Roman, Times, Serif">&#9744;</FONT>
Item 17 <FONT STYLE="font-family: Times New Roman, Times, Serif">&#9744;</FONT> Item 18</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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).&nbsp;Yes <FONT STYLE="font-family: Times New Roman, Times, Serif">&#9744;</FONT>&nbsp;&nbsp;&nbsp;No
<FONT STYLE="font-family: Times New Roman, Times, Serif">&#9746;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PAST FIVE YEARS)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark whether the registrant
has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent
to the distribution of securities under a plan confirmed by a court. Not Applicable</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Annual Report on Form 20-F</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Year Ended December 31, 2022</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>TABLE OF CONTENTS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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    <TD STYLE="vertical-align: top; text-align: justify; width: 75%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: center; width: 10%"><FONT STYLE="font-size: 10pt"><B>Page
    </B></FONT></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"><A HREF="#g_001"><FONT STYLE="font-size: 10pt"><B>PART I</B></FONT></A></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;</B></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>ITEM 1.</B></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; text-align: justify"><A HREF="#g_002"><FONT STYLE="font-size: 10pt"><B>IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>1</B></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>A.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_003"><FONT STYLE="font-size: 10pt"><B>Directors and Senior Management</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>1</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>B.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_004"><FONT STYLE="font-size: 10pt"><B>Advisors</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>1</B></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>C.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_005"><FONT STYLE="font-size: 10pt"><B>Auditors</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>1</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;</B></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>ITEM 2.</B></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; text-align: justify"><A HREF="#g_006"><FONT STYLE="font-size: 10pt"><B>OFFER STATISTICS AND EXPECTED TIMETABLE</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>1</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>A.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_007"><FONT STYLE="font-size: 10pt"><B>Offer Statistics</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>1</B></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>B.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_008"><FONT STYLE="font-size: 10pt"><B>Method and Expected Timetable</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>1</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;</B></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>ITEM 3.</B></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; text-align: justify"><A HREF="#g_009"><FONT STYLE="font-size: 10pt"><B>KEY INFORMATION</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>1</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>A.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_010"><FONT STYLE="font-size: 10pt"><B>[Reserved]</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>1</B></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>B.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_011"><FONT STYLE="font-size: 10pt"><B>Capitalization and Indebtedness</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>1</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>C.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_012"><FONT STYLE="font-size: 10pt"><B>Reasons for the Offer and Use of Proceeds</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>1</B></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>D.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_013"><FONT STYLE="font-size: 10pt"><B>Risk Factors</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>1</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;</B></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>ITEM 4.</B></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; text-align: justify"><A HREF="#g_014"><FONT STYLE="font-size: 10pt"><B>INFORMATION ON THE COMPANY</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>36</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>A.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_015"><FONT STYLE="font-size: 10pt"><B>History and Development of the Company</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>36</B></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>B.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_017"><FONT STYLE="font-size: 10pt"><B>Business Overview</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>40</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>C.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_018"><FONT STYLE="font-size: 10pt"><B>Organizational Structure</B></FONT></A></TD>
    <TD STYLE="padding-left: -0.125in; vertical-align: bottom; text-align: center"><B>63</B></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>D.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_019"><FONT STYLE="font-size: 10pt"><B>Property, Plants and Equipment</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>63</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;</B></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>ITEM 4A.</B></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; text-align: justify"><A HREF="#g_020"><FONT STYLE="font-size: 10pt"><B>UNRESOLVED STAFF COMMENTS</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>63</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;</B></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>ITEM 5.</B></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; text-align: justify"><A HREF="#g_021"><FONT STYLE="font-size: 10pt"><B>OPERATING AND FINANCIAL REVIEW AND PROSPECTS</B></FONT></A></TD>
    <TD STYLE="padding-left: -0.125in; vertical-align: bottom; text-align: center"><B>63</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>A.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#s_001"><FONT STYLE="font-size: 10pt"><B>Operating Results</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>65</B></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>B.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#s_002"><FONT STYLE="font-size: 10pt"><B>Liquidity and Capital Resources</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>70</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>C.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#s_003"><FONT STYLE="font-size: 10pt"><B>Research and Development, Patents and Licenses, Etc.</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>72</B></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>D.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#s_004"><FONT STYLE="font-size: 10pt"><B>Trend Information</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>72</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>E.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#s_005"><FONT STYLE="font-size: 10pt"><B>Off Balance Sheet Arrangements</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>72</B></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>F.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#s_006"><FONT STYLE="font-size: 10pt"><B>Tabular Disclosure of Contractual Obligations</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>72</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>G.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#s_007"><FONT STYLE="font-size: 10pt"><B>Safe Harbor</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>83</B></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>ITEM 6.</B></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; text-align: justify"><A HREF="#g_028"><FONT STYLE="font-size: 10pt"><B>DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>84</B></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>A.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_029"><FONT STYLE="font-size: 10pt"><B>Directors and Senior Management</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>84</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>B.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_030"><FONT STYLE="font-size: 10pt"><B>Compensation</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>85</B></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>C.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_031"><FONT STYLE="font-size: 10pt"><B>Board Practices</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>87</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>D.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_032"><FONT STYLE="font-size: 10pt"><B>Employees</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>88</B></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>E.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_033"><FONT STYLE="font-size: 10pt"><B>Share Ownership</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>88</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;</B></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>ITEM 7.</B></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; text-align: justify"><A HREF="#g_034"><FONT STYLE="font-size: 10pt"><B>MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>89</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>A.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_035"><FONT STYLE="font-size: 10pt"><B>Major Shareholders</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>89</B></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>B.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_036"><FONT STYLE="font-size: 10pt"><B>Related Party Transactions</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>89</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><B>C.</B></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_037"><FONT STYLE="font-size: 10pt"><B>Interests of Experts and Counsel</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>90</B></TD></TR>
  </TABLE>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>ITEM 8.</B></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; text-align: justify"><A HREF="#g_038"><FONT STYLE="font-size: 10pt"><B>FINANCIAL INFORMATION</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>90</B></TD></TR>
  <TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top; width: 10%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 5%"><FONT STYLE="font-size: 10pt"><B>A.</B></FONT></TD>
    <TD STYLE="vertical-align: top; width: 75%; text-align: justify"><A HREF="#g_039"><FONT STYLE="font-size: 10pt"><B>Consolidated Statements and Other Financial Information</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; width: 10%; text-align: center"><B>90</B></TD></TR>
  <TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>B.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_040"><FONT STYLE="font-size: 10pt"><B>Significant Changes</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>91</B></TD></TR>
  <TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;</B></TD></TR>
  <TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>ITEM 9.</B></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; text-align: justify"><A HREF="#g_041"><FONT STYLE="font-size: 10pt"><B>THE OFFER AND LISTING</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>91</B></TD></TR>
  <TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>A.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_042"><FONT STYLE="font-size: 10pt"><B>Offer and Listing Details</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>92</B></TD></TR>
  <TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>B.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_043"><FONT STYLE="font-size: 10pt"><B>Plan of Distribution</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>92</B></TD></TR>
  <TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>C.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_044"><FONT STYLE="font-size: 10pt"><B>Markets</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>92</B></TD></TR>
  <TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>D.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_045"><FONT STYLE="font-size: 10pt"><B>Selling Shareholders</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>92</B></TD></TR>
  <TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>E.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_046"><FONT STYLE="font-size: 10pt"><B>Dilution</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>92</B></TD></TR>
  <TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>F.</B></FONT></TD>
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#g_047"><FONT STYLE="font-size: 10pt"><B>Expenses of the Issue</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>92</B></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>ITEM 10.</B></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_048"><FONT STYLE="font-size: 10pt"><B>ADDITIONAL INFORMATION</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>92</B></TD></TR>
  <TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top; width: 10%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 5%; padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt"><B>A.</B></FONT></TD>
    <TD STYLE="vertical-align: top; width: 75%; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_049"><FONT STYLE="font-size: 10pt"><B>Share Capital</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; width: 10%; text-align: center"><B>92</B></TD></TR>
  <TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt"><B>B.</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_050"><FONT STYLE="font-size: 10pt"><B>Memorandum and Articles of Association</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>92</B></TD></TR>
  <TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt"><B>C.</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_051"><FONT STYLE="font-size: 10pt"><B>Material Contracts</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>97</B></TD></TR>
  <TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt"><B>D.</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_052"><FONT STYLE="font-size: 10pt"><B>Exchange Controls</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>97</B></TD></TR>
  <TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt"><B>E.</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_053"><FONT STYLE="font-size: 10pt"><B>Taxation</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>99</B></TD></TR>
  <TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt"><B>F.</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_054"><FONT STYLE="font-size: 10pt"><B>Dividends and Paying Agents</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>104</B></TD></TR>
  <TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt"><B>G.</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_055"><FONT STYLE="font-size: 10pt"><B>Statement by Experts</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>104</B></TD></TR>
  <TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt"><B>H.</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_056"><FONT STYLE="font-size: 10pt"><B>Documents on Display</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>105</B></TD></TR>
  <TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt"><B>I.</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_057"><FONT STYLE="font-size: 10pt"><B>Subsidiary Information</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>105</B></TD></TR>
  <TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-indent: -9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;</B></TD></TR>
  <TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>ITEM 11.</B></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_058"><FONT STYLE="font-size: 10pt"><B>QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>105</B></TD></TR>
  <TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;</B></TD></TR>
  <TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>ITEM 12.</B></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_059"><FONT STYLE="font-size: 10pt"><B>DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>106</B></TD></TR>
  <TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt"><B>A.</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_060"><FONT STYLE="font-size: 10pt"><B>Debt Securities</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>106</B></TD></TR>
  <TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt"><B>B.</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_061"><FONT STYLE="font-size: 10pt"><B>Warrants and Rights</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>106</B></TD></TR>
  <TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt"><B>C.</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_062"><FONT STYLE="font-size: 10pt"><B>Other Securities</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>106</B></TD></TR>
  <TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt"><B>D.</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_063"><FONT STYLE="font-size: 10pt"><B>American Depositary Shares</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>106</B></TD></TR>
  <TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-indent: -9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;</B></TD></TR>
  <TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top"><A HREF="#g_064"><FONT STYLE="font-size: 10pt"><B>PART II</B></FONT></A></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-indent: -9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>107</B></TD></TR>
  <TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-indent: -9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;</B></TD></TR>
  <TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>ITEM 13.</B></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_065"><FONT STYLE="font-size: 10pt"><B>DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>107</B></TD></TR>
  <TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;</B></TD></TR>
  <TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>ITEM 14.</B></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><A HREF="#g_066"><FONT STYLE="font-size: 10pt"><B>MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>107</B></TD></TR>
  <TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;</B></TD></TR>
  <TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>ITEM 15.</B></FONT></TD>
    <TD COLSPAN="2" STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_067"><FONT STYLE="font-size: 10pt"><B>CONTROLS AND PROCEDURES</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>107</B></TD></TR>
  <TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt"><B>A.</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_068"><FONT STYLE="font-size: 10pt"><B>Disclosure Controls and Procedures</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>107</B></TD></TR>
  <TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt"><B>B.</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_069"><FONT STYLE="font-size: 10pt"><B>Management&rsquo;s Annual Report on Internal Control Over Financial Reporting</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>107</B></TD></TR>
  <TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt"><B>C.</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_070"><FONT STYLE="font-size: 10pt"><B>Attestation Report of the Registered Public Accounting Firm</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>108</B></TD></TR>
  <TR STYLE="background-color: white">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt"><B>D.</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_071"><FONT STYLE="font-size: 10pt"><B>Changes in Internal Controls over Financial Reporting</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>108</B></TD></TR>
</TABLE>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; width: 10%"><FONT STYLE="font-size: 10pt"><B>ITEM 16A.</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt; width: 80%"><A HREF="#g_072"><FONT STYLE="font-size: 10pt"><B>AUDIT COMMITTEE FINANCIAL EXPERT</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center; width: 10%"><B>108</B></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>ITEM 16B.</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_073"><FONT STYLE="font-size: 10pt"><B>CODE OF ETHICS</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>108</B></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>ITEM 16C.</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_074"><FONT STYLE="font-size: 10pt"><B>PRINCIPAL ACCOUNTANT FEES AND SERVICES</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>108</B></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>ITEM 16D.</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_075"><FONT STYLE="font-size: 10pt"><B>EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt"><B>109</B></FONT></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>ITEM 16E.</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><A HREF="#g_076"><FONT STYLE="font-size: 10pt"><B>PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt"><B>109</B></FONT></TD></TR>

<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>ITEM 16F.</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_077"><FONT STYLE="font-size: 10pt"><B>CHANGES IN REGISTRANT&rsquo;S CERTIFYING ACCOUNTANT</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt"><B>109</B></FONT></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>ITEM 16G.</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_078"><FONT STYLE="font-size: 10pt"><B>CORPORATE GOVERNANCE</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt"><B>109</B></FONT></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>ITEM 16H.</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_079"><FONT STYLE="font-size: 10pt"><B>MINE SAFETY DISCLOSURE</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt"><B>109</B></FONT></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; text-align: justify"><FONT STYLE="font-size: 10pt"><B>ITEM 16I.</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-indent: -9pt"><A HREF="#g_080"><FONT STYLE="font-size: 10pt"><B>DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt"><B>109</B></FONT></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"><A HREF="#g_081"><FONT STYLE="font-size: 10pt"><B>PART III</B></FONT></A></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;</B></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><B>&nbsp;</B></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt"><B>ITEM 17.</B></FONT></TD>
    <TD STYLE="vertical-align: top; padding-left: 9pt; text-align: justify; text-indent: -9pt"><A HREF="#g_082"><FONT STYLE="font-size: 10pt"><B>FINANCIAL STATEMENTS</B></FONT></A></TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt"><B>110</B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>INTRODUCTORY
NOTES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Use
of Certain Defined Terms</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Except
as otherwise indicated by the context and for the purposes of this annual report only, references in this report to:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;JX Luxventure,&rdquo;
    &ldquo;we,&rdquo; &ldquo;us,&rdquo; &ldquo;our&rdquo; and the &ldquo;Company&rdquo; are to JX Luxventure Limited, a company organized
    in the Republic of the Marshall Islands;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;KBS International,&rdquo;
    refers to KBS International Holding Inc., a Nevada corporation, which was dissolved in August 2014]</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;Hongri PRC,&rdquo;
    refers to Hongri (Fujian) Sports Goods Co., Ltd., a direct wholly-owned subsidiary of Hongri International, which was our indirect
    wholly-owned subsidiary organized in the PRC until October 19, 2022];</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;Hongri International&rdquo;
    are to Hongri International Holdings Limited, a company organized in the BVI, was our wholly-owned subsidiary until October
    19, 2022;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;BVI&rdquo; are to
    the British Virgin Islands;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;Hong Kong&rdquo;
    are to the Hong Kong Special Administrative Region of the People&rsquo;s Republic of China;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;PRC&rdquo; and &ldquo;China&rdquo;
    are to the People&rsquo;s Republic of China;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;SEC&rdquo; are to
    the Securities and Exchange Commission;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;Exchange Act&rdquo;
    are to the Securities Exchange Act of 1934, as amended;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;Securities Act&rdquo;
    are to the Securities Act of 1933, as amended;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;Renminbi&rdquo;
    and &ldquo;RMB&rdquo; are to the legal currency of China; and</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;U.S. dollars,&rdquo;
    &ldquo;dollars&rdquo; and &ldquo;$&rdquo; are to the legal currency of the United States.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;Flower Crown&rdquo;
    are to Flower Crown Holding, which is our wholly-owned subsidiary organized in Cayman Islands.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;Flower Crown HK&rdquo;
    are to Flower Crown (China) Holding Group Co., Limited, which is a direct wholly-owned subsidiary of Flower Crown and our indirect
    wholly-owned subsidiary organized in Hong Kong.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;Kim Hyun Tianjin&rdquo;
    are to Kim Hyun Technology (Tianjin) Co., Ltd., which is a direct wholly-owned subsidiary of Flower Crown HK and our indirect wholly
    owned subsidiary organized in PRC.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;JX Hainan&rdquo;
    or &ldquo;WOFE&rdquo; are to Jin Xuan (Hainan) Holding Co., Ltd, which is our wholly owned subsidiary organized in PRC.</FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;Jin Xuan Luxury
    Tourism&rdquo; are to Jin Xuan Luxury Tourism (Hainan) Digital Technology Co., Ltd, which is a limited liability company organized
    in PRC and wholly owned by the WFOE.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&ldquo;Heyang Travel&rdquo;
    are to Beijing Heyang International Travel Service Co., Ltd., which is a wholly owned subsidiary of Jin Xuan Luxury Tourism organized
    in PRC.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Cautionary
Note Regarding Forward-Looking Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition to historical information, this annual
report on Form 20-F (the &ldquo;Annual Report&rdquo;) contains forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. We use words such as &ldquo;believe,&rdquo; &ldquo;expect,&rdquo; &ldquo;anticipate,&rdquo; &ldquo;project,&rdquo;
&ldquo;target,&rdquo; &ldquo;plan,&rdquo; &ldquo;optimistic,&rdquo; &ldquo;intend,&rdquo; &ldquo;aim,&rdquo; &ldquo;will&rdquo; or similar
expressions which are intended to identify forward-looking statements. Such statements include, among others, those concerning market
and industry segment growth and demand and acceptance of new and existing products; any projections of sales, earnings, revenue, margins
or other financial items; any statements of the plans, strategies and objectives of management for future operations; and any statements
regarding future economic conditions or performance, as well as all assumptions, expectations, predictions, intentions or beliefs about
future events. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks
and uncertainties, as well as assumptions, which, if they were to ever materialize or prove incorrect, could cause the results of the
Company to differ materially from those expressed or implied by such forward-looking statements. Potential risks and uncertainties include,
among other things, the possibility that we may not be able to maintain or increase our net revenues and profits due to our failure to
execute our business expansion plan, changes in domestic and foreign laws, regulations and taxes, changes in economic conditions, uncertainties
related to China&rsquo;s legal system and economic, political and social events in China, a general economic downturn, a downturn in the
securities markets, and other risks and uncertainties which are generally set forth under Item 3 &ldquo;<I>Key information&mdash;D. Risk
Factors&rdquo; and elsewhere in this Annual Report.</I></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Readers
are urged to carefully review and consider the various disclosures made by us in this report and our other filings with the SEC. These
reports attempt to advise interested parties of the risks and factors that may affect our business, financial condition and results of
operations and prospects. The forward-looking statements made in this report speak only as of the date hereof and we disclaim any obligation,
except as required by law, to provide updates, revisions or amendments to any forward-looking statements to reflect changes in our expectations
or future events.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 26, 2023, the Company effected a one-for-ten (1-for-10) reverse stock split of the Company&rsquo;s issued and outstanding shares
of common stock, $0.0001 par value per share (the &ldquo;Common Stock&rdquo;). Previously, on February 9, 2017, the Company effective
a one-for-fifteen (1-for-15) reverse stock split of the Company&rsquo;s issued and outstanding shares of Common Stock. Unless specified
otherwise, and except as provided in the financial statements and footnotes thereto, all references in this Annual Report to share and
per share data have been adjusted, including historical data which has been retroactively adjusted, to give effect to these reverse stock
splits.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><A NAME="g_001"></A>PART
I</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><A NAME="g_002"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>ITEM&nbsp;1.
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><A NAME="g_003"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>A.
Directors and Senior Management</B></FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><A NAME="g_004"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>B.
Advisors</B></FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><A NAME="g_005"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>C.
Auditors</B></FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><A NAME="g_006"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>ITEM&nbsp;2.
OFFER STATISTICS AND EXPECTED TIMETABLE</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><A NAME="g_007"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>A.
Offer Statistics</B></FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><A NAME="g_008"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>B.
Method and Expected Timetable</B></FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><A NAME="g_009"></A>ITEM&nbsp;3.
KEY INFORMATION</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><A NAME="g_010"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>A.
</B>[Reserved] </FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><A NAME="g_011"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>B.
Capitalization and Indebtedness</B></FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><A NAME="g_012"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>C.
Reasons for the Offer and Use of Proceeds</B></FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><A NAME="g_013"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>D.
Risk Factors</B></FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>An
investment in our Common Stock involves a high degree of risk. You should carefully consider the risks described below, together with
all of the other information included in this annual report, before making an investment decision. </I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><I>In
addition to the other information included in this annual report, including the matters addressed in the section of the annual report
entitled &ldquo;Cautionary Note Regarding Forward-Looking Statements&rdquo; and in our financial statements and the related notes, you
should consider carefully the risks described below. The risks and uncertainties described below are not the only risks and uncertainties
we may face. Additional risks and uncertainties not presently known to us, or that we currently consider immaterial could also negatively
affect our business, financial condition, results of operations, prospects, profits and stock prices. If any of the risks described below
actually occur, our business, financial condition, results of operations, prospects, profits and stock prices could be materially adversely
affected.</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>If
we encounter any of the risks described above or if we are otherwise unable to establish or successfully operate online shops or additional
production capacity, we may be unable to grow our business and revenues, reduce our operating costs, maintain our competitiveness or
improve our profitability and, consequently, our business, financial condition, results of operations and prospects will be adversely
affected.</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>RISKS
RELATED TO OUR BUSINESS </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Risks
Related to our Cross-Border Merchandise and Tourism Industries</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
industry is highly competitive and we may not be able to compete successfully against current and future competitors. <FONT STYLE="background-color: white">If
we are unable to compete effectively, we may lose customers and our financial results may be negatively affected.</FONT></I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
face intense competition in the cross-bordered&nbsp;merchandise and tourism&nbsp;industries in China. We expect greater competition in
the future from existing players and new market entrants. Some of our current and future competitors may have greater brand recognition
and financial and other resources than we do, which may make it more difficult for us to maintain or gain market share.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
we are not able to effectively compete against current or future competitors, our business, financial condition and results of operations
could suffer. Increased competition may result in higher pricing pressure, reducing our ability to charge competitive prices for our
products and services and decreased market share, any of which could materially and negatively affect our business, financial condition
and results of operation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>If
we fail to effectively manage our growth, our business, financial condition and operating results could be harmed.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As we continue to expand our cross-border merchandise and tourism business,
our continued growth could strain our existing resources, and we could experience ongoing challenges, including:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">managing
                                            our operational, administrative and financial capabilities and other resources;</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                                                                                                                                                                                                                                                 </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">managing
                                            our brand portfolio, including further expanding our products and services;</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                                                                                                                                                                                                                                             </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">expanding
                                            marketing channels and deepening end customer outreaches;</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                                                                                                                                                                                                                            </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">staying
                                            abreast of the evolving industry demands and market developments and catering to end users&rsquo;
                                            changing tastes of our business customers;</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                                                    </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">developing
                                            and applying technologies necessary to support our expanded operations;</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                                                                                                                                                                                                                                           </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">effectively
                                            managing our supply chain;</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                                                                                                                                                                                               </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">responding
                                            to changes in the regulatory environment;</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                                                                                                                                                                                                             </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">exploring
                                            new market opportunities; and</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                                                                                                                                                                                                </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">addressing
                                            other challenges resulting from our expansion.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
efforts to address the potential challenges on our way to expansion require significant managerial, financial and human resources. We
cannot assure you that we will be able to effectively or timely address operating difficulties and challenges to keep up with our growth.
If we are unable to successfully address these difficulties, risks and uncertainties, our business, financial conditions and results
of operations could be materially and adversely affected.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
business depends on the continued success of our growing brand portfolio and if we fail to maintain and expand our brand portfolio or
maintain and enhance our brand recognition, our business, results of operations and prospects may be harmed.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
mainly depend on our brand portfolio to scale our business, attract and retain our business customers. Our Luxventure portfolio, which
covers cross border merchandise and tourism products, seamlessly connected various brands from our suppliers. Although we have devoted
significant resources to and incurred large amount of expenses on sourcing, maintaining, promoting and expanding our brands, we cannot
assure you that these efforts will be successful. In addition, maintaining and enhancing the recognition of our brands are also key to
our success, which could be affected by various factors, including the effectiveness of our brand marketing strategy, publicity about
our business, quality of products offered under the brands as well as preference of consumers, certain of which are beyond our control.
Any failure to maintain and expand our brand portfolio or maintain and enhance our brand recognition could have a material and adverse
effect on our business, results of operations and prospects.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Negative
publicity about our brands, our business model or our products may materially and adversely affect our reputation, our business and the
trading price of our shares, regardless of its accuracy. We may also be adversely affected by negative publicity concerning us and our
business, shareholders, affiliates, directors, officers, employees, agents, other business partners and the industry in which we operate,
regardless of its accuracy.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Regardless
of its accuracy, negative publicity about our business model or our products may arise and appear on the internet and other media from
time to time, and negative publicity of more serious natures may arise in the future.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, our business model may be alleged to be involved in misconducts, improper activities, rumors, scandals or illegal activities
from time to time related to a variety of matters, such as misleading advertising practice. These allegations, even if factually incorrect
or based on isolated events, would result in negative publicity of our business, and may further have an adverse effect on our brand
and reputation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
brands and brands of our suppliers may also be subject to negative publicity for various reasons, such as complaints about the quality
of the products, customer services or other public relation incidents of us, which may adversely affect our reputation, brand loyalty
and consequently affect the operation of our business. Any such negative publicity, regardless of its veracity, could result in the expenditure
of funds and management time and may have a material and adverse effect on our reputation, our business and the trading price of our
shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Moreover,
negative publicity concerning us and our business, shareholders, affiliates, directors, officers, employees, agents, other business partners
and the industry in which we operate can harm our brand and reputation, regardless of its accuracy. Negative publicity concerning these
parties could be related to a wide variety of matters, including, but are not limited to:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">alleged
                                            misconducts or other improper activities committed by our directors, officers, employees,
                                            agents and other business partners;</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                                      </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">false
                                            or malicious allegations or rumors about us or our directors, shareholders, affiliates, officers,
                                            employees and other business partners;</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                                                </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">complaints
                                            from our business customers about our products and services;</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                                                                                                                                                                                                                                </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">employment-related
                                            claims relating to employment discrimination, working hours violation, tax, wage or pension
                                            matters;</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                          </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">governmental
                                            and regulatory investigations, penalties or claims resulting from misconduct of our business
                                            partners,</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                   </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">or
                                            our failure to comply with applicable laws and regulations;</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                                                                                                                                                                                                                       </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">negative
                                            publicity and claims asserted against our brand partners, especially any product quality
                                            issues of our</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">brand
                                            partners&rsquo; products; and</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                                                                                                                                                                                            </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">negative
                                            publicity of the industry in which we operate, including, but not limited to, bankruptcy
                                            and cessation of business operations of any of our major competitors.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>If
we fail to anticipate and respond to changing business customer preferences and shifts in market trends in a timely manner, our business
and operating results could be harmed.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
success largely depends on our ability to consistently gauge business customers&rsquo; tastes and market trends, provide a balanced assortment
of merchandise and source brands that satisfies business customer demands in a timely manner. Our failure to anticipate, identify or
react appropriately and timely to changes in business customer preferences, tastes and market trends or economic conditions could lead
to, among other things, missed opportunities, excess inventory or inventory shortages, markdowns and write-offs, all of which could negatively
impact our profitability. In addition, failure to respond to changing business customer preferences and trends in brand could negatively
impact our brand image with our business customers and result in diminished brand loyalty, and thus harm the prospects of our business.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
product supply chain is essential to our business and is subject to risks associated with demands forecasting, timely supplying and warehousing,
as well as maintaining relationship with our suppliers.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
largely depend on our supply chain management capabilities to minimize our inventory risks, maintain our short turnaround time and improve
our operational efficiency. However, our demand forecast may not be accurate, which could result in inventory write-offs or inventory
shortages. Even if we are able to make accurate demand forecast, our product supply chain may not be able to meet our demand on a timely
basis due to unexpected reasons. In addition, warehouses that we operate may not have sufficient capacity to process orders efficiently.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
product supply chain is also largely dependent on our relationship with our product suppliers. We cannot assure you that our current
product suppliers will continue to sell products or provide services to us on commercially acceptable terms, or at all, after the current
term of the agreement expires. If our suppliers cease to transact with us on favorable payment terms or deliver production in a timely
manner as agreed under the contract terms, our operations may be materially and adversely affected.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Although
we believe our supply chain has capacity to support our current operation, we cannot guarantee our supply chain will be adequate to support
our expanded business in the future. Thus, if we fail to manage our supply chain in line with our business expansion, our business, prospects,
financial condition and results of operations may suffer.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>If
we fail to develop, upgrade and apply our technologies to support and expand our business, our business may be materially and adversely
affected.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
rely on our technology infrastructure and operating systems to carry out the key aspects of our business, including identifying market
trends in brands, selecting and partnering with quality brand partners, forecasting business customers&rsquo; demands, supporting our
product supply chain, enabling effective marketing and distribution, and refining business customer services. Although we did not experience
any material failure or breakdown of our operating systems in the past, we cannot guarantee that such risks are always under control.
In addition, computer viruses, security breaches and information theft may lead to delays or errors in transaction processing, inability
to fulfill purchase orders or loss of data. Any interruptions of our operating platform, whether caused by computer viruses, hacking
or other security breaches, and errors encountered during platform upgrades or other issues resulting in the unavailability, or slowdown
of our information technologies may, individually or collectively, materially and adversely affect our business and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Cross-border&nbsp;merchandise
and tourism business are subject to rapid technological changes and innovations. Our technologies may become obsolete or insufficient.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
nature of our business is subject to rapid technological changes, and we may have difficulties in following and adapting to technological
changes in the industry in a timely and cost-effective manner, which could impact every key aspect of our business. New technologies
developed and introduced by our competitors could render our products and services less attractive or obsolete, thus materially affecting
our business and prospects. In addition, our substantial investments in technology may not produce expected results. If we fail to continue
to develop, innovate and utilize our technologies or if our competitors develop or apply more advanced technologies, our business, financial
condition and results of operations could be materially and adversely affected.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
conduct our business through online third party platforms operated by our business customers. The material disruption of those platforms
or any adverse changes on our cooperation with them could harm our business and operation.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
use third party platforms operated by our business customers to promote and sell our products. Our growth is subject to aforesaid third
party platforms&rsquo; traffic growth, account using terms and conditions and regulations, among other factors. If these platforms&rsquo;
traffic fails to grow in the future, our growth may slow down as well. If we breach the using terms of such platforms, the platform operators
may decide at any time to curtail or inhibit our ability to use such platforms. Meanwhile, these platforms may increase their fees or
make changes to their respective business models, using terms, policies or systems, and those changes could impair or restrict our ability
sell products. In addition, these platforms may be interrupted by regulatory restrictions, cease operations unexpectedly due to a number
of events, or even shut down due to their operating problems.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
of the above could affect our ability to maintain profitability or have a material adverse effect on our business, financial condition
or results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B><I>Order cancelation
as well as merchandise return and exchange policies may adversely affect our business and the results of operations.</I></B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We allow our business
customers to cancel orders within a fixed amount of time after the payment and to return products, subject to our return policy. Our order
cancelation rate and product return rate may fluctuate or even increase in the future due to various factors, many of which are beyond
our control. In addition, as we diversify our marketing efforts and expand to more sales channels, our order cancelation rate and product
return rate may further increase. Moreover, our products might be damaged during transit from time to time, especially during international
transportation, which increases the return rate and harms our brands as well. If the rate of order cancelation or product returns increases
significantly, our inventory turnovers and cash flow could be adversely affected, and thus harm our financial condition and operating
results.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Moreover,
we may be required by law to adopt new or amend existing return and exchange policies from time to time. In addition to regulatory requirements,
we may also modify our return policies from time to time, which may result in customers&rsquo; dissatisfaction or an increase in order
cancelation or product returns rates.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
rely on third-party product suppliers, manufacturers, logistics service providers and other vendors to serve our business customers.
If they fail to provide products or services that are consistent with our standards or applicable regulatory requirements, we may have
to find alternative vendors, and our reputation and operation could suffer.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
do not own or operate any manufacturing facilities. Instead, we rely on third-party manufacturers and third-party product suppliers to
supply all of the products offered on third party platform operated by our business customers. We enter into framework procurement contracts
with different third-party product suppliers and manufacturers. The capacities of our third-party product suppliers and manufacturers
are subject to orders placed by their other clients, which may include our competitors. If our demands increase significantly, or our
existing suppliers run out of their capacity, we may not be able to find additional or alternative suppliers in a timely manner. We also
cannot guarantee that we will have superior bargaining power over third-party product suppliers and manufacturers for our newly launched
products. In addition, quality control issues, such as the use of unqualified materials, may exist in certain third-party product suppliers
and could cause consumer dissatisfaction and as a result, harm our business.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
rely on third-party logistics service providers to deliver products to our customers. Any delay, damages, loss and inappropriate actions
taken by logistics service providers might cause customer complaints. Although we may claim compensation from third-party logistics service
providers in some cases, our business, financial condition and results of operations could suffer as well.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
procure inventory based on our forecast on business customer demands, and if we are unable to manage our inventory effectively, our operating
results could be adversely affected.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
scale and business model requires us to manage a large volume of inventory effectively. Our forecast on demands may significantly differ
from actual demands. Demands may be affected by seasonality, new product launches, rapid changes in product cycles and pricing, product
defects, promotions, changes in business consumer spending patterns, changes in business consumer tastes with respect to our products
and other factors, and our business consumers may not purchase products in the quantities that we expect. We may not be able to return
unsold products to our suppliers unless the products are defective or otherwise agreed with our suppliers.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">On the other hand, if
we underestimate demand and thus run short of inventory, our growth may be adversely affected due to lower sales volume and unsatisfied
shopping experiences.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Furthermore,
if we fail to negotiate favorable credit terms with third-party suppliers and manufacturers, we may be subject to a heightened risk of
inventory obsolescence, a decline in inventory values, and significant inventory write- downs or write-offs. In case that we are required
to lower sale prices in order to reduce inventory level or to pay higher prices to our suppliers, our profit margins might be negatively
affected. Any of the above may materially and adversely affect our business, financial condition and operating results.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B><I>If we fail to obtain
requisite approvals or licenses or fail to comply with other regulatory requirements applicable to our operations, we may be subject to
administrative penalties and our business and operating results could be adversely affected. </I></B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
business is subject to general business regulations governing&nbsp;cross-borders and tourism&nbsp;industries. We are also subject to
supervision and regulation by the State Administration for Market Regulation of the PRC and other relevant PRC government authorities
and/or their relevant local counterparts. While we currently hold all material licenses and permits required for our operations, we may
be required to renew these licenses and permits upon their expiration or obtain new licenses or permits in the future as a result of
our business expansion, changes of our operations, changes in laws and regulations applicable to us, or changes of interpretation from
relevant authorities on such laws and regulations.&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="background-color: white">After consulting our PRC legal
counsel, Beijing Dacheng Law Offices LLP (Haikou), we believe we and our PRC subsidiaries have obtained all necessary licenses and approvals
required for our operations in China, including business licenses and VAT licenses for internet data center services, internet access
services, domestic internet protocol virtual private network services, content delivery network services and information services.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">However,
any failure, or perceived failure, by us to comply with any of these requirements could result in damage to our reputation, a loss in
business, and proceedings or actions against us which could be costly and disrupt our overall operations. We may also be contractually
liable to indemnify and hold harmless third parties from the costs or consequences of noncompliance with any such laws or regulations.
Any of these events may have a material and adverse effect on our business, financial condition and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
results of operations may fluctuate due to the seasonality of our business and other events, which could cause our stock price to decline.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have experienced, and expect to continuously experience, seasonal fluctuations in our results of operations, due to seasonal changes
in sales volume, as well as seasonality in our advertising services.<B><I>&nbsp;</I></B>In addition, the business hours of our logistics
and fulfillment service will be impacted by the holidays. Moreover, our results of operations may fluctuate due to changes in production
cycle and launch of new styles or events.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
product suppliers, manufacturers, independent contractors or commercial partners may engage in misconduct or other improper activities,
including unfair competition and noncompliance with laws and regulations, which may adversely affect our business and results of operations.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are exposed to the risk that our product suppliers, manufacturers, independent contractors or commercial partners may engage in misconduct.
Misconduct by these parties could include intentional, reckless or negligent conduct or improper sales, marketing and business arrangements,
in particular, arrangements that may constitute unfair competition. It is not always possible for us to identify and deter misconduct
by our product suppliers, independent contractors or commercial partners, and the precautions we take to detect and prevent this activity
may not be effective in controlling unknown, unmanaged risks and losses, or in protecting us from negative publicity, governmental investigations,
actions or lawsuits stemming from such misconducts. No matter whether we can succeed in dealing with negative publicity or defending
against investigations or actions, we could incur substantial costs and divert the attention of management, which could adversely affect
our ability to operate our business and our results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>If
we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards, changing regulations, and changing
customer needs, requirements or preferences, our products and solutions may become less competitive.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe that our technology solution provides solutions for cross-border operations management and is innovative and reliable tool for
businesses engaged in international commerce. However, we face uncertainties over the size and rate at which this market will grow, as
well as whether our solutions and products will be widely adopted. Moreover, the technology solution industry is subject to rapid technological
change, evolving industry standards, changing regulations, as well as changing customer needs, requirements and preferences. The success
of our business will depend, in part, on our ability to adapt and respond effectively to these changes on a timely basis. If we are unable
to develop new solutions and products that satisfy our existing customers and provide enhancements and new features for our existing
products that keep pace with rapid technological and industry change, our business, results of operations and financial condition could
be adversely affected. If new technologies emerge that are able to deliver competitive products and services at lower prices, more efficiently,
more conveniently or more securely, such technologies could adversely impact our ability to compete effectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
platform must also integrate with a variety of network, hardware, software platforms and technologies, and we need to continuously modify
and enhance our products and platform to adapt to changes and innovation. For example, if customers adopt new software platforms or infrastructure,
we may be required to develop new versions of our products to be compatible with those new software platforms or infrastructure. This
development effort may require significant resources, which would adversely affect our business, results of operations and financial
condition. In addition, we may not be able to keep track of the latest market developments in the IT industry and to provide relevant
new products and solutions to the evolving market demand. Any failure of our products and platform to operate effectively with evolving
or new software platforms and technologies could reduce the demand for our products. If we are unable to respond to these changes in
a cost- effective manner, our products may become less marketable and less competitive or obsolete, and our business, results of operations
and financial condition could be adversely affected.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Data
loss, security incidents and other attacks on our platform, products or solutions, or our global network infrastructure could lead to
significant costs and disruptions that could harm our business, financial results, and reputation.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
technology solution model is dependent on providing our customers with secure, reliable and high-quality services. Maintaining the security
and availability of our infrastructure, systems, platform, network, and the security of information and data we hold is a critical issue
for us and our customers. Attacks on our customers and our own network may be frequent and may happen in a variety of forms, including
infrastructure attacks, botnets, malicious file attacks, cross-site scripting, credential abuse, ransomware, viruses, worms, and malicious
software programs. Malicious actors can attempt to fraudulently induce employees or suppliers to disclose sensitive information through
spamming, phishing, or other tactics. In addition, unauthorized parties may attempt to gain physical access to our facilities in order
to infiltrate our information systems. Since our customers share our multi-tenant architecture, material attacks on any one of our customers
could have a negative effect on other customers. These attacks may also significantly increase the bandwidth used on our platform and
strain our network. If attacks like these were to occur in the future and if we do not have the systems and processes in place to respond
to them, our business could be harmed.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
recent&nbsp;years, cyber-attacks have increased in size, sophistication, and complexity, increasing exposure for our customers and us.
We may become an attractive target for attacks on our infrastructure intended to destabilize, overwhelm, or shut down our platform. The
costs incurred by us to avoid or alleviate cyber or other security problems and vulnerabilities will be significant. However, our efforts
to address these problems and vulnerabilities may not be successful. Any significant breach of our security measures could:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">lead
                                            to the dissemination of proprietary information or sensitive, personal, or confidential data
                                            about us, our employees, or our customers&mdash;including personally identifiable information
                                            of individuals involved with our customers and their end-users;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">lead
                                            to interruptions or degradation of performance in our platform, products and solutions;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">threaten
                                            our ability to provide our customers with access to our platform, products and solutions,
                                            and negatively affect our abilities to retain existing customers;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">generate
                                            negative publicity about us;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">result
                                            in litigation and increased legal liability or fines; or</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">lead
                                            to governmental inquiry or oversight.</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
occurrence of any of these events could harm our business or damage our brand and reputation, lead to customer credits, loss of customers,
higher expenses, and possibly impede our present and future success in retaining and attracting new customers. Security incidents or
attacks on our infrastructure would be damaging to our reputation and could harm our business.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
use of licensed third-party or open-source software could negatively affect our ability to provide consistent online experiences.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
use software licensed from third parties. Any interruptions that result from the unavailability of the software licensed from third parties
may affect the quality of our services. We may also encounter problems when software licensed from third parties is upgraded, and undetected
programming errors could adversely affect the performance of the software we use to provide our services.&nbsp; Although we have implemented
policies to regulate the use and incorporation of open-source software into our products and platform, we cannot be certain that we have
not incorporated open source software in our products or platform in a manner that is inconsistent with such policies. If we or our employees
fail to comply with open source licenses, we may be subject to certain requirements, including requirements that we offer our products
that incorporate the open source software for no cost, that we make available source code for modifications or derivative works we create
based upon, incorporating or using the open source software and that we license such modifications or derivative works under the terms
of applicable open source licenses. If an author or other third party that distributes such open source software were to allege that
we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal expenses defending
against such allegations and could be subject to significant damages, enjoined from generating revenues from customers using products
that contained the open source software and required to comply with onerous conditions or restrictions on these products. In addition,
we use open-source software in the applications we have developed to operate our business and will use open source software in the future.
We could be required to seek licenses from third parties in order to continue using the open source software we are permitted to use
currently, in which case licenses may not be available on terms that are acceptable to us, or at all. Our inability to use third-party
software could result in disruptions to our business, or delays in the development of future offerings or difficulties in enhancing our
operating platforms, which could materially and adversely affect our business and results of operations.&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Moreover,
we use third-party technology and systems in a variety of technical and operational aspects of our business, including encryption and
authentication technology, employee email, content delivery to customers, back-office support, among others. Similar security risks exist
with respect to such third-parties. As a result, we are subject to the risk that cyber-attacks on our business partners and third-party
suppliers may adversely affect our business even if an attack or breach does not directly impact our systems. It is also possible that
security breaches sustained by our competitors could result in negative publicity for our entire industry that indirectly harms our reputation
and diminishes demand for our platform.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Changes
in laws and regulations related to the internet or changes in the internet infrastructure itself may diminish the demand for our products
and solutions, and could adversely affect our business, results of operations and financial condition.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
future success of our business depends upon the continued use of the internet as a primary medium for commerce, communications and business
applications. Chinese or foreign government bodies or agencies have in the past adopted, and may in the future adopt, laws or regulations
affecting the use of the internet as a commercial medium. Changes in these laws or regulations could require us to modify our products
and platform in order to comply with these changes. In addition, government agencies or private organizations have imposed and may impose
additional taxes, fees or other charges for accessing the internet or commerce conducted via the internet. These laws or charges could
limit the growth of internet-related commerce or communications generally, or result in reductions in the demand for internet-based products
and services such as our products and platform. In addition, the use of the internet as a business tool could be adversely affected due
to delays in the development or adoption of new standards and protocols to handle increased demands of internet activity, security, reliability,
cost, ease-of-use, accessibility and quality of service. The performance of the internet and its acceptance as a business tool has been
adversely affected by &ldquo;viruses,&rdquo; &ldquo;worms,&rdquo; and similar malicious programs. If the use of the internet is reduced
as a result of these or other issues, then demand for our products could decline, which could adversely affect our business, results
of operations and financial condition.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Moreover,
our business depends on the performance, reliability and security of the telecommunications and internet infrastructure in China and
other countries in which we operate or locate our assets. Substantially all access to the internet in China is maintained through certain
telecommunication operators under the administrative control and regulatory supervision of the Ministry of Industry and Information Technology,
or the MIIT. In addition, the national networks in China are connected to the internet through qualified international gateways, which
are the only channels through which a domestic user can connect to the internet outside of China. We may face similar or other limitations
in other countries in which we operate or locate our assets. We may not have access to alternative networks in the event of disruptions,
failures or other problems with the internet infrastructure in China or elsewhere. In addition, the internet infrastructure in the countries
in which we operate may not support the demands associated with continued growth in Internet usage. We also have no control over the
costs of the services provided by the telecommunications operators. If the prices that we pay for telecommunications and internet services
rise significantly, our margins could be adversely affected.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>Other
Risks Related to Our Business</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>If
we cannot successfully protect our intellectual property and exclusive rights, our brand and business would suffer.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
rely on a combination of trademark, patent, copyright, domain name and trade secret protection laws in China and other jurisdictions,
as well as confidentiality procedures and contractual provisions, to protect our intellectual property rights and other exclusive rights.
We also enter into agreements containing confidentiality obligations with our employees and any third parties who may access our proprietary
technology and information, and we rigorously control access to our proprietary technology and information.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Nevertheless,
we cannot guarantee that we can successfully protect our intellectual property and exclusive rights from unauthorized usage by third
parties or breach of confidentiality obligations by our counterparties. Furthermore, a third party may take advantage of the &ldquo;first-to-file&rdquo;&nbsp;trademark
registration system in China to register our brands in bad faith, which will cause us to incur additional costs for legal actions. Moreover,
confidentiality obligations may be breached by counterparties, and there may not be adequate remedies available to us for any such breach.
Accordingly, we may not be able to effectively protect our intellectual property rights and exclusive rights or to enforce our contractual
rights in China or elsewhere.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, policing any unauthorized use of our intellectual property and exclusive rights is difficult, time-consuming and costly. The
precautionary steps we have taken for protecting our rights may be inadequate. In the event that we resort to litigation to enforce our
intellectual property rights and exclusive rights, such litigation could result in substantial costs and a diversion of our managerial
and financial resources. We can provide no assurance that we will prevail in such litigation or that we would be able to halt any unauthorized
use of our intellectual property and exclusive rights. In addition, our trade secrets may be leaked to, or be independently discovered
by, our competitors. Any failure in protecting or enforcing our intellectual property rights could have a material adverse effect on
our business, financial condition and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Pandemics
and epidemics, natural disasters, terrorist activities, political unrest, and other outbreaks could disrupt our delivery and operations,
which could materially and adversely affect our business, financial condition, and results of operations.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Global
pandemics, epidemics in China or elsewhere in the world, other widespread health epidemics or fear of spread of contagious diseases,
such as Ebola virus disease (EVD), coronavirus disease 2019 (COVID-19), Middle East respiratory syndrome (MERS), severe acute respiratory
syndrome (SARS), H1N1 flu, H7N9 flu, and avian flu, as well as hurricanes, earthquakes, tsunamis, or other natural disasters could disrupt
our business operations, reduce or restrict our supply of products and services, incur significant costs to protect our employees and
facilities, or result in regional or global economic distress, which may materially and adversely affect our business, financial condition,
and results of operations. Actual or threatened war, terrorist activities, political unrest, civil strife, and other geopolitical uncertainty
could have a similar adverse effect on our business, financial condition, and results of operations. Any one or more of these events
may impede our production and delivery efforts and adversely affect our sales results, or even for a prolonged period of time, which
could materially and adversely affect our business, financial condition, and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The recent COVID-19 pandemic adversely
affected many businesses in China, including the Company&rsquo;s business. As China implemented nationwide efforts to contain the
spread of the novel coronavirus, particularly. during 2021 and 2022, when the most severe additional lockdowns were implemented,
including lockdowns in Hainan Island. These lockdowns had a significant impact on our operations, particularly on Hainan Island,
where we are based. As a result of the lockdown on Hainan Island, Chinese customs were closed, preventing the sanitization and
inspection of imported products for potential COVID-19 contamination. This effectively halted our cross-border operations. The
global spread of COVID-19 also affected our sales. This growth in revenue, especially revenues from our tourism business, has been
adversely impacted by COVID-19 pandemic at various times during 2021 because of government-enforced lockdowns.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
business is also vulnerable to natural disasters, such as snowstorms, earthquakes, fires or floods, and other calamities, such as wars,
acts of terrorism, environmental accidents, power shortages or communication interruptions. The occurrence of such a disaster or a prolonged
outbreak of an epidemic illness or other adverse public health developments in China or elsewhere in the world could materially disrupt
our business and operations. We cannot assure you that we are adequately protected from the effects of fire, floods, typhoons, earthquakes,
power loss, telecommunications failures, break-ins, war, riots, terrorist attacks, or similar events. Any of the foregoing events may
give rise to interruptions, damage to our property, delays in production, breakdowns, system failures, or internet failures, which could
adversely affect our business, financial condition, and results of operations. Our operations could be disrupted if any of our employees
or employees of our business partners were suspected of having any contagious disease, since this could require us or our business partners
to quarantine some or all of such employees or disinfect the facilities used for our operations. Our operations could also be severely
disrupted if our buyers, sellers or other participants were affected by such natural disasters, health epidemics or other outbreaks.
In addition, our revenues and profitability could be materially reduced to the extent that a natural disaster, health epidemic or other
outbreak harms the global or PRC economy in general and our industry as a whole.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
may be accused of infringing intellectual property or proprietary rights of third parties.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
cannot assure you that our content, product design, our offerings or our technologies do not or will not infringe upon copyrights or
other intellectual property rights (including, but not limited to, trademarks, patents and&nbsp;know-how)&nbsp;held by third parties.
Nor can we assure you that our use of software or any other intellectual properties in business and operation will not be alleged by
any third party as infringement resulting from lack of licenses. If any third-party infringement claims are brought against us, we may
be forced to divert management&rsquo;s time and other resources from our business and operations to defend against these claims. We may
also be prohibited from using such intellectual property or relevant content. As a result, we may incur licensing or usage fees, develop
alternatives of our own, or even need to pay damages, legal fees and other costs. Even if such assertions against us are unsuccessful,
they may cause us to lose existing and future business and incur reputational harm and substantial legal fees. As a result, our reputation
may be harmed and our business and financial performance may be materially and adversely affected.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;We
have adopted policies and procedures to prohibit our members, employees and business partners from infringing upon third-party copyright
or other intellectual property rights.<B><I>&nbsp;</I></B>However, we cannot assure you that they will not, against our policies, use
third-party copyrighted materials or intellectual property without proper authorization, and therefore result in disputes. In addition,
we may incur liability for unauthorized duplication or distribution of materials used in our online store and during our services. Although
we have set up rules and procedures to enable copyright owners to provide us with notice of alleged infringement, given the volume of
content we offer, we may not be able to identify and remove all potentially infringing content that may exist, and thus we may encounter
intellectual property claims against us.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>The
success of our business depends on the continuing efforts of our senior management and other key personnel. If we fail to retain, attract
and train such personnel, our business may be materially and adversely affected.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
success of our business depends significantly on our senior management. In particular, we rely on the expertise, experience and vision
of Ms. Sun Lei, our Chief Executive Officer, Interim Chief Financial Officer, co-Chairwoman and director. If she becomes unable or unwilling
to continue to contribute her services to us, we may not be able to replace them easily, or at all. As a result, our business may be
severely disrupted, and our financial condition and results of operations may be materially and adversely affected.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Additionally,
our future success also depends on our ability to attract, recruit and train a large number of qualified employees and retain existing
key employees. Competition for discovering and signing talents in cross-border merchandise and tourism industries in China is intense,
and the availability of suitable and qualified candidates in China is limited. In order to compete for talents, we may need to offer
higher compensation, better trainings, more attractive career opportunities and other benefits to our employees, which may be costly
and burdensome. There can be no assurance that we will be able to retain a qualified workforce necessary to support our future growth.
Furthermore, our ability to train and integrate new employees into our operations may not meet the demands of our growing business. Any
of the above issues related to our workforce may materially and adversely affect our operations and future growth.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
may be subject to claims, disputes, litigation, allegations, complaints and investigations and other legal and administrative proceedings
from time to time arising out of our operations, some of which may be caused by activities of our customers or the content of their websites
and other internet properties, and our reputation and operations may be adversely affected.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have not been subject to any material allegations or complaints in the past, but we may be involved in legal and other disputes in the
ordinary courses of our business. We and our management may be subject to claims, disputes, lawsuits, investigations and other legal
and administrative proceedings incidental to the conduct of our business from time to time. We have not been subject to and are currently
not party to any legal or arbitration proceedings, including those relating to bankruptcy, receivership or similar proceedings and those
involving any third party, which may have, or have had in the recent past, material adverse effects on our financial position or profitability.
Any claims against us or our management, with or without merit, could be time-consuming and costly to defend or litigate, divert our
management&rsquo;s attention and resources or harm our brand equity.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Through
our network, we provide a wide variety of products that enable our customers to exchange information, conduct business, and engage in
various online activities both domestically and internationally. Our customers may use our platform and products in violation of applicable
law or in violation of our terms of service or the customer&rsquo;s own policies. The existing laws relating to the liability of providers
of online products and services for activities of their users are highly unsettled and in flux both within China and internationally.
We may be subject to lawsuits and/or liability arising from the conduct of our customers from time to time. Additionally, the conduct
of our customers may subject us to regulatory enforcement actions and/or liability. We may be a defendant in a number of lawsuits both
in China and abroad, alleging copyright infringement based on content that is made available through our customers&rsquo; websites. There
can be no assurance that we will not face litigation or regulatory enforcement actions in the future or that we will prevail in any litigation
we may face. An adverse decision in one or more of these lawsuits or enforcement action could materially and adversely affect our business,
results of operations, and financial condition.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Claims
arising out of actual or alleged violations of law, breach of contract or torts could be asserted against us by customers, business partners,
suppliers, competitors, employees or governmental entities in investigations and legal proceedings. These claims could be asserted under
a variety of laws, including but not limited to the intellectual property laws, labor and employment laws, securities laws, tort laws,
contract laws, property laws, and employee benefit laws. If a lawsuit or governmental proceeding against us is successful, we may be
required to pay substantial damages or fines. We might also be involved in governmental investigations of our business operation in the
future. Any claims against us, with or without merit, could be time-consuming and costly to defend or litigate, divert our management&rsquo;s
attention and resources or harm our brand equity. If a lawsuit or governmental proceeding against us is successful, we may be required
to pay substantial damages or fines. We may also lose, or be limited in, the rights to offer some of our content, products and services
or be required to make changes to our content offerings or business model. As a result, the scope of our content, product and service
offerings could be reduced, which could adversely affect our ability to attract new business customers, harm our reputation and have
a material adverse effect on our business, financial condition and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Imposition
of trade barriers and taxes may reduce our ability to do business internationally, and the resulting loss of revenue could harm our profitability.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may experience barriers to conducting business in the form of delayed customs clearances, customs duties and tariffs. In addition, we
may be subject to repatriation taxes levied upon the exchange of income from local currency into foreign currency, substantial taxes
on profits, revenues, assets and payroll, as well as value-added tax. The markets in which we plan to operate may impose onerous and
unpredictable duties, tariffs and taxes on our business and products, and there can be no assurance that this will not reduce the level
of sales that we achieve in such markets, which would reduce our revenues and profits.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
may expand our business through acquisitions, investments or strategic alliances in the future, but we might not be able to successfully
pursue synergy from acquisitions or to achieve the benefits we expect from recent and future investments, strategic alliances and acquisitions.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may form strategic alliances or make strategic investments and acquisitions from time to time to complement and enhance our existing
business. We may experience difficulties in integrating our operations with the newly invested or acquired businesses, implementing our
strategies or achieving expected levels of revenues, profitability, productivity or other benefits. Moreover, if the businesses we acquire
or invest in or our strategic alliances or partnerships do not subsequently generate the anticipated financial performance or if any
goodwill impairment test triggering event occurs, we may need to revalue or write down the value of goodwill and other intangible assets
in connection with such transactions, which would harm our business, financial condition and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, we may not be able to identify appropriate strategic investment or alliance targets when it is necessary or desirable to make
such acquisition or investment to remain competitive or to expand our business. Even if we identify an appropriate target, we may not
be able to negotiate the terms of the transaction successfully. In the event that we do not have control over the companies in which
we only have minority stake, we cannot ensure that these companies will at all times comply with applicable laws and regulations in their
business operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>The expansion of our business may place significant strain on our personnel,
management, financial systems and operational infrastructure and may impede our ability to meet any increased demand for our products.
&nbsp;<B><I>Any failure by us or our business partners to comply with product safety, labor, tax or other laws, or to provide safe conditions
for our or their workers may damage our reputation and brand and harm our business.</I></B></I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
products are subject to regulation by various governmental authorities in China. Such products could be in the future subject to potential
recalls and other remedial actions. Product safety, labeling and licensing concerns, including consumer disclosure and warning regarding
chemical exposure, may result in recall or suspended offering of products, which in turn could result in a material adverse effect on
our operating results.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
accommodate the Company&rsquo;s growth, we will need to implement a variety of new and upgraded operational and financial systems, procedures,
and controls, including improvements to our accounting and other internal management systems, by dedicating additional resources to our
reporting and accounting function and improvements to our record keeping and contract tracking system. We will also need to recruit more
personnel and train and manage our growing employee base. Furthermore, we will need to maintain and expand relationships with our current
and future customers, suppliers, distributors and other third parties, and there is no guarantee that we will succeed.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
procure products from a variety of third-party suppliers, manufacturers and other business partners. If they fail to comply with applicable
laws and regulations, we may also face or get involved in litigations, which could increase our legal costs. In addition, other misconduct
of our business partners such as failure to provide safe and humane working conditions could harm our reputation and business as well.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>The
estimates of market opportunity and forecasts of market growth in this Annual Report may prove to be inaccurate. Even if the market in
which we compete achieves the forecasted growth, our business could fail to grow at similar rates, if at all.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Market
opportunity estimates and growth forecasts, including those we have generated ourselves, are subject to significant uncertainty and are
based on assumptions and estimates that may not prove to be accurate. The variables that go into the calculation of our addressable market
size are subject to change over time, and there is no assurance that any target business customers covered by our market opportunity
estimates will purchase our products at all or generate any particular level of revenue for us. Any expansion in our market depends on
a number of factors, including the cost, performance, competition and perceived value associated with our products and services. Even
if the market in which we compete meets the size estimates and growth forecasted, our business could fail to grow at similar rates, if
at all, due to various factors, including failure to execute our growth plan, ineffective management over operations and adverse impact
from negative publicity. Accordingly, the forecasts of market growth should not be taken as indicators of our future growth.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
may be unable to establish and maintain an effective system of internal control over financial reporting, and, as a result, we may be
unable to accurately report our financial results or prevent fraud. </I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are subject to reporting obligations under the U.S. securities law. The SEC as required by Section 404 of the Sarbanes-Oxley Act of 2002
(&ldquo;SOX 404&rdquo;), adopted rules requiring every public company to include a management report on such company&rsquo;s internal
control over financial reporting in its annual report, which must also contain management&rsquo;s assessment of the effectiveness of
the company&rsquo;s internal control over financial reporting. In addition, the independent registered public accounting firm auditing
the financial statements of a company that is not a non-accelerated filer, emerging growth company or smaller reporting company under
Rule 12b-2 of the Exchange Act must also attest to the operating effectiveness of the company&rsquo;s internal controls.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Failure
to achieve and maintain an effective internal control environment could result in our inability to accurately report our financial results,
prevent or detect fraud or provide timely and reliable financial and other information pursuant to the reporting obligations we have
as a public company, which could have a material adverse effect on our business, financial condition and results of operations. Further,
it could cause our investors to lose confidence in the information we report, which could adversely affect our stock price.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
may incur liabilities that are not covered by insurance.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">While
we seek to maintain appropriate levels of insurance, not all claims are insurable and we may experience major incidents of a nature that
are not covered by insurance. We provide social security insurance including pension, medical insurance, unemployment insurance, maternity
insurance, on-the-job injury insurance and housing fund plans through a PRC government-mandated benefit contribution plan for our employees.
We do not carry any key-man life insurance, product liability, Directors and Officers Insurance and professional liability insurance.
Even if we purchase these kinds of insurance, the insurance may not fully protect us from the financial impact of defending against product
liability or professional liability claims. We have not purchased any property insurance or business interruption insurance. We have
determined that the costs of insuring for related risks and the difficulties associated with acquiring such insurance on commercially
reasonable terms make it impractical. We consider our insurance coverage to be sufficient for our business operations in China. We maintain
an amount of insurance protection that we believe is adequate, but there can be no assurance that such insurance will continue to be
available on acceptable terms or that our insurance coverage will be sufficient or effective under all circumstances and against all
liabilities to which we may be subject. If we were to incur substantial losses or liabilities due to fire, explosions, floods, other
natural disasters or accidents or business interruption, our results of operations could be materially and adversely affected. We could,
for example, be subject to substantial claims for damages upon the occurrence of several events within one calendar year. In addition,
our insurance costs may increase over time in response to any negative development in our claims history or due to material price increases
in the insurance market in general.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Leakage
or misappropriation of know-how, confidential information and trade secrets from unauthorized copying, use or disclosure could have an
adverse impact on our reputation and operations.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the course of providing our services, we may have access to and be entrusted with information that is confidential in nature, such as
information that relates to our customers&rsquo; systems, operations, raw data or affairs. While we have adopted measures to protect
the confidentiality of our customers&rsquo; information, including our internal control manual and the nondisclosure arrangements with
our employees, there is no assurance that the steps taken by us will successfully prevent any leakage or misappropriation of confidential
information of our customers. Any leakage or misappropriation of confidential information of our customers could expose us to complaints
or claims, which may materially and adversely affect our reputation and business operations. In addition, we seek to protect our know-how,
confidential information and trade secrets, in part, by entering into non-disclosure and confidentiality agreements or other means to
such effect, with parties who have access to them, such as our employees. Despite these efforts, any of these parties may breach such
agreements, intentionally or unintentionally and disclose our proprietary information and we may not be aware of or able to obtain adequate
remedies for such breaches. The unauthorized disclosure and/or misappropriation of trade secrets is difficult to detect and/or to prove.
As such, it is difficult, expensive and time-consuming to establish trade secret misappropriation claims, with no guarantee of success
or adequate remedies. Such disclosures could also lead to a loss of trade secret protection, which could materially and adversely affect
our business, competitive position, financial conditions and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>RISKS
RELATED TO DOING BUSINESS IN CHINA </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Because we conduct substantially all of
our business operations in China, our business is subject to the complex and rapidly evolving laws and regulations there. Chinese government
may exercise significant oversight and discretion over the conduct of our business and may intervene in or influence our operations at
any time, which could result in a material change in our operations and/or the value of our common stock, could significantly limit or
completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly
decline or be worthless.</I></B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As a company that conducts substantially of its business operations
in China, we are subject to the laws and regulations of the PRC, which can be complex and evolve rapidly, and to <FONT STYLE="background-color: white">risks
associated with complying with these laws and regulations</FONT>. The PRC government has the power to exercise significant oversight and
discretion over the conduct of our business, and the regulations to which we are subject may change rapidly and with little notice to
us or our shareholders. As a result, the application, interpretation, and enforcement of new and existing laws and regulations in the
PRC are often uncertain. In addition, these laws and regulations may be interpreted and applied inconsistently by different agencies or
authorities, and inconsistently with our current policies and practices. New laws, regulations, and other government directives in the
PRC may also be costly to comply with, and such compliance or any associated inquiries or investigations or any other government actions
may:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Delay
                                            or impede our development,</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                                                                                                                                                                                         </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Result
                                            in negative publicity or increase our operating costs,</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                                                                                                                                                                                                                      </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Require
                                            significant management time and attention, and</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                                                                                                                                                                                                               </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
                                            us to remedies, administrative penalties and even criminal liabilities that may harm our
                                            business, including fines assessed for our current or historical operations, or demands or
                                            orders that we modify or even cease our business practices.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
promulgation of new laws or regulations, or the new interpretation of existing laws and regulations, in each case that restrict or otherwise
unfavorably impact the ability or manner in which we conduct our business and could require us to change certain aspects of our business
to ensure compliance, which could decrease demand for our products, reduce revenues, increase costs, require us to obtain more licenses,
permits, approvals or certificates, or subject us to additional liabilities. To the extent any new or more stringent measures are required
to be implemented, our business, financial condition and results of operations could be adversely affected, and any such action could
significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such
securities to significantly decline or be worthless.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Risks
related to a future determination that the Public Company Accounting Oversight Board (the &ldquo;PCAOB&rdquo;) is unable to inspect or
investigate our auditor completely. </I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">The
recent joint statement by the SEC and the Public Company Accounting Oversight Board (the &ldquo;PCAOB&rdquo;), rule changes by Nasdaq,
and the Holding Foreign Companies Accountable Act and related regulations, all call for additional and more stringent criteria to be
applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not
inspected by the PCAOB. These developments could add uncertainties to our continued listing on Nasdaq Capital Market or future offerings
of our securities in the U.S. and could result in a material adverse change in our operations and the value of our Common Stock, significantly
limit or completely hinder our ability to offer or continue to offer securities to investors and cause such securities to significantly
decline in value or become worthless<B>. </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">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.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 18, 2020, Nasdaq filed three proposals with the SEC to (i) apply a minimum offering size requirement for companies primarily operating
in a &ldquo;Restrictive Market,&rdquo; (ii) adopt a new requirement relating to the qualification of management or the board of directors
for Restrictive Market companies, and (iii) apply additional and more stringent criteria to an applicant or listed company based on the
qualifications of the company&rsquo;s auditor. On October 4, 2021, the SEC approved Nasdaq&rsquo;s revised proposal for the rule changes.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 20, 2020, the U.S. Senate passed the Holding Foreign Companies Accountable Act (&ldquo;HFCAA&rdquo;), and on December 18, 2020, the
HFCAA was signed into law. On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure
and documentation requirements of the HFCAA. The HFCAA, among other things, directs the SEC to prohibit trading on U.S. stock exchanges
and in the U.S. over-the-counter markets the securities of foreign-based companies if their financial statements are audited by accounting
firms that the PCAOB determines it has been unable to inspect or investigate completely for a period of two consecutive audit years (&ldquo;Non-Inspection
Years&rdquo;), because of a position taken by the authorities in a foreign jurisdiction in which the accounting firms are based (each
accounting firm so determined by the PCAOB, a &ldquo;PCAOB-Identified Firm&rdquo;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
September 22, 2021, the PCAOB adopted a final rule implementing the HFCAA, which provides a framework for the PCAOB to use when determining,
as contemplated under the HFCAA, whether the board of directors of a company is unable to inspect or investigate completely registered
public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 2, 2021, the SEC adopted amendments to finalize rules implementing the submission and disclosure requirements in the HFCAA.
Pursuant to the HFCAA, the PCOAB issued a Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or
investigate completely registered public accounting firms headquartered in: (1) mainland China of the People&rsquo;s Republic of China,
because a position taken by one or more authorities in mainland China; and (2) Hong Kong, a Special Administrative Region and dependency
of the PRC, because of a position taken by one or more authorities in Hong Kong. In addition the PCOAB&rsquo;s report identified the
specific registered public accounting firms which are subject to these determinations. Our registered public accounting firm, Onestop
Assurance PAC (&ldquo;Onestop&rdquo;) is&nbsp;a Singapore-based independent public accounting firm; it is <U>not</U>&nbsp;headquartered
in mainland China or Hong Kong and was&nbsp;<U>not</U>&nbsp;identified in this report as a firm subject to the PCAOB&rsquo;s determination.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 26, 2022, the CSRC, MOF, and the PCAOB signed the Protocol, governing inspections and investigations of audit firms based in China
and Hong Kong, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms
headquartered in mainland China and Hong Kong. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB
shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer
information to the SEC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 15, 2022, the PCAOB determined that it was able to secure complete access to inspect and investigate registered public accounting
firms headquartered in mainland China and Hong Kong and vacated its previous determinations to the contrary. However, should PRC authorities
obstruct or otherwise fail to facilitate the PCAOB&rsquo;s access in the future, the PCAOB may consider the need to issue a new determination.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act (the &ldquo;AHFCAA&rdquo;), and on December
29, 2022, the Consolidated Appropriations Act 2023 was signed into law, which contained, among other things, an identical provision to
the AHFCAA, which reduces the number of consecutive non- inspection years required for triggering the prohibitions under the HFCAA from
three years to two.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
auditor, Onestop, is a Singapore-based independent public accounting firm that is registered with the PCAOB and can be inspected by the
PCAOB, and is subject to laws pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional
standards. The PCAOB currently has access to inspect the working papers of our auditor. We have no intention of dismissing Onestop in
the future or of engaging any auditor not subject to regular inspection by the PCAOB. 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 since we are an emerging growth company and substantial all of our operations are conducting in China. Furthermore, the HFCAA and
related laws, which now require the SEC to prohibit an issuer&rsquo;s securities from trading on any U.S. stock exchanges if its auditor
is not subject to PCAOB inspections for two consecutive years, may result in the delisting of our Company or the prohibition of trading
in our securities in the future if the PCAOB is unable to inspect our accounting firm at such future time. Delisting may cause a significant
decrease in or a total loss of the value of our securities. Although a shareholder&rsquo;s ownership of our Company may not decrease directly
from delisting, the ownership may become worth much less, or, in some cases, lose its entire value.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Recent
statements by the Chinese government have indicated an intent to exert more oversight and control over offerings that are conducted overseas
and/or foreign investments in China-based issuers. </I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Recent
statements by the Chinese government have indicated an intent to exert more oversight and control over offerings that are conducted overseas
and/or foreign investments in China based issuers. PRC has recently promulgated new rules that require companies collecting or holding
large amounts of data to undergo a cybersecurity review prior to listing in foreign countries, a move that will significantly tighten
oversight over China-based internet giants. The Measures for Cybersecurity Review (2021 version) was promulgated on December 28, 2021
and became effective on February 15, 2022. These measures specify that any &ldquo;online platform operators&rdquo; controlling the personal
information of more than one million users which seek to list on a foreign stock exchange are subject to prior cybersecurity review.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our business belongs to the cross-border merchandise and tourism industry
in China, which does not involve the collection of user data, implicate cybersecurity, or involve any other type of restricted industry.
Based on the advice of PRC counsel, Beijing Dacheng Law Offices LLP (Haikou), and our understanding of currently applicable PRC laws and
regulations, we are not subject to the review or prior approval of the CAC or the CSRC. Uncertainties still exist, however, due to the
possibility that laws, regulations, or policies in the PRC could change rapidly in the future. Any future action by the PRC government
expanding the categories of industries and companies whose foreign securities offerings are subject to review by the CSRC or the CAC could
significantly limit or completely hinder our ability to offer or continue to offer securities to investors and could cause the value of
such securities to significantly decline or be worthless.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
face challenges from the evolving regulatory environment regarding cybersecurity, information security, privacy and data protection,
and user attitude toward data privacy and protection. The Chinese government exerts substantial influence over the manner in which the
operating entities conduct their business activities, may intervene or influence such 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 such operations
and the value of shares of our Common Stock, significantly limit or completely hinder our ability to offer or continue to offer securities
to investors, and cause the value of our securities to significantly decline or be worthless. Many of these laws and regulations are
subject to change and uncertain interpretation, and any actual or alleged failure to comply with related laws and regulations regarding
cybersecurity, information security, data privacy, and protection could materially and adversely affect our business and results of operations.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Recently,
the Chinese government initiated a series of regulatory actions and made a number of public statements on the regulation of business
operations in China. This included, among other actions, the adoption of new measures to extend the scope of cybersecurity reviews, and
the expansion of efforts in anti-monopoly enforcement. Because these statements and regulatory actions are new, it is highly uncertain
(a) how soon legislative or administrative regulation-making bodies in China will respond to them, (b) what existing or new laws or regulations
will be modified or promulgated, if any, or (c) what impact such modified or new laws and regulations will have on the Company&rsquo;s
daily business operations or our ability to accept foreign investments and continue listing our Common Stock on an U.S. securities exchange.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
particular, we face challenges from the evolving regulatory environment regarding cybersecurity, information security, privacy and data
protection, and users&rsquo; attitude toward data privacy and protection. Many of these laws and regulations are subject to change and
uncertain interpretation. Any actual or alleged failure to comply with related laws and regulations regarding cybersecurity, information
security, data privacy and protection could materially and adversely affect our business and results of operations, and 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.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On&nbsp;June
10, 2021, the Standing Committee of the National People&rsquo;s Congress of China promulgated the Data Security Law, which took effect
in September 2021. The Data Security Law sets forth data security and privacy related compliance obligations of entities and individuals
carrying out data related activities. The Data Security Law also introduces a data classification and layered protection system based
on the importance of data and the degree of impact on national security, public interests or legitimate rights and interests of individuals
or organizations if such data is tampered with, destroyed, leaked or illegally acquired or used. In addition, the Data Security Law provides
a national security review procedure for data activities that may affect national security, and imposes export restrictions on certain
data and information.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 28, 2021, the Cyberspace Administration of China&nbsp;(the&nbsp;&ldquo;CAC&rdquo;), together with several other governmental
authorities, jointly released the Cybersecurity Review Measures, which took effect on February 15, 2022. Pursuant to the Cybersecurity
Review Measures, the purchase of network products and services by an operator of critical information infrastructure or the data processing
activities of a network platform operator that affect or may affect national security will be subject to a cybersecurity review. In addition,
network platform operators with personal information of over one million users shall be subject to cybersecurity review before listing
in foreign countries. The competent governmental authorities may also initiate a cybersecurity review against the operators if the authorities
believe that the network product or service or data processing activities of such operators affect or may affect national security. The
cybersecurity review will evaluate, among others, the risk of critical information infrastructure, core data, important data, or the
risk of a large amount of personal information being influenced, controlled or maliciously used by foreign governments after going public,
and cyber information security risk. Given the Cybersecurity Review Measures came into effect recently, their interpretation, application
and enforcement are subject to substantial uncertainties. On November 14, 2021, the CAC published the Regulations for the Administration
of Network Data Security (Draft for Comments), or the Draft Administration Regulations on Cyber Data Security, which provide the circumstances
under which data processors shall apply for cybersecurity review, including, among others, when the data processors who process personal
information of at least one million users apply for a &ldquo;foreign&rdquo; listing. However, it provided no further explanation or interpretation
as to how to determine what constitutes &ldquo;affecting national security&rdquo;. As of the date of this Annual Report, the Draft Administration
Regulations on Cyber Data Security have not been formally adopted. It is uncertain whether and when the final regulation will be issued
and take effect, how it will be enacted, interpreted and implemented, and whether or to what extent it will affect us.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 20, 2021, the Standing Committee of the National People&rsquo;s Congress of China promulgated the Personal Information Protection
Law of the People&rsquo;s Republic of China, effective from November 1, 2021. The Personal Information Protection Law requires, among
others, that (i) the processing of personal information should have a clear and reasonable purpose which should be directly related to
the processing purpose, in a method that has the least impact on personal rights and interests, and (ii) the collection of personal information
should be limited to the minimum scope necessary to achieve the processing purpose to avoid the excessive collection of personal information.
Different types of personal information and personal information processing will be subject to various rules on consent, transfer, and
security. Entities handling personal information shall bear responsibility for their personal information handling activities, and adopt
necessary measures to safeguard the security of the personal information they handle. Otherwise, the entities handling personal information
could be ordered to correct, or suspend or terminate the provision of services, and face confiscation of illegal income, fines or other
penalties.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the meantime, the PRC regulatory authorities have also enhanced the supervision and regulation on cross-border data transfer. On July
7, 2022, the CAC promulgated the Security Assessment Measures for Cross-border Data Transfers with effect from September 1, 2022. These
measures require the data processor providing data overseas and falling under any of the following circumstances apply for the security
assessment of cross-border data transfer by the national cybersecurity authority through its local counterpart: (i) where the data processor
intends to provide important data overseas; (ii) where the critical information infrastructure operator and any data processor who has
processed personal information of more than 1,000,000 people intend to provide personal information overseas; (iii) where any data processor
who has provided personal information of 100,000 people or sensitive personal information of 10,000 people to overseas recipients accumulatively
since January 1 of the last year intends to provide personal information overseas; and (iv) other circumstances where the security assessment
of data cross-border transfer is required as prescribed by the CAC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Given
that the above mentioned newly promulgated laws, regulations and policies were recently promulgated or issued, or have not yet been formally
promulgated or taken effect (as applicable), their enactment, interpretation, application and enforcement are subject to substantial
uncertainties. As the definitions for terms such as network platform operator and national security are broad, and the government will
likely retain significant discretion as to the interpretation and enforcement of the Cybersecurity Review Measures and any implementation
rules, we may be subject to related rules. We cannot preclude the possibility that the Cybersecurity Review Measures will subject us
to the cybersecurity review by the CAC in relation to our operations or require us to adjust our business practices, in which case our
business, financial condition and prospects may be materially and negatively affected. We have incurred, and will continue to incur,
significant expenses in an effort to comply with cybersecurity, privacy, data protection and information security related laws, regulations,
standards and protocols, especially as a result of such newly promulgated laws and regulations. As of the date of this Annual Report,
we have not been involved in any investigations, nor have we received any inquiry, notice, warning, or sanction by the CAC or related
PRC governmental authorities as a result of violation of any currently effective PRC laws or regulations with respect to personal information
or data requirements issued by the CAC up to date. However, as uncertainties remain regarding the interpretation and implementation of
these laws and regulations, despite our efforts to comply with applicable laws, regulations and policies relating to cybersecurity, privacy,
data protection and information security, we cannot assure you that our practices, offerings, services will meet all of the requirements
imposed on us by such laws, regulations or policies. Any failure or perceived failure to comply with applicable laws, regulations or
policies may result in inquiries or other proceedings being instituted against, or other lawsuits, decisions or sanctions being imposed
on us by governmental authorities, users, consumers or other parties, including but not limited to warnings, fines, directions for rectifications,
suspension of the related business and termination of our applications, as well as in negative publicity on us and damage to our reputation,
any of which could have a material adverse effect on our business, results of operations, financial condition and prospects. The above
mentioned newly promulgated laws, regulations, policies or relevant drafts may result in the publication of new laws, regulations and
policies to which we may be subject, though the timing, scope and applicability of such laws or regulations are currently unclear. Any
such laws, regulations or policies could negatively impact our business, results of operations and financial condition, which creates
the risk that any such actions 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.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Changes
in China&rsquo;s economic, political or social conditions or government policies could have a material adverse effect on our business
and operations.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Substantially
all of our assets and operations are located in the PRC. Accordingly, our business, financial condition, results of operations, and prospects
may be influenced to a significant degree by political, economic and social conditions in the PRC generally. The Chinese economy differs
from the economies of most developed countries in many respects, including the level of government involvement, development, growth rate,
control of foreign exchange and allocation of resources. Although the Chinese government has implemented measures emphasizing the utilization
of market forces for economic reform, the reduction of state ownership of productive assets, and the establishment of improved corporate
governance in business enterprises, a substantial portion of productive assets in the PRC is still owned by the government. In addition,
the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies. The Chinese
government also exercises significant control over the PRC&rsquo;s economic growth through allocating resources, controlling payment
of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or
companies. The PRC government also has implemented various measures to encourage foreign investment and sustainable economic growth and
to guide the allocation of financial and other resources. However, we cannot assure you that the PRC government will not repeal or alter
these measures or introduce new measures that will have a negative effect on us.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">While
the Chinese economy has experienced significant growth over past decades, growth has been uneven, both geographically and among various
sectors of the economy. Any adverse changes in economic conditions in the PRC, in the policies of the Chinese government or in the laws
and regulations in the PRC could have a material adverse effect on the overall economic growth of the PRC. Such developments could adversely
affect our business and operating results, lead to a reduction in demand for our services and adversely affect our competitive position.
The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these
measures may benefit the overall Chinese economy, but may have a negative effect on us. For example, our financial condition and results
of operations may be adversely affected by government control over capital investments or changes in tax regulations. In addition, in
the past the Chinese government has implemented certain measures, including interest rate adjustment, to control the pace of economic
growth. These measures may cause decreased economic activity in the PRC, which may adversely affect our business and operating results.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>A
severe or prolonged downturn in the Chinese or global economy could materially and adversely affect our business and financial condition.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
global macroeconomic environment is facing challenges. <FONT STYLE="background-color: white">Although the Chinese economy has grown steadily
in the past decade, </FONT>the growth has been uneven, both geographically and among various sectors of the economy, and the rate of
growth has been slowing down in recent years and may materially decline in the future. T<FONT STYLE="background-color: white">here is
considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies adopted by the People&rsquo;s Bank
of China and financial authorities of some of the world&rsquo;s leading economies, including the United States and China. There have
been concerns over unrest and terrorist threats in the Middle East, Europe and Africa, which have resulted in volatility in oil and other
markets. There have also been concerns on the relationship among China and other Asian countries, which may result in or intensify potential
conflicts in relation to territorial disputes. The ongoing war between Russian and Ukraine has escalated global geopolitical tensions
when Russia launched a large-scale land invasion into Ukraine in February 2022. Economic conditions in China are sensitive to global
economic conditions, as well as changes in domestic economic and political policies and the expected or perceived overall economic growth
rate in China. Any severe or prolonged slowdown in the global or Chinese economy may materially and adversely affect our business, results
of operations and financial condition. </FONT>We engage in cross border merchandise and tourism business and conduct substantially all
of our operations in China; therefore, any deterioration of the PRC economy, decrease in disposable income and fear of a recession may
lead to reductions of customers&rsquo; demand and their spending on fashion products with us. Any severe or prolonged slowdown in the
global or PRC economy may materially and adversely affect our business, results of operations and financial condition.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;<B><I>Uncertainties
with respect to the PRC legal system could adversely affect us.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions under the civil
law system may be cited for reference but have limited precedential value. In 1979, the PRC government began to promulgate a comprehensive
system of laws and regulations governing economic matters generally. The overall effect of legislation over the past three decades has
significantly enhanced the protections afforded to various forms of foreign investments in the PRC. However, the PRC has not developed
a fully integrated legal system, and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities
in the PRC. In particular, the interpretation and enforcement of these laws and regulations involve uncertainties. Since PRC administrative
and court authorities have significant discretion in interpreting and implementing statutory provisions and contractual terms, it may
be difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy. These uncertainties
may affect our judgment on the relevance of legal requirements and our ability to enforce our contractual rights or tort claims. In addition,
these regulatory uncertainties may be exploited through unmerited or frivolous legal actions or threats in attempts to extract payments
or benefits from us.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Furthermore,
the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or
at all and may have a retroactive effect. As a result, we may not be aware of our violation of any of these policies and rules until
sometime after the violation. In addition, any administrative and court proceedings in the PRC may be protracted, resulting in substantial
costs and the diversion of resources and management attention.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;<B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;<B><I>PRC
regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident beneficial
owners or our PRC subsidiary to liability or penalties, limit our ability to inject capital into our PRC subsidiary, limit our PRC subsidiary&rsquo;
ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
July 2014, SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents&rsquo; 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) to register with SAFE or its local branches in connection with their
direct or indirect offshore investment activities. SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be
applicable to any offshore acquisitions that we make in the future.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments
in offshore special purpose vehicles, or SPVs, will be required to register such investments with SAFE or its local branches. In addition,
any PRC resident who is a direct or indirect shareholder of an SPV is required to update its filed registration with the local branch
of SAFE with respect to that SPV, to reflect any material change. Moreover, any subsidiary of such SPV in China is required to urge the
PRC resident shareholders to update their registration with the local branch of SAFE. If any PRC shareholder of such SPV fails to make
the required registration or to update the previously filed registration, the subsidiary of such SPV in China may be prohibited from
distributing its profits or the proceeds from any capital reduction, share transfer or liquidation to the SPV, and the SPV may also be
prohibited from making additional capital contributions into its subsidiary in China. On February 13, 2015, the SAFE promulgated a Notice
on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or SAFE Notice 13, which became effective
on June 1, 2015. Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct 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.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Some
of our shareholders that we are aware of are subject to SAFE regulations, but we may not be aware of the identities of all of our beneficial
owners who are PRC residents. We do not have control over our beneficial owners and there can be no assurance that all of our PRC-resident
beneficial owners will comply with SAFE Circular 37 and subsequent implementation rules, and there is no assurance that the registration
under SAFE Circular 37 and any amendment will be completed in a timely manner, or will be completed at all. Any failure or inability
by such shareholders to comply with SAFE regulations may subject us to fines or legal sanctions, such as restrictions on our cross-border
investment activities or our PRC subsidiary&rsquo;s ability to distribute dividends to, or obtain foreign exchange-denominated loans
from, our company or prevent us from making distributions or paying dividends. As a result, our business operations and our ability to
make distributions to you could be materially and adversely affected.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>U.S.
regulatory bodies may be limited in their ability to conduct investigations or inspections of our operations in China.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
disclosure of documents or information located in China by foreign agencies may be subject to jurisdiction constraints and must comply
with China&rsquo;s state secrecy laws, which broadly define the scope of &ldquo;state secrets&rdquo; to include matters involving economic
interests and technologies. There is no guarantee that requests from U.S. federal or state regulators or agencies to investigate or inspect
our operations will be honored by us, by entities who provide services to us or with whom we associate, without violating PRC legal requirements,
especially as those entities are located in China. Furthermore, under the current PRC laws, an on-site inspection of our facilities by
any of these regulators may be limited or prohibited.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Changes
in China&rsquo;s economic, political or social conditions or government policies could have a material adverse effect on our business
and operations.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Substantially
all of our operations are located in the PRC. Accordingly, our business, financial condition, results of operations and prospects may
be influenced to a significant degree by political, economic and social conditions in the PRC generally. The Chinese economy differs
from the economies of most developed countries in many respects, including the level of government involvement, development, growth rate,
control of foreign exchange and allocation of resources. Although the Chinese government has implemented measures emphasizing the utilization
of market forces for economic reform, the reduction of state ownership of productive assets, and the establishment of improved corporate
governance in business enterprises, a substantial portion of productive assets in the PRC is still owned by the government. In addition,
the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies. The Chinese
government also exercises significant control over the PRC&rsquo;s economic growth through allocating resources, controlling payment
of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or
companies.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">While
the Chinese economy has experienced significant growth over past decades, growth has been uneven, both geographically and among various
sectors of the economy. Any adverse changes in economic conditions in the PRC, in the policies of the Chinese government or in the laws
and regulations in the PRC could have a material adverse effect on the overall economic growth of the PRC. Such developments could adversely
affect our business and operating results, lead to a reduction in demand for our services and adversely affect our competitive position.
The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these
measures may benefit the overall Chinese economy, but may have a negative effect on us. For example, our financial condition and results
of operations may be adversely affected by government control over capital investments or changes in tax regulations. In addition, in
the past the Chinese government has implemented certain measures, including interest rate adjustment, to control the pace of economic
growth. These measures may cause decreased economic activity in the PRC, which may adversely affect our business and operating results.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><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></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">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 its implementing rules that became effective in September 2008 and
was amended in July 2013, employers are subject to stricter requirements in terms of signing labor contracts, minimum wages, paying remuneration,
determining the term of employees&rsquo; 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 effect 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.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>China&rsquo;s
economic, political and social conditions, as well as changes in any government policies, laws and regulations, could have a material
adverse effect on our business.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Substantially
all of our operations are located in China and substantially of our net revenues are derived from customers where the contracting entity
is located in China. Accordingly, our business, financial condition, results of operations, prospects and certain transactions we may
undertake may be subject, to a significant extent, to economic, political and legal developments in China. China&rsquo;s economy differs
from the economies of most developed countries in many respects, including the amount of government involvement, level of development,
growth rate, control of foreign exchange and allocation of resources. Although China&rsquo;s economy has been transitioning from a planned
economy to a more market-oriented economy since the late 1970s, 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&rsquo;s economic
growth through allocating resources, controlling the incurrence and payment of foreign currency-denominated obligations, setting monetary
policy and providing preferential treatment to particular industries or companies. Changes in any of these policies, laws and regulations
could adversely affect the economy in China and could have a material adverse effect on our business.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
PRC government has implemented various measures to encourage foreign investment and sustainable economic growth and to guide the allocation
of financial and other resources. However, we cannot assure you that the PRC government will not repeal or alter these measures or introduce
new measures that will have a negative effect on us. China&rsquo;s social and political conditions may change and become unstable. Any
sudden changes to China&rsquo;s political system or the occurrence of widespread social unrest could have a material adverse effect on
our business and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Uncertainties
with respect to the PRC legal system could adversely affect us.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
operating subsidiaries are incorporated under and governed by the laws of the PRC. The PRC legal system is a civil law system based on
written statutes. Unlike the common law system, prior court decisions under the civil law system may be cited for reference but have
limited precedential value. In 1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing
economic matters generally. The overall effect of legislation over the past three decades has significantly enhanced the protections
afforded to various forms of foreign investments in the PRC. However, the PRC has not developed a fully integrated legal system, and
recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in the PRC. In particular, the interpretation
and enforcement of these laws and regulations involve uncertainties. Since PRC administrative and court authorities have significant
discretion in interpreting and implementing statutory provisions and contractual terms, it may be difficult to evaluate the outcome of
administrative and court proceedings and the level of legal protection we enjoy. These uncertainties may affect our judgment on the relevance
of legal requirements and our ability to enforce our contractual rights or tort claims. In addition, these regulatory uncertainties may
be exploited through unmerited or frivolous legal actions or threats in attempts to extract payments or benefits from us. Furthermore,
the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or
at all and may have a retroactive effect. As a result, we may not be aware of our violation of any of these policies and rules until
sometime after the violation. In addition, any administrative and court proceedings in the PRC may be protracted, resulting in substantial
costs and diversion of resources and management attention.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Furthermore,
intellectual property rights and confidentiality protections in China may not be as effective as in the United States or other countries.
In addition, we cannot predict the effect of future developments in the PRC legal system, including the promulgation of new laws, changes
to existing laws or the interpretation or enforcement thereof, or the preemption of local regulations by national laws. These uncertainties
could limit the legal protections available to us and other foreign investors, including you. In addition, any litigation in China may
be protracted and result in substantial costs and diversion of our resources and management attention.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>You
may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions in China against us
or our management named in the report based on foreign laws.</I></B>&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
conduct substantially all of our operations in China, and substantially all of our assets are located in China. In addition, our current
officers reside within China and are PRC nationals. As a result, it may be difficult for our shareholders to effect service of process
upon us or those persons inside the PRC. In addition, the PRC does not have treaties providing for the reciprocal recognition and enforcement
of judgments of courts with the Marshall Islands and many other countries and regions. Therefore, recognition and enforcement in the
PRC of judgments of a court in any of these non-PRC jurisdictions in relation to any matter not subject to a binding arbitration provision
may be difficult or impossible.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may
have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our
ability to conduct our business.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
rely principally on dividends and other distributions on equity from our PRC subsidiaries for our cash requirements, including for services
of any debt we may incur.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
PRC subsidiaries&rsquo; ability to distribute dividends is based upon their distributable earnings. Current PRC regulations permit our
PRC subsidiaries to pay dividends to their respective shareholders only out of their accumulated profits, if any, determined in accordance
with PRC accounting standards and regulations. In addition, each of our PRC subsidiaries, as a Foreign Invested Enterprise, or FIE, are
required to draw 10% of its after-tax profits each year, if any, to fund a common reserve, which may stop drawing its after-tax profits
if the aggregate balance of the common reserve has already accounted for over 50 percent of its registered capital. These reserves are
not distributable as cash dividends. If our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing
the debt may restrict their ability to pay dividends or make other payments to us. Any limitation on the ability of our PRC subsidiaries
to distribute dividends or other payments to their respective shareholders could materially and adversely limit our ability to grow,
make investments or acquisitions that could be beneficial to our business, pay dividends or otherwise fund and conduct our business.
&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable
to dividends payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties
or arrangements between the PRC central government and governments of other countries or regions where the non-PRC resident enterprises
are incorporated.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><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 the proceeds of future securities offerings 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></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">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. According to the relevant PRC regulations on foreign-invested enterprises,
or FIEs, in China, capital contributions to our PRC subsidiaries are subject to the approval of or filing with the Ministry of Commerce,
or MOFCOM or its local branches and registration with a local bank authorized by the State Administration of Foreign Exchange, or SAFE.
In addition, (i) a foreign loan of less one year duration procured by our PRC subsidiaries is required to be registered with SAFE or
its local branches and (ii) a foreign loan of one year duration or more procured by our PRC subsidiaries is required to be applied to
the NDRC in advance for undergoing recordation registration formalities. Any medium or long-term loan to be provided by us to our PRC
operating subsidiaries, must be registered with the NDRC and the SAFE or its local branches. We may not be able to complete such registrations
on a timely basis, with respect to future capital contributions or foreign loans by us to our PRC Subsidiary. If we fail to complete
such registrations, our ability to use the proceeds of any future securities offerings 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.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 30, 2015, the SAFE promulgated the Circular on Reforming the Management Approach Regarding the Foreign Exchange Capital Settlement
of Foreign-Invested Enterprises, or SAFE Circular 19, which took effect as of June 1, 2015. SAFE 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 net proceeds of future securities offerings to fund our PRC operating subsidiary, 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. <FONT STYLE="background-color: white">On October 23, 2019, SAFE promulgated the Circular of the State Administration of
Foreign Exchange on Further Promoting the Facilitation of Cross-border Trade and Investment, or SAFE Circular 28, which permits non-investment
FIEs to use their capital funds to make equity investments in China, with genuine investment projects and in compliance with effective
foreign investment restrictions and other applicable laws. However, uncertainties still exist in relation to its interpretation and implementation.</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fluctuations
in exchange rates could have a material and adverse effect on our results of operations and the value of your investment.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
value of the Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political
and economic conditions and the foreign exchange policy adopted by the PRC government. It is difficult to predict how long such appreciation
of RMB against the U.S. dollar may last and when and how the relationship between the RMB and the U.S. dollar may change again. All of
our revenues and substantially all of our costs are denominated in Renminbi. We rely on dividends paid by our operating subsidiaries
in China for our cash needs. Any significant revaluation of Renminbi may materially and adversely affect our results of operations and
financial position reported in Renminbi when translated into U.S. dollars, and the value of, and any dividends payable on, the common
stock in U.S. dollars. To the extent that we need to convert U.S. dollars into Renminbi for our operations, appreciation of the Renminbi
against the U.S. dollar would have an adverse effect on the Renminbi amount we would receive. Conversely, if we decide to convert our
Renminbi into U.S. dollars for the purpose of making payments for dividends on our Common Stock or for other business purposes, appreciation
of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Governmental
control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of
currency out of China. We receive substantially all of our revenues in Renminbi. Under our current corporate structure, we primarily
rely on dividend payments from our PRC subsidiaries to fund any cash and financing requirements we may have. Under existing PRC foreign
exchange regulations, payments of current account items, including profit distributions, interest payments and trade and service-related
foreign exchange transactions, can be made in foreign currencies without prior approval of SAFE by complying with certain procedural
requirements. Specifically, under the existing exchange restrictions, without prior approval of SAFE, cash generated from the operations
of our PRC subsidiaries in China may be used to pay dividends to our company. However, approval from or registration with appropriate
government authorities is required, in principle, where RMB is to be converted into foreign currency and remitted out of China to pay
capital expenses such as the repayment of loans denominated in foreign currencies. As a result, we need to obtain SAFE approval to use
cash generated from the operations of our PRC subsidiaries to pay off their respective debt in a currency other than Renminbi owed to
entities outside China, or to make other capital expenditure payments outside China in a currency other than Renminbi. The PRC government
may at its discretion restrict access to foreign currencies for current account transactions in the future. If the foreign exchange control
system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends
in foreign currencies to our shareholders, including holders of the Common stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Certain
PRC regulations may make it more difficult for us to pursue growth through acquisitions.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Among
other things, the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (&ldquo;M&amp;A Rules&rdquo;)
and Anti-Monopoly Law of the People&rsquo;s Republic of China promulgated by the Standing Committee of the NPC which became effective
in 2008 (&ldquo;Anti-Monopoly Law&rdquo;), established additional procedures and requirements that could make merger and acquisition
activities by foreign investors more time-consuming and complex. Such regulation requires, among other things, that State Administration
for Market Regulation (SAMR) be notified in advance of any change-of-control transaction in which a foreign investor acquires control
of a PRC domestic enterprise or a foreign company with substantial PRC operations, if certain thresholds under the Provisions of the
State Council on the Standard for Declaration of Concentration of Business Operators, issued by the State Council in 2008, are triggered.
Moreover, the Anti-Monopoly Law requires that transactions which involve the national security, the examination on the national security
shall also be conducted according to the relevant provisions of the State. In addition, PRC Measures for the Security Review of Foreign
Investment which became effective in January 2021 require acquisitions by foreign investors of PRC companies engaged in military-related
or certain other industries that are crucial to national security be subject to security review before consummation of any such acquisition.
We may pursue potential strategic acquisitions that are complementary to our business and operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Complying
with the requirements of these regulations to complete such transactions could be time-consuming, and any required approval processes,
including obtaining approval or clearance from the MOFCOM, may delay or inhibit our ability to complete such transactions, which could
affect our ability to expand our business or maintain our market share.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">PRC
regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident beneficial
owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC
ability of subsidiaries to increase their registered capital or distribute profits to us, or may otherwise adversely affect us.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
July 2014, SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents&rsquo; Offshore
Investment and Financing and Roundtrip Investment Through Special Purpose Vehicles, or SAFE Circular 37, to replace the Notice on Relevant
Issues Concerning Foreign Exchange Administration for Domestic Residents&rsquo; Financing and Roundtrip Investment Through Offshore Special
Purpose Vehicles, or SAFE Circular 75, which ceased to be effective upon the promulgation of SAFE Circular 37. SAFE Circular 37 requires
PRC residents (including PRC individuals and PRC corporate entities) to register with SAFE or its local branches in connection with their
direct or indirect offshore investment activities. SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be
applicable to any offshore acquisitions that we make in the future.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments
in offshore special purpose vehicles, or SPVs, will be required to register such investments with SAFE or its local branches. In addition,
any PRC resident who is a direct or indirect shareholder of an SPV is required to update its filed registration with the local branch
of SAFE with respect to that SPV, to reflect any material change. Moreover, any subsidiary of such SPV in China is required to urge the
PRC resident shareholders to update their registration with the local branch of SAFE. If any PRC shareholder of such SPV fails to make
the required registration or to update the previously filed registration, the subsidiary of such SPV in China may be prohibited from
distributing its profits or the proceeds from any capital reduction, share transfer or liquidation to the SPV, and the SPV may also be
prohibited from making additional capital contributions into its subsidiary in China. On February 13, 2015, the SAFE promulgated a Notice
on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or SAFE Notice 13, which became effective
on June 1, 2015. Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct 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.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Some
of our shareholders that we are aware of are subject to SAFE regulations, and we expect all of these shareholders will have completed
all necessary registrations with the local SAFE branch or qualified banks as required by SAFE Circular 37. We cannot assure you, however,
that all of these shareholders may continue to make required filings or updates in a timely manner, or at all. We can provide no assurance
that we are or will in the future continue to be informed of identities of all PRC residents holding direct or indirect interest in our
company. Any failure or inability by such shareholders to comply with SAFE regulations may subject us to fines or legal sanctions, such
as restrictions on our cross-border investment activities or our PRC subsidiaries&rsquo; ability to distribute dividends to, or obtain
foreign exchange-denominated loans from, our company or prevent us from making distributions or paying dividends. As a result, our business
operations and our ability to make distributions to you could be materially and adversely affected.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Furthermore,
as these foreign exchange regulations are still relatively new and their interpretation and implementation 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. For example, we may be subject to a more stringent review and approval
process with respect to our foreign exchange activities, such as remittance of dividends and foreign-currency-denominated borrowings,
which may adversely affect our financial condition and results of operations. In addition, if we decide to acquire a PRC domestic company,
we cannot assure you that we or the owners of such company, as the case may be, will be able to obtain the necessary approvals or complete
the necessary filings and registrations required by the foreign exchange regulations. This may restrict our ability to implement our
acquisition strategy and could adversely affect our business and prospects.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date of this disclosure, The PRC residents have applied for foreign exchange registration under the SAFE Circular 37 and other
related rules. Although they are in the process of making foreign exchange registration, they may still face with the above said possible
fines in accordance with the PRC Laws.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Failure
to make adequate contributions to various employee benefit plans and withhold individual income tax on employees&rsquo; salaries as required
by PRC regulations may subject us to penalties.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Companies
operating in China are required to participate in various government-mandated employee benefit contribution plans, including certain
social insurance, housing funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain
percentages of salaries, including bonuses and allowances, of our employees up to a maximum amount specified by the local government
from time to time at locations where we operate our businesses. The requirement of employee benefit contribution plans has not been implemented
consistently by the local governments in China given the different levels of economic development in different locations. Companies operating
in China are also required to withhold individual income tax on employees&rsquo; salaries based on the actual salary of each employee
upon payment. We may be subject to late fees and fines in relation to the underpaid employee benefits and under-withheld individual income
tax, our financial condition and results of operations may be adversely affected.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan
of Overseas Publicly-Listed Company, promulgated by SAFE in 2012, or SAFE Notices No. 7, PRC citizens and non-PRC citizens who reside
in China for a continuous period of no less than one year who participate in any stock incentive plan of an overseas publicly listed
company offered to the director, supervisor, senior management and other employees of, and any individual who has labor relationship
with its domestic affiliated entities are required to register with SAFE through a domestic qualified agent, which could be a PRC subsidiary
of such overseas listed company, and complete certain other procedures. In addition, an overseas entrusted institution must be retained
to handle matters in connection with the exercise or sale of stock options and the purchase or sale of shares and interests. We and our
directors, executive officers and other employees who are PRC citizens or who reside in the PRC for a continuous period of no less than
one year and who have been granted stock options became subject to these regulations when our company became an overseas listed company
upon the completion of our recent initial public offering. Failure to complete the SAFE registrations for our employee incentive plans
after our listing may subject them to fines and legal sanctions, and may also limit our ability to contribute additional capital into
our PRC subsidiaries and limit our PRC subsidiaries&rsquo; ability to distribute dividends to us. We also face regulatory uncertainties
that could restrict our ability to adopt additional incentive plans for our directors, executive officers and employees under PRC law.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, the State Administration of Taxation, or SAT, has issued certain circulars concerning employee stock options and restricted
shares. Under these circulars, our employees working in China who exercise stock options or are granted restricted shares will be subject
to PRC individual income tax. Our PRC subsidiaries have obligations to file documents related to employee stock options or restricted
shares with relevant tax authorities and to withhold individual income taxes of those employees who exercise their share options or are
granted with restricted shares. If our employees fail to pay or we fail to withhold their income taxes according to relevant laws and
regulations, we may face sanctions imposed by the tax authorities or other PRC governmental authorities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>U.S.
regulatory bodies may be limited in their ability to conduct investigations or inspections of our operations in China.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
disclosure of documents or information located in China by foreign agencies may be subject to jurisdiction constraints and must comply
with China&rsquo;s state secrecy laws, which broadly define the scope of &ldquo;state secrets&rdquo; to include matters involving economic
interests and technologies. There is no guarantee that requests from U.S. federal or state regulators or agencies to investigate or inspect
our operations will be honored by us, by entities who provide services to us or with whom we associate, without violating PRC legal requirements,
especially as those entities are located in China. Furthermore, under the current PRC laws, an on-site inspection of our facilities by
any of these regulators may be limited or prohibited.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the PRC Enterprise Income Tax Law and its implementation rules, an enterprise established outside of the PRC with its &ldquo;de facto
management body&rdquo; within the PRC is considered a &ldquo;resident enterprise&rdquo; and will be subject to the enterprise income
tax on its global income at the rate of 25%. The implementation rules define the term &ldquo;de facto management body&rdquo; 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 State Administration of Taxation, or SAT, issued a circular, known as SAT Circular 82, which provides
certain specific criteria for determining whether the &ldquo;de facto management body&rdquo; 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&rsquo;s general
position on how the &ldquo;de facto management body&rdquo; 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 &ldquo;de facto management body&rdquo; 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&rsquo;s financial and human resource matters are made
or are subject to approval by organizations or personnel in the PRC; (iii) the enterprise&rsquo;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.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">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 &ldquo;de facto management body.&rdquo; 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.
In addition, non-resident enterprise shareholders (including the common stockholders) may be subject to PRC tax on gains realized on
the sale or other disposition of the common stock, 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 (including the common stockholders) and any gain realized
on the transfer of the common stock 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 common stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>We
face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 3, 2015, the SAT issued the Public Notice Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties
by Non-Tax Resident Enterprises, or SAT Bulletin 7. SAT Bulletin 7 extends its tax jurisdiction to transactions involving the transfer
of taxable assets through offshore transfer of a foreign intermediate holding company. In addition, SAT Bulletin 7 has introduced safe
harbors for internal group restructurings and the purchase and sale of equity through a public securities market. SAT Bulletin 7 also
brings challenges to both foreign transferor and transferee (or other person who is obligated to pay for the transfer) of taxable assets,
as such persons need to determine whether their transactions are subject to these rules and whether any withholding obligation applies.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">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, or SAT Bulletin 37, which came into effect on December 1, 2017. The SAT Bulletin 37 further clarifies
the practice and procedure of the withholding of non-resident enterprise income tax.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Where
a non-resident enterprise transfers taxable assets indirectly by disposing of the equity interests of an overseas holding company, which
is an &ldquo;Indirect Transfer&rdquo;, the non-resident enterprise as either transferor or transferee, or the PRC entity that directly
owns the taxable assets, may report such Indirect Transfer to the relevant tax authority. Using a &ldquo;substance over form&rdquo; principle,
the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was
established for the purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived from such Indirect Transfer may be
subject to PRC enterprise income tax, and the transferee or other person who pays for the transfer is obligated to withhold the applicable
taxes currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise. Both the transferor and the transferee
may be subject to penalties under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
face uncertainties as to the reporting and other implications of certain past and future transactions where PRC taxable assets are involved,
such as offshore restructuring, sale of the shares in our offshore subsidiaries and investments. Our company may be subject to filing
obligations or taxed if our company is transferor in such transactions, and may be subject to withholding obligations if our company
is transferee in such transactions, under SAT Bulletin 7 and/or SAT Bulletin 37. For transfer of shares in our company by investors who
are non-PRC resident enterprises, our PRC subsidiaries may be requested to assist in the filing under SAT Bulletin 7 and/or SAT Bulletin
37. As a result, we may be required to expend valuable resources to comply with SAT Bulletin 7 and/or SAT Bulletin 37 or to request the
relevant transferors from whom we purchase taxable assets to comply with these circulars, or to establish that our company should not
be taxed under these circulars, which may have a material adverse effect on our financial condition and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>You
may have difficulty enforcing judgments against us.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Most
of our assets are located outside of the United States and most of our current operations are conducted in the PRC. In addition, most
of our directors and officers are nationals and residents of countries other than the United States. A substantial portion of the assets
of these persons is located outside the United States. As a result, it may be difficult for you to effect service of process within the
United States upon these persons. It may also be difficult for you to enforce in U.S. courts judgments on the civil liability provisions
of the U.S. federal securities laws against us and our officers and directors, most of whom are not residents in the United States and
the substantial majority of whose assets are located outside of the United States. In addition, there is uncertainty as to whether the
courts of the PRC would recognize or enforce judgments of U.S. courts. Courts in China may recognize and enforce foreign judgments in
accordance with the requirements of the PRC Civil Procedures Law based on treaties between China and the country where the judgment is
made or on reciprocity between jurisdictions. China does not have any treaties or other arrangements that provide for the reciprocal
recognition and enforcement of foreign judgments with the United States. In addition, according to the PRC Civil Procedures Law, courts
in the PRC will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates basic
principles of PRC law or national sovereignty, security, or the public interest. So, it is uncertain whether a PRC court would enforce
a judgment rendered by a court in the United States.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption laws, and any determination that we
violated these laws could have a material adverse effect on our business.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are subject to the Foreign Corrupt Practice Act, or FCPA, and other laws that prohibit improper payments or offers of payments to foreign
governments and their officials and political parties by U.S. persons and issuers as defined by the statute, for the purpose of obtaining
or retaining business. We have operations, agreements with third parties, and make most of our sales in China. The PRC also strictly
prohibits bribery of government officials. Our activities in China create the risk of unauthorized payments or offers of payments by
the employees, consultants, sales agents, or distributors of our Company, even though they may not always be subject to our control.
It is our policy to implement safeguards to discourage these practices by our employees. However, our existing safeguards and any future
improvements may prove to be less than effective, and the employees, consultants, sales agents, or distributors of our Company may engage
in conduct for which we might be held responsible. Violations of the FCPA or Chinese anti-corruption laws may result in severe criminal
or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business, operating results and financial
condition. In addition, the U.S. government may seek to hold our Company liable for successor liability FCPA violations committed by
companies in which we invest or that we acquire.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>If
we become directly subject to the recent scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have
to expend significant resources to investigate and resolve the matter which could harm our business operations, stock price and reputation,
and could result in a loss of your investment in our stock, especially if such matter cannot be addressed and resolved favorably.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the past few years, U.S. publicly traded companies that have substantially all of their operations in China, particularly companies like
us have been the subject of intense scrutiny, criticism, and negative publicity by investors, financial commentators, and regulatory
agencies, such as the SEC. Much of the scrutiny, criticism, and negative publicity has centered around financial and accounting irregularities
and mistakes, lack of effective internal controls over financial accounting, inadequate corporate governance policies or lack of adherence
thereto and, in many cases, allegations of fraud. As a result of the scrutiny, criticism, and negative publicity, the publicly traded
stocks of many U.S. listed Chinese companies have sharply decreased in value and, in some cases, have become virtually worthless. Many
of these companies are now subject to shareholder lawsuits and SEC enforcement actions, and are conducting internal and external investigations
into the allegations. It is not clear the effect of this sector-wide scrutiny, criticism, and negative publicity will have on our Company,
our business, and our stock price. If we become the subject of any unfavorable allegations, whether such allegations are proven to be
true or untrue, we will have to expend significant resources to investigate such allegations defending our Company. This situation will
be costly, time consuming, and distract our management from growing our company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>The
disclosures in our reports and other filings with the SEC and our other public pronouncements will not be subject to the scrutiny of
any regulatory bodies in the PRC. Accordingly, our public disclosure should be reviewed in light of the fact that no governmental agency
that is located in China where all of our operations and business are located have conducted any due diligence on our operations or reviewed
or cleared any of our disclosure.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Unlike
public reporting companies whose operations are located primarily in the United States, however, all of our operations will be located
in China. Since substantially all of our operations and business takes place in China, it may be more difficult for the Staff of the
SEC to overcome the geographic and cultural obstacles that are present when reviewing our disclosure. These same obstacles are not present
for similar companies whose operations or business take place entirely or primarily in the United States. Furthermore, our SEC reports
and other disclosure and public pronouncements are not subject to the review or scrutiny of any PRC regulatory authority. For example,
the disclosure in our SEC reports and other filings are not subject to the review of the CSRC, a PRC regulator that is tasked with oversight
of the capital markets in China. Accordingly, you should review our SEC reports, filings and our other public pronouncements with the
understanding that no local regulator has done any due diligence on our company and with the understanding that none of our SEC reports,
other filings or any of our other public pronouncements has been reviewed or otherwise been scrutinized by any local regulator.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
holding company structure may limit the payment of dividends.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have no direct business operations other than
the ownership of our subsidiaries. While we have no current intention of paying dividends, should we decide in the future to do so, as
a holding company, our ability to pay dividends and meet other obligations depend upon the receipts of dividends or other payments from
our operating subsidiaries, other holdings, and investments. In addition, our operating subsidiaries, from time to time, may 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 as discussed below. If
future dividends are paid in RMB, fluctuations in the exchange rate for conversion of RMB into U.S. dollars may reduce the amount received
by the U.S. stockholders upon conversion of dividend payments into U.S. dollars.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chinese
regulations currently permit the payment of dividends only out of accumulated profits as determined in accordance with Chinese accounting
standards and regulations. Our subsidiaries in China are also required to set aside a portion of their after tax profits to fund certain
reserve funds according to the Chinese accounting standards and regulations. Currently, our subsidiaries in China are the only sources
of revenues or investment holdings for the payment of dividends. If they do not accumulate sufficient profits under Chinese accounting
standards and regulations to satisfy certain reserve funds as required by the Chinese accounting standards, we will be unable to pay
any dividends.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">After-tax
profits/losses with respect to the payment of dividends from accumulated profits and the annual appropriation of after-tax profits as
calculated pursuant to the Chinese accounting standards and regulations do not result in significant differences as compared to after-tax
earnings as presented in our financial statements. However, there are certain differences between PRC accounting standards and regulations
and IFRS, arising from different treatment of items such as amortization of intangible assets and change in fair value of contingent
consideration rising from business combinations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>The
custodians or authorized users of our controlling&nbsp;non-tangible&nbsp;assets, including chops and seals, may fail to fulfill their
responsibilities, or misappropriate or misuse these assets.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
PRC law, legal documents for corporate transactions, including agreements and contracts, are executed using the chop or seal of the signing
entity or with the signature of a legal representative whose designation is registered and filed with relevant PRC administration for
market regulation. A company chop or seal may serve as the legal representation of the company towards third parties even when unaccompanied
by a signature.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
order to secure the use of our chops and seals, we have established internal control procedures and rules for using these chops and seals.
In any event that the chops and seals are intended to be used, the responsible personnel will submit the application, which will then
be verified and approved by authorized employees in accordance with our internal control procedures and rules. In addition, in order
to maintain the physical security of our chops, we generally have them stored in secured locations accessible only to authorized employees.
Although we monitor such authorized employees, the procedures may not be sufficient to prevent all instances of abuse or negligence.
There is a risk that our employees could abuse their authority, for example, by entering into a contract not approved by us or seeking
to gain control of one of our subsidiaries. If any employee obtains, misuses or misappropriates our chops and seals or other controlling&nbsp;non-tangible&nbsp;assets
for whatever reason, 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 and divert management from our operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Regulation
and censorship of information disseminated over the internet in China may adversely affect our business and reputation and subject us
to liability for information displayed on our website.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
PRC government has adopted regulations governing internet access and the distribution of news and other information over the internet.
Under these regulations, internet content providers and internet publishers are prohibited from posting or displaying over the internet
content that, among other things, violates PRC laws and regulations, impairs the national dignity of China, or is reactionary, obscene,
superstitious, fraudulent or defamatory. Failure to comply with these requirements may result in the revocation of licenses to provide
internet content and other licenses, and the closure of the concerned websites. The website operator may also be held liable for such
censored information displayed on or linked to the websites. If our self-owned online store or content is found to be in violation of
any such requirements, we may be penalized by relevant authorities, and our operations or reputation could be adversely affected.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Potential
Chinese governmental and regulatory interference could significantly limit or completely hinder our ability to offer or continue to offer
securities to investors and cause the value of such securities to significantly decline or be worthless.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
July 6, 2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council
jointly issued the &ldquo;Opinions on Severely Cracking Down on Illegal Securities Activities According to Law,&rdquo; or the Opinions.
The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the
supervision over overseas listings by Chinese companies. Effective measures, such as promoting the construction of relevant regulatory
systems will be taken to deal with the risks and incidents of China-concept overseas listed companies, and cybersecurity and data privacy
protection requirements and similar matters.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 24, 2021, the CSRC released the Administrative Provisions of the State Council Regarding the Overseas Issuance and Listing of
Securities by Domestic Enterprises (Draft for Comments), or the Administration Provisions, and the Measures for the Overseas Issuance
of Securities and Listing Record-Filings by Domestic Enterprises (Draft for Comments), or collectively the Draft Rules Regarding Overseas
Listing, which were published for public comments only with the comment period expired on January 23, 2022. The Draft Rules Regarding
Overseas Listing lay out the filing regulation arrangement for both direct and indirect overseas listing, and clarify the determination
criteria for indirect overseas listing in overseas market.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Draft Rules Regarding Overseas Listing stipulate that the Chinese-based companies, or the issuer, shall fulfill the filing procedures
within three working days after the issuer makes an application for initial public offering and listing in an overseas market. The required
filing materials for an initial public offering and listing should include at least the following: record-filing report and related undertakings;
regulatory opinions, record-filing, approval and other documents issued by competent regulatory authorities of relevant industries (if
applicable); and security assessment opinion issued by relevant regulatory authorities (if applicable); PRC legal opinion; and prospectus.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, an overseas offering and listing is prohibited under any of the following circumstances: (1) if the intended securities offering
and listing is specifically prohibited by national laws and regulations and relevant provisions; (2) if the intended securities offering
and listing may constitute a threat to or endangers national security as reviewed and determined by competent authorities under the State
Council in accordance with law; (3) if there are material ownership disputes over the equity, major assets, and core technology, etc.
of the issuer; (4) if, in the past three years, the domestic enterprise or its controlling shareholders or actual controllers have committed
corruption, bribery, embezzlement, misappropriation of property, or other criminal offenses disruptive to the order of the socialist
market economy, or are currently under judicial investigation for suspicion of criminal offenses, or are under investigation for suspicion
of major violations; (5) if, in past three years, directors, supervisors, or senior executives have been subject to administrative punishments
for severe violations, or are currently under judicial investigation for suspicion of criminal offenses, or are under investigation for
suspicion of major violations; (6) other circumstances as prescribed by the State Council. The Administration Provisions defines the
legal liabilities of breaches such as failure in fulfilling filing obligations or fraudulent filing conducts, imposing a fine between
RMB 1 million and RMB 10 million, and in cases of severe violations, a parallel order to suspend relevant business or halt operation
for rectification, revoke relevant business permits or operational license.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 17, 2023, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies,
or the Trial Measures, and five supporting guidelines, which came into effect on March 31, 2023. The Trial Measures and its supporting
guidelines, reiterate the basic principles of the Draft Rules Regarding Overseas Listing and impose substantially the same requirements
for the overseas securities offering and listing by domestic enterprises. Pursuant to the Trial Measures, domestic companies that seek
to offer or list securities overseas, both directly and indirectly, shall complete the filing procedures with the CSRC pursuant to the
requirements of the Trial Measures within three working days following its submission of initial public offerings or listing application.
If a domestic company fails to complete the required filing procedures or conceals any material fact or falsifies any major content in
its filing documents, such domestic company may be subject to administrative penalties, such as orders to rectify, warnings, fines, and
its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject
to administrative penalties, such as warnings and fines.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">According
to the Notice on the Administrative Arrangements for the Filing of the Overseas Securities Offering and Listing by Domestic Companies
from the CSRC, or the CSRC Notice, which was promulgated on February 17, 2023 and became effective on the same day, the domestic companies
that have already been listed overseas before the effective date of the Trial Measures (i.e. March 31, 2023) shall be deemed as existing
issuers (the &ldquo;Existing Issuers&rdquo;). Existing Issuers are not required to complete the filing procedures immediately, and they
shall be required to file with the CSRC for any subsequent offerings. Further, according to the CSRC Notice, domestic companies obtained
approval from overseas regulatory authorities or securities exchanges (for example, the effectiveness of a registration statement for
offering and listing in the U.S. has been approved) for their indirect overseas offering and listing prior to March 31, 2023 but have
not yet completed their indirect overseas issuance and listing, are granted a six-month transition period from March 31, 2023 to September
30, 2023. Those issuers that complete their indirect overseas offering and listing within such six-month period are deemed as Existing
Issuers and are not required to file with the CSRC for their indirect overseas offerings and listings. Within such six-month transition
period, however, if such domestic companies fail to complete their indirect overseas issuance and listing, they shall complete the filing
procedures with the CSRC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">However,
since the Trial Measures were newly promulgated, their interpretation, application and enforcement remain unclear. If the filing procedure
with the CSRC under the Trial Measures is required for any subsequent offerings, listing or any other capital raising activities, which
may subject us to additional compliance requirements in the future, we cannot assure you that we will be able to get the clearance of
filing procedures under the Trial Measures on a timely basis, or at all. If we do not complete any required record-filing or if we incorrectly
conclude that record-filing is not required or if the CSRC or other regulatory agencies promulgate new rules, explanations or interpretations
requiring that we obtain their prior approvals or record-filing for any follow-on offering, we may be unable to obtain such approvals
and record-filing which could significantly limit or completely hinder our ability to offer or continue to offer securities to our investors.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Furthermore,
the PRC government authorities may strengthen oversight and control over offerings that are conducted overseas and/or foreign investment
in China-based issuers like us. Such actions taken by the PRC government authorities may intervene or influence our operations at any
time, which are beyond our control. Therefore, any such action may adversely affect our operations and significantly limit or hinder
our ability to offer or continue to offer securities and reduce the value of such securities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date of this report, we and our PRC subsidiaries have not been involved in any investigations on cybersecurity review initiated
by the Cyber Administration of China or related governmental regulatory authorities, and have not received any requirements to obtain
permissions from any PRC authorities to issue our Ordinary Shares to foreign investors or were denied such permissions by any PRC authorities.
However, given the current PRC regulatory environment, it is uncertain when and whether we or our PRC subsidiaries, will be required
to obtain permission from the PRC government to list on U.S. exchanges in the future, and even when such permission is obtained, whether
it will be denied or rescinded.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have been closely monitoring regulatory developments in China regarding any necessary approvals from the CSRC or other PRC governmental
authorities required for overseas listings. As of the date of this report, except for the potential uncertainties disclosed above, we
have not received any inquiry, notice, warning, sanctions or regulatory objection from the CSRC or other PRC governmental authorities.
However, there remains significant uncertainty as to the enactment, interpretation and implementation of regulatory requirements related
to overseas securities offerings and other capital markets activities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>RISKS
RELATED TO OUR SECURITIES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>The
Nasdaq Capital Market imposes listing standards on our Common Stock that may be difficult to fulfill, thereby leading to a possible delisting
of our Common Stock. We are currently facing such risk.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our Common Stock is traded
and listed on the Nasdaq Capital Market under the symbol &ldquo;JXJT.&rdquo; We are required to comply with all continued listing requirements,
including among other things, a minimum bid price of $1.00 per share of Common Stock (the &ldquo;Minimum Bid Requirement&rdquo;), minimum
shareholder&rsquo; equity. certain major corporate transactions, the composition of our Board of Directors and committees thereof. The
failure to meet these Nasdaq Capital Market continued listing requirements may result in the delisting&nbsp;of our Common Stock from the
Nasdaq Capital Market, which could adversely affect the liquidity and market price thereof. On October 24, 2022, the Company received
its first letter (the &ldquo;Notice&rdquo;) from the Listing Qualifications Department of The Nasdaq Stock Market LLC (&ldquo;Nasdaq&rdquo;)
notifying the Company that, based upon the closing bid price of its common stock for the last 30 consecutive business days preceding the
Notice, the Company was not in compliance with the Minimum Bid Requirement. The Notice provided the Company a period of 180 calendar days
from the date of the Notice, or until April 24, 2023. While on April 26, 2023, the Company effected a 1-for-10 reverse stock split of
its outstanding shares of Common Stock (the &ldquo;Reverse Stock Split&rdquo;) in order to regain compliance with the Minimum Bid Requirement,
however, the Company did not regain compliance with the Minimum Bid Requirements by April 24, 2023, as required by the Notice. On April
25, 2023, the Company received the determination letter from Nasdaq (the &ldquo;Determination Letter&rdquo;) notifying it that, unless
the Company requested an appeal of that determination to a Nasdaq Hearings Panel, the Staff would schedule the Company&rsquo;s securities
for delisting from the Nasdaq Capital Market and would suspend trading of the Company&rsquo;s Common Stock at the opening of business
on May 4, 2023 due to the Company&rsquo;s failure to regain compliance with the Minimum Bid Requirement. On April 26, 2023, the Company
submitted a request for a hearing before the Nasdaq Hearings Panel to present its plan to regain compliance with the Minimum Bid Requirement.
On April 27, 2023, the Company received a letter from Nasdaq granting the appeal and scheduling the hearing for May 25, 2023. This hearing
request will stay the suspension of the Company&rsquo;s securities and the filing of Form 25-NSE pending the Nasdaq Hearings Panel&rsquo;s
decision.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As of the date of this
Annual Report, the Company believes that it regained compliance with the Minimum Bid Requirements, as its Common Stock has had a closing
bid price of over $1.00 for more than 10 consecutive business days. Upon the filing of this Annual Report, we will <FONT STYLE="background-color: white">submit
a request to the Hearing Panel to evaluate the Company&rsquo;s compliance with the Minimum Bid Requirement and other continued listing
requirements for trading on the Nasdaq Capital Market. However, there is no assurance that Nasdaq Qualification and the Hearing Panel
determine that as of the date of this Annual Report, the Company is in full compliance with all requirements. </FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We also cannot ensure
you that we will continue to comply with all requirements for continued listing on the Nasdaq Capital Market in the future. If we fail
to maintain these Nasdaq listing requirements, our Common Stock will be delisted. If our Common Stock is no longer listed on The Nasdaq
Capital Market, our shares would likely trade on the over-the-counter market. If our shares were to trade on the over-the-counter market,
selling our shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be
delayed, and security analysts&rsquo; coverage of us may be reduced. In addition, in the event our shares are delisted, broker-dealers
have certain regulatory burdens imposed upon them, which may discourage broker-dealers from effecting transactions in our shares, further
limiting the liquidity of our shares. These factors could result in lower prices and larger spreads in the bid and ask prices for our
shares. Such delisting from the Nasdaq Capital Market and continued or further declines in our share price could also greatly impair our
ability to raise additional necessary capital through equity or debt financing, and could significantly increase the ownership dilution
to shareholders caused by our issuing equity in financing or other transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>If
we were delisted from Nasdaq, we may become subject to the trading complications experienced by &ldquo;Penny Stocks&rdquo; in the over-the-counter
market.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Delisting from Nasdaq
may cause our shares of Common Stock to become the SEC&rsquo;s &ldquo;penny stock&rdquo; rules. The SEC generally defines a penny stock
as an equity security that has a market price of less than $5.00 per share or an exercise price of less than $5.00 per share, subject
to specific exemptions. One such exemption is to be listed on Nasdaq. The market price of our Common Stock is currently higher than $1.00
per share. However, because the daily trading volume in our Common Stock is very low, significant price movement can be caused by the
trading in a relatively small number of shares. Therefore, were we to be delisted from Nasdaq Capital Market, our Common Stock may become
subject to the SEC&rsquo;s &ldquo;penny stock&rdquo; rules. These rules require, among other things, that any broker engaging in a purchase
or sale of our securities provide its customers with: (i) a risk disclosure document, (ii) disclosure of market quotations, if any, (iii)
disclosure of the compensation of the broker and its salespersons in the transaction and (iv) monthly account statements showing the market
values of our securities held in the customer&rsquo;s accounts. A broker would be required to provide the bid and offer quotations and
compensation information before effecting the transaction. This information must be contained on the customer&rsquo;s confirmation. Generally,
brokers are less willing to effect transactions in penny stocks due to these additional delivery requirements. These requirements may
make it more difficult for shareholders to purchase or sell our shares. Because the broker, not us, prepares this information, we would
not be able to assure that such information is accurate, complete or current.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>The
market price of our Common Stock may be volatile or may decline regardless of our operating performance based on numerous factors, many
of which are beyond our control.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">There are numerous additional
factors, many of which are beyond our control, that may cause the market price of our Common Stock to fluctuate significantly. These factors
include:</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
earnings releases, actual or anticipated changes in our earnings, fluctuations in our operating results or our failure to meet the expectations
of financial market analysts and investors;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>



<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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">the
financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>



<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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">actions
of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow
our Company, or our failure to meet these estimates or the expectations of investors;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&nbsp;</P>



<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">price
                                            and volume fluctuations in the overall stock market, including as a result of trends in the
                                            economy as a whole; </FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">speculation
                                            about our business in the press or the investment community;</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                                                                                                                                          </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">significant
                                            developments relating to our relationships with our customers or suppliers;</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                                                                                                                                                                                                                                                </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">customer
                                            demand for our products;</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                                                                                                                                                                                          </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">investor
                                            perceptions of our industry in general and our company in particular;</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                                                                                                                                                                                                                                       </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                            operating and stock performance of comparable companies;</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                                                                                                                                                                                                                     </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">general
                                            economic conditions and trends;</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                                                                                                                                                                                                </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">major
                                            catastrophic events;</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                                                                                                                                                                                   </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">announcements
                                            by us or our competitors of new products, significant acquisitions, strategic partnerships
                                            or divestitures;</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                          </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">changes
                                            in accounting standards, policies, guidance, interpretation or principles;</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                                                                                                                                                                                                                                           </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">loss
                                            of external funding sources;</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                                                                                                                                                                                          </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">sales
                                            of our shares, including sales by our directors, officers or significant shareholders; and</FONT></TD></TR><TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
                                                                                                                                                                                                                                                         </TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">additions
                                            or departures of key personnel.&nbsp;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Securities
class action litigation is often instituted against companies following periods of volatility in their share price. This type of litigation
could result in substantial costs to us and divert our management&rsquo;s attention and resources. Moreover, securities markets may from
time to time experience significant price and volume fluctuations for reasons unrelated to operating performance of particular companies.
For example, in July 2008, the securities markets in the United States, China and other jurisdictions experienced the largest decline
in share prices since September 2001. These market fluctuations may adversely affect the price of our shares and other interests in our
company at a time when you want to sell your interest in us.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B><I>If securities or
industry analysts do not publish research or reports about our business, or if they publish a negative report regarding our Common Stock,
the price of our Common Stock and trading volume could decline.</I></B></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
trading market for our Common Stock may depend in part on the research and reports that industry or securities analysts publish about
us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade us, the price
of our Common Stock would likely decline. If one or more of these analysts cease coverage of our Company or fail to regularly publish
reports on us, we could lose visibility in the financial markets, which could cause the price of our Common Stock and the trading volume
to decline.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
do not intend to pay dividends for the foreseeable future.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and do not anticipate
paying any cash dividends on our shares. Accordingly, investors must be prepared to rely on sales of their shares after price appreciation
to earn an investment return, which may never occur. Investors seeking cash dividends should not purchase our shares. Any determination
to pay dividends in the future will be made at the discretion of our Board, and will depend on our results of operations, financial condition,
contractual restrictions, restrictions imposed by applicable laws, and other factors the Board deems relevant.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
have granted, and may continue to grant, stock-based awards to Key Employees and Consultants, which will increase our share-based compensation
and may have an adverse effect on our results of operations.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
order to compete for talents, we may need to offer higher compensation to our key and consultants, including granting awards under our
current equity incentive plan, which may include the grant of shares of restricted common stocks. We have adopted various equity incentive
plans, including the 2018 Equity Incentive Plan, the 2022 Plan, and the most recent, the New 2022 EIP. In addition, we granted a performance-based
stock awards to our Chief Executive Officer, Chief Financial Officer, co-chairwoman and director. We believe the granting of stock-based
awards is important to our ability to attract and retain key personnel and employees, and we will continue to grant share-based awards
in the future. As a result, our expenses associated with share-based compensation will increase, which may have an adverse effect on
our results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the fiscal year ended December 2022, we provided a stock-based compensation to our key employees and by granting awards under our 2022
Plan and, upon its termination, under the New 2022 EIP pursuant to registration statements on Form S-8. The issuance of such shares resulted
in a deduction in our profit although there is no cash paid out. However, such deduction in profit makes our financial performance looks
less attractive to the investor and cause difficulties to raise sufficient capital to support our business.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
are a &ldquo;foreign private issuer&rdquo; and have disclosure obligations that are different than those of U.S. domestic reporting companies.
Therefore, you should not expect to receive the same information about us as a U.S. domestic reporting company may provide. Furthermore,
we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the
Nasdaq corporate governance listing standards; these practices may afford less protection to stockholders than they would enjoy if we
complied fully with the Nasdaq corporate governance listing standards.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are a foreign private issuer. As a result, we are not subject to certain of the requirements imposed upon U.S. domestic issuers by the
SEC. For example, we are not required by the SEC or the federal securities laws to issue quarterly reports or file proxy statements with
the SEC. We are also required to file our annual report on Form 20-F with the SEC within four months of our fiscal year end. We are also
not required to disclose certain detailed information regarding executive compensation that is required from U.S. domestic issuers. Further,
our directors and executive officers are not required to report equity holdings under Section 16 of the Securities Act. As a foreign
private issuer, we are also exempt from the requirements of Regulation FD (Fair Disclosure) which, generally, are meant to ensure that
select groups of investors are not privy to specific information about an issuer before other investors. We are, however, still subject
to the anti-fraud and anti-manipulation rules of the SEC, such as Rule 10b-5. Since many of the disclosure obligations required of us
as a foreign private issuer are different than those required by U.S. domestic reporting companies, our shareholders should not expect
to receive all of the same types of information about us and at the same time as information is received from, or provided by, U.S. domestic
reporting companies. We are liable for violations of the rules and regulations of the SEC, which do apply to us as a foreign private
issuer. Violations of these rules could affect our business, results of operations, and financial condition.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a foreign private issuer, we are also permitted to rely on exemptions from certain NASDAQ corporate governance standards applicable to
domestic U.S. issuers. This may afford less protection to holders of our securities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are exempted from certain corporate governance requirements of the Nasdaq Stock Market by virtue of being a foreign private issuer. As
a foreign private issuer, we are permitted to follow the governance practices of our home country, the Republic of the Marshall Islands
in lieu of certain corporate governance requirements of Nasdaq. As result, the standards applicable to us are considerably different
than the standards applied to domestic U.S. issuers. For instance, we are not required to:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">have
                                            a compensation committee and a nominating committee to be comprised solely of &ldquo;independent
                                            directors; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">hold
                                            an annual meeting of shareholders no later than one year after the end of the Company&rsquo;s
                                            fiscal year-end.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a result, you may not have the same protections afforded to shareholders of companies that are subject to all of the Nasdaq corporate
governance requirements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Future
sales or perceived sales of our shares of Common Stock could depress our stock price.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">As of the date of this
Annual Report, we have 6,063,192 shares of Common Stock outstanding. Many of these shares were either recently registered in the registration
statements on Form S-8 pursuant to our equity incentive plans or will become eligible for sale in the public market, subject to limitations
imposed by Rule 144 under the Securities Act. If the holders of these shares were to attempt to sell a substantial amount of their holdings
at once, the market price of our Common Stock could decline. Moreover, the perceived risk of this potential dilution could cause shareholders
to attempt to sell their shares and investors to short the Common Stock, a practice in which an investor sells shares that he or she does
not own at prevailing market prices, hoping to purchase shares later at a lower price to cover the sale. As each of these events would
cause the number of shares of our Common Stock being offered for sale to increase, the market price of our Common Stock would likely further
decline. All of these events could combine to make it very difficult for us to sell equity or equity-related securities in the future
at a time and price that we deem appropriate.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Holders
of our securities may face difficulties in protecting their interests because we are incorporated under the Republic of the Marshall
Islands law.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are a company incorporated under the laws of the Marshall Islands, and almost all of our assets are located outside the United States.
In addition, majority of our directors and officers, and their assets, are located outside of the United States. As a result, you may
have difficulty serving legal process within the United States upon us or any of these persons. You may also have difficulty enforcing,
both in and outside the United States, judgments you may obtain in U.S. courts against us or these persons in any action, including actions
based upon the civil liability provisions of U.S. federal or state securities laws. You may also have difficulty bringing an original
action in the appropriate court of the Marshall Islands to enforce liabilities against us or any person based upon the U.S. federal securities
laws.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Provisions
of our articles of incorporation may impede a takeover or make it more difficult for shareholders to change the direction or management
of the Company, which could reduce shareholders&rsquo; opportunity to influence management of the Company.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Amended and Restated Articles of Incorporation, as amended (the &ldquo;Restated Articles&rdquo;) permit our Board to issue up to five
million shares of preferred stock with a par value of $0.0001 (the &ldquo;Preferred Stock&rdquo;) from time to time, with such rights
and preferences as they consider appropriate. These terms may include voting rights including the right to vote as a series on particular
matters, preferences as to dividends and liquidation, conversion rights and redemption rights provisions. The issuance of any preferred
stock could reduce the value of our Common Stock. In addition, specific rights granted to future holders of preferred stock, including
voting rights and conversion rights, could be used to restrict our ability to merge with, or sell assets to, a third party. As of the
date of this Annual Report, the Company has created and designated the following series of the Preferred Stock: (i) Series A Convertible
Preferred Stock: (ii) Series B Participating Preferred Stock; (iii) Series C Convertible Preferred Stock; and (iv) Series D Convertible
Preferred Stock. Sun Lei, our Chief Executive Officer, Interim Financial Officer, co-chairwoman and director, holds 150,000 shares of
Series C Convertible Preferred Stock that are convertible into 75,000 shares of our Common Stock, 1,240,000 shares of Series A Convertible
Preferred Stock, convertible into 124,000 shares of Common Stock, and 80,000 shares of Series D Preferred Stock, convertible into 104,000
shares of Common Stock. The ability of the Board to issue preferred stock could make it more difficult, delay, discourage, prevent or
make it more costly to acquire or effect a change-in-control, which in turn could prevent shareholders from recognizing a gain in the
event that a favorable offer is extended and could materially and negatively affect the market price of shares of our Common Stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><A NAME="g_014"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>ITEM
4. INFORMATION ON THE COMPANY</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><A NAME="g_015"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>A.
History and Development of the Company</B></FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are a Republic of the Marshall Islands company
incorporated under the Marshall Islands Business Corporations Act (&ldquo;BDA&rdquo;) on January 26, 2012. We were originally organized
under the name &ldquo;Acquisition Corp.&rdquo; for the purpose of acquiring through a merger, capital stock exchange, asset acquisition,
stock purchase, or similar acquisition transaction, one or more operating businesses or assets.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
address of the Company&rsquo;s principal executive office is Bin Hai Da Dao No. 270, Lang Qin Wan Guo Ji Du Jia Cun Zong He Lou, Xiu
Ying District, Haikou City, Hainan Province 570100, People&rsquo;s Republic of China</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
March 24, 2014, we entered into a share exchange agreement and plan of liquidation (the &ldquo;Exchange Agreement&rdquo;), with KBS International,
Hongri International, a then wholly owned subsidiary of KBS International and Cheung So Wa and Chan Sun Keung, each an individual and
shareholder of KBS International (each, a &ldquo;Principal Stockholder&rdquo;). The Exchange Agreement was subsequently amended on June
21, 2014. The transactions contemplated in the Exchange Agreement (the &ldquo;Share Exchange&rdquo;) were closed on August 1, 2014. At
the closing, we acquired 100% of the issued and outstanding equity interest in Hongri International from KBS International. Pursuant
to the Exchange Agreement, KBS International was liquidated and dissolved in August 2014 and the shares of Common Stock of the Company
were distributed to each shareholder of KBS International according to their respective ownership of KBS International.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
October 31, 2014, we amended our Articles of Incorporation to change our name to KBS Fashion Group Limited.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 3, 2017, the Company effected a one-for-fifteen
reverse stock split of the Company&rsquo;s issued and outstanding Common Stock. Our Common Stock began trading on the NASDAQ Stock Market
on a split-adjusted basis when the market opened on February 9, 2017.&nbsp;</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 9, 2020, we entered into a Share Exchange Agreement (the &ldquo;Share Exchange Agreement&rdquo;) with Flower Crown Holding,
a corporation organized under the laws of the Cayman Islands (the &ldquo;Flower Crown&rdquo;), and the shareholders of Flower Crown (each
a &ldquo;FC Shareholder&rdquo; and collectively the &ldquo;FC Shareholders&rdquo;), to acquire all the issued and outstanding ordinary
shares of Flower Crown in exchange for the issuance to the FC Shareholders an aggregate of 25,913 shares of our Common Stock (the &ldquo;Share
Exchange&rdquo;). The Share Exchange transaction was closed on December 21, 2020 and as a result, Flower Crown is now our wholly-owned
subsidiary.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Flower
Crown is a holding company incorporated on August 7, 2020 in Cayman Islands, which wholly owns Flower Crown (China) Holding Group Co.,
Limited, a limited company incorporated in Hong Kong on May 24, 2018 (&ldquo;Flower Crown HK&rdquo;). Flower Crown HK, in turn, wholly
owns all of the share capital of Kim Hyun Technology (Tianjin) Co., Ltd, a wholly foreign-owned enterprise incorporated on July 23, 2020
in China (&ldquo;Kim Hyun Tianjin&rdquo; or &ldquo;WFOE&rdquo;). Kim Hyun Tianjin, through a series of contractual arrangements, manages
and controls our operating entity, Jin Xuan Luxury Tourism (Hainan) Digital Technology Co., Ltd, a limited company incorporated on August
4, 2016 in P.R.China (&ldquo;Jin Xuan Luxury Tourism&rdquo;). Jin Xuan Luxury Tourism wholly owns two subsidiaries, namely Flower Crown
(Hainan) Cross-Border E-Commerce Co., Ltd., a limited company incorporated on July 17, 2020 in P.R.China (&ldquo;Flower Crown China&rdquo;),
and Beijing Heyang International Travel Service Co., Ltd., a limited company incorporated on March 29, 2018 in P.R.China (&ldquo;Heyang
Travel&rdquo;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Concurrently
with the conclusion of the Share Exchange Agreement on December 9, 2020, we entered into a Stock Purchase Agreement (the &ldquo;Stock
Purchase Agreement&rdquo;) with Ms. Sun Lei, who at that time was Chief Executive Officer and a director of the Company, which provided
for the issuance of an aggregate of 23,321 shares of the Company (the &ldquo;Purchased Shares&rdquo;) in exchange for making payments
on behalf of the Company for all &ldquo;Public Company Expenses&rdquo; as set forth in the Stock Purchase Agreement for the next two
years, in the amount of no less than $600,000 and no more than $700,000 (&ldquo;Stock Purchase&rdquo;). The Stock Purchase transaction
was closed on December 21, 2020. Pursuant to the term of the Stock Purchase Agreement, the Purchased Shares were held in escrow by an
escrow agent to secure Ms. Sun&rsquo;s obligations under the Stock Purchase Agreement and released in every 6 months, pursuant to a vesting
schedule set forth in the Stock Purchase Agreement. As of the date of this Annual Report, 100% of the Purchased Shares were released
from escrow under this Stock Purchase Agreement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
June 21, 2021, the Company further amended the Restated Articles by filing the Articles of Amendment with the Registrar of the Corporation.
This Amendment to the Articles of Incorporation permitted holders of a majority of the total voting power of the outstanding capital
stock to take any action that is required or permitted to be taken at a meeting of the shareholders, by written consent.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
October 4, 2021, the Company changed its name from &ldquo;KBS Fashion Group Limited&rdquo; to &ldquo;JX Luxventure Limited&rdquo; (the
&ldquo;Name Change&rdquo;) by filing another Articles of Amendment to the Restated Articles with the Registrar of the Corporation reflecting
the change of the corporate name of the Company from &ldquo;KBS Fashion Group Limited&rdquo; to &ldquo;JX Luxventure Limited&rdquo; which
became effective upon filing.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
December 13, 2021, we reorganized our corporate subsidiary structure in the PRC under Flower Crown Holding (&ldquo;FLH&rdquo;). On December
21, 2021, we closed a Share Exchange Agreement with FLH, which operated its China subsidiaries, Jin Xuan Luxury Tourism (Hainan) Digital
Technology Co., Ltd. (&ldquo;JX Hainan Digital&rdquo;), Beijing Heyang International Travel Service Co., Ltd. (&ldquo;Beijing Heyang&rdquo;)
and Flower Crown (Hainan) Cross-Border E-Commerce Co., Ltd. (&ldquo;FCEC&rdquo;) through a variable interest structure (&ldquo;VIE&rdquo;).
As a result of the FLH&rsquo;s China subsidiaries restructuring, we no longer operate those entities through a VIE structure and are
now the indirect sole shareholder of JX Hainan Digital and Beijing Heyang. As part of the restructuring, due to the restriction of foreign
ownership by the relevant laws and regulations of the People&rsquo;s Republic of China, namely Provisions on Administration of Foreign
Invested Telecommunications Enterprise (&#22806;&#21830;&#25237;&#36164;&#30005;&#20449;&#20225;&#19994;&#31649;&#29702;&#35268;&#23450;),
we divested FCEC under a Shares Transfer Agreement with a third party. FCEC represented less than 5% of our total revenues.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
reorganization was approved by the unanimous consent of our Board of Directors and the affirmative vote of the holders of approximately
60.4% of our total issued and outstanding capital stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Following
the reorganization, our corporate structure between December 13, 2021 and October 19, 2022 was as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;<IMG SRC="image_001.jpg" ALT="" STYLE="width: 624px; height: 352px"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 11, 2022, the Board, by unanimous written consent, in accordance with the Company&rsquo;s Bylaws and the terms of the 2018 Equity
Incentive Plan, and the BCA, terminated the Company&rsquo;s 2018 Equity Incentive Plan and adopted the 2022 JX Luxventure Equity Incentive
Plan (the &ldquo;2022 Plan&rdquo;), which provides for up to 1,000,000 shares of our Common Stock that may be issued under the 2022 Plan.
The 2022 Plan was approved by the holders of 60.4% of the total issued and outstanding capital stock of the Company on the same day.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 11, 2022, the Company filed the Registration
Statement on Form S-8, in which it registered 400,000 shares of our Common Stock issuable under the 2022 Plan. On July 13, 2022, the Company
filed another Registration Statement on Form S-8, in which it registered the remaining 600,000 shares of Common Stock issuable under the
2022 Plan. These registration statements became effective upon filing. Between February 12, 2022, and October 25, 2022, the Company issued
all of the 1,000,000 shares of Common Stock available for issuance under the 2022 Plan.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 9, 2022, the Company dismissed its independent registered public accounting firm, WWC, P.C. The Board of Directors of the Company
approved the dismissal of WWC, P.C. and approved the engagement of Onestop Assurance PAC as our independent registered public accounting
firm. Onestop audited the Company&rsquo;s financial statements for the year ended December 31, 2021 and 2022, in accordance with the
U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission (the &ldquo;SEC&rdquo;)
for foreign private issuers and the PCAOB.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 20, 2022, our Board adopted resolutions, by unanimous written consent pursuant to Section 35 of the BCA, in which it
determined that the Certificate of Designation of Series A Preferred, the Certificate of Designation of Series B Participating,
Certificate of Designation of Series C Preferred, and the Certificate of Designation of Series D Preferred were not filed with the
Registrar of Corporations in the Marshall Islands (&ldquo;Registrar of Corporations&rdquo;), in accordance with the provisions of
sections 35 and 5 of the BCA at the relevant time each Certificate of Designation was approved by the Board, and that it is in the
best interests of the Corporation and its stockholders to correct such administrative oversight by filing Certificate of Designation
of Series A Preferred, the Certificate of Designation of Series B Participating, the Certificate of Designation of Series C
Preferred, and the Certificate of Designation of Series D Preferred with the Registrar of Corporations (collectively, the
&ldquo;Certificates of Designation of Preferred Stock&rdquo;).&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
April 25, 2022, the Company filed the Certificates of Designation with the Registrar of Corporations under the Company&rsquo;s former
name, KBS Fashion Group Limited (except for the Certificate of Designation of Series D Preferred), and on April 27, 2022, the Company
filed with the Registrar of Corporations the First Amended and Restated Certificate of Designation of Series A Preferred, the Amended
and Restated Certificate of Designation of Series B Participating, the Amended and Restated Certificate of Designation of Series C Preferred,
and the Amended and Restated Certificate of Designation of Series D Preferred, reflecting the Company&rsquo;s current name &ldquo;JX
Luxventure Limited&rdquo; and restating all provisions set forth in the Certificates of Designation of Preferred Stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 10, 2022, the Company filed the Second Amended and Restated Certificate of Designation of Series A Preferred, which amended the timing
of the conversion of Series A Preferred into Common Stock and restated all other provisions set forth in the First Amended and Restated
Certificate of Designation of Series A Preferred.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 22, 2022, the Board granted 100,000 shares of the Company&rsquo;s Common Stock to Sun Lei pursuant to the employment agreement between
the Company and Sun Lei dated June 22, 2021 (the &ldquo;2021 Employment Agreement&rdquo;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">On June 22, 2022, the
Board authorized a share repurchase program of up to US$5,000,000 of the Company&rsquo;s common stock from time to time during a 12-month
period by Mr. Lei, our Chief Executive Officer of Company (the &ldquo;Share Repurchase Program&rdquo;). Pursuant to the Repurchase Program,
Mrs. Lei will not sell the shares in the public market for at least two years. As of the date of this Annual Report, Ms. Lei completed
the Repurchase Program. Purchase to the Repurchase Program, she acquired in private negotiated transactions 152,000 shares of Common Stock,
at the total purchase price of $1,780,000; 1,240,000 shares of Series A Convertible Preferred Stock, convertible into 124,000 shares of
Common Stock at the total purchase price of $1,240,000; and 80,000 shares of Series D Convertible Preferred Stock, convertible into 104
shares of Common Stock at the purchase price of $2,080,000.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On July 12, 2022, the Company entered into a new
Employment Agreement with Sun Lei (the &ldquo;2022 Employment Agreement&rdquo;). The 2022 Employment Agreement has a term of one (1) year.
Pursuant to the terms of the 2022 Employment Agreement, Sun Lei shall receive cash compensation of USD1.00 and stock compensation, the
amount of which will be based upon the Company&rsquo;s achievements, as to be reported on this Annual Report for the fiscal year ended
December 22, 2022.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<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; width: 82%; font-weight: bold; text-align: left">Company Revenue</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; width: 1%; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; width: 15%; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Number of <BR>
Common Stock</B></FONT></TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>US$59,000,0000 - US$99,999,999</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2,500 Shares</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">US$100,000,000 or more</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5,000 Shares</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Profit (Loss) Margin from Operation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">A 5% - 9% improvement compared to 2021</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5,000 Shares</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">A 10% - 19% improvement compared to 2021</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7,5000 Shares</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">A 20% or more improvement compared to 2021</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10,000 Shares</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Profit from Non-Menswear operation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Achieve profitability on an adjusted basis</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5,000 Shares</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The 2022 Employment Agreement has been approved
by unanimous written consent of the Board and by written consent of holders of a majority of the total issued and outstanding capital
stock of the Company.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>Recent
Developments</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On October 19, 2022, the Company entered into
a stock purchase agreement (the &ldquo;Stock Purchase Agreement&rdquo;) with Shenzhen Zhongjiyingfeng Investment Co., Ltd. (the &ldquo;Purchaser&rdquo;)
and closed the transaction (the &ldquo;Closing&rdquo;) pursuant to the terms of the Stock Purchase Agreement (the &ldquo;Sale and Purchase
Transaction&rdquo;), resulting in the Company&rsquo;s sale of 20,000 shares of common stock of Hongri International, constituting all
of the issued and outstanding capital stock of Hongri International, to the Purchaser, in consideration for $10,000,000 (the &ldquo;Purchase
Price&rdquo;).</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
the Closing, the Purchaser issued to the Company a 5% promissory note in the principal amount of $10,000,000, in payment of the Purchase
Price (the &ldquo;Note&rdquo;). The Note is payable in four installments, on the following dates and in the following amounts: (a) $1,000,000,
together with an accrued interest, is payable on or before November 19, 2022; (b) $2,000,000, together with an accrued interest, is payable
on or before April 19, 2023; (c) $3,000,000, together with an accrued interest, is payable on or before April 19, 2024, and (d) the remaining
$4,000,000, together with an accrued interest, is payable on or before October 19, 2024. As further inducement of the Company to enter
into the Stock Purchase Agreement and to sell the Shares to the Purchaser on the terms of the Stock Purchase Agreement, on the Closing,
the Purchaser and the Company entered into and executed a Pledge and Security Agreement (the &ldquo;Pledge Agreement&rdquo;), pursuant
to which the Purchaser, as the Borrower under the Note, granted the Company a first priority security interest in the Shares of Hongri.
As of the date of this Annual Report, the Purchaser made two payments in the amount of $3,000,000, as required under the Note.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prior
to the Closing, Hongri International was a wholly-owned subsidiary of the Company through which the Company operated its menswear business.
As a result of the Closing, the Company no longer operates menswear business segment, and Hongri International and its wholly-owned subsidiaries,
France Cock (China) Limited, a Hong-Kong company that owned Company&rsquo;s trademarks, including &ldquo;KBS&rdquo; and &ldquo;Kabiniao,&rdquo;
Roller Rome Limited (&ldquo;Roller Rome&rdquo;), a BVI company, Vast Billion Investment Limited, a Hong Kong company, Hongri PRC, and
Anhui Kai Xin Apparel Company Limited, a PRC company, are no longer the subsidiaries of the Company. Currently, the Company has the following
corporate structure:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><IMG SRC="image_008.jpg" ALT="Diagram, table&#10;&#10;Description automatically generated with medium confidence" STYLE="height: 446px; width: 554px"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On October 26, 2022, the Board, acting by unanimous
consent, in accordance with applicable provisions of the Marshall Island Business Corporations Act (&ldquo;BCA&rdquo;) and the Company&rsquo;s
Bylaws, terminated the 2022 Plan and adopted a new 2022 Equity Incentive Plan (the &ldquo;New 2022 EIP&rdquo;), replacing the 2022 Plan,
effective immediately. On the same date, the holders of 75% of the total issued and outstanding capital stock of the Company entitled
to vote therein, acting by written consent, approved and authorized the terms and provisions of the New 2022 EIP, in accordance with the
applicable provisions of the BCA and the Company&rsquo;s Bylaws.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The maximum aggregate
number of shares of Common Stock, issuable under the New 2022 EIP is four million (4,000,000) shares, subject to adjustments in the event
of certain reorganizations, mergers, combinations, recapitalizations, share splits, share dividends, or other similar events which change
the number or kind of shares outstanding. On November 4, 2022, the Company filed a new S-8 Registration Statement, registering 2,000,000
shares out of the total 4,000,000 shares of Common Stock, available to be issued under the New 2022 EIP. On December 12, 2022, the Company
registered the remaining 2,000,000 shares of Common Stock available to be issued under the New 2022 EIP under another S-8 Registration
Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On October 24, 2022, the Company received the
initial letter (the &ldquo;Notice&rdquo;) from the Listing Qualifications Department of The Nasdaq Stock Market LLC (&ldquo;Nasdaq&rdquo;),
notifying the Company that, based upon the closing bid price of its common stock for the last 30 consecutive business days preceding the
Notice, the Company was not in compliance with the $1.00 per share minimum bid price for continued listing on The Nasdaq Capital Market
under Nasdaq Listing Rule 5550(a)(2) (the &ldquo;Minimum Bid Requirement&rdquo;). The Notice provided the Company a period of 180 calendar
days from the date of the Notice, or until April 24, 2023, as set forth in Listing Rule 5810(c)(3)(A) (the &ldquo;Compliance Period&rdquo;),
to regain compliance with Minimum Bid Requirement.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 24, 2023, the Board and holders of a
majority of the Company&rsquo;s voting power of the outstanding capital stock, approved, by written consent in lieu of a meeting (a) a
reverse stock split of the Company&rsquo;s outstanding common stock, $0.0001 par value per share (the &ldquo;Common Stock&rdquo;) in a
ratio of not less than 1-for-5 and not more than 1-for-15 (the &ldquo;Split Range&rdquo;) and granted the Board the ultimate authority
to determine the exact split ratio of the reverse stock split within the Split Range, and (b) the form, terms, and provisions of an Amendment
to the Amended and Restated Articles of Incorporation (the &ldquo;Amendment&rdquo;). On April 17, 2023, the Board determined that, based
on the market price of the Company&rsquo;s Common Stock, a 1-for-10 split ratio would be appropriate (the &ldquo;Reverse Stock Split&rdquo;).
On April 25, 2023, the Company filed the Amendment to the Restated Articles with the Registrar or Deputy Registrar of Corporations in
the Marshall Islands, implementing the Reverse Stock Split. Upon the opening of the market on April 26, 2023, the Company&rsquo;s common
stock began trading on the Nasdaq Capital Market on a post-split basis. Since that date, the Company&rsquo;s common stock has continually
traded well above the Minimum Bid Requirement. However, the Company did not regain compliance with the Minimum Bid Requirement by April
24, 2023, as required by the Notice.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On April 25, 2023, the Company received a Staff
Determination Letter (the &ldquo;Determination Letter&rdquo;) from the Listing Qualifications Department of Nasdaq notifying it that,
unless the Company requested an appeal of that determination to a Nasdaq Hearings Panel, the Staff would schedule the Company&rsquo;s
securities for delisting from The Nasdaq Capital Market and would suspend trading of the Company&rsquo;s common stock at the opening of
business on May 4, 2023 due to the Company&rsquo;s failure to regain compliance with the Minimum Bid Requirement. On April 26, 2023, the
Company submitted a request for a hearing before the Nasdaq Hearings Panel to present its plan to regain compliance with the Minimum Bid
Requirement. On April 27, 2023, the Company received a letter from&nbsp;Nasdaq granting the appeal and scheduling the hearing for May
25, 2023.&nbsp; This hearing request will stay the suspension of the Company&rsquo;s securities and the filing of Form 25-NSE pending
the Nasdaq Hearings Panel&rsquo;s decision. On May 10, 2023, our Common Stock traded for over $1.00 for ten consecutive business days.
We will request <FONT STYLE="background-color: white">the Hearing Panel to evaluate the Company&rsquo;s compliance with the Minimum Bid
Requirement and other continued listing requirements for trading on the Nasdaq Capital Market. However, there is no assurance that Nasdaq
Qualification and the Hearing Panel determine that as of the date of this Annual Report, the Company is in full compliance with all continued
listing requirements. </FONT>&nbsp;</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Securities and Exchange Commission, or SEC, maintains an Internet site that contains reports, proxy and information statements and other
information regarding issuers that file electronically with the SEC at http://www.sec.gov.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">See
&ldquo;<I>Item 5. Operating and Financial Review and Prospects&mdash;B. Liquidity and Capital Resources&mdash;Capital Expenditures</I>&rdquo;
for a discussion of our capital expenditures.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
web site address is http://www.jxluxventure.com. Information contained on, or that can be accessed through, our website does not constitute
a part of this Annual Report.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><A NAME="g_017"></A><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>B.</B></FONT> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Business Overview</B></FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are a holding company incorporated in Marshall
Islands that conducts substantially all of its business operations in China. Following the sale of our wholly-owned subsidiary, Hongri
International and its wholly-owned subsidiaries, through which the Company previously operated its menswear business, we divested our
menswear business and have consistently focused our business operations on the tourism sector and supplying related products, including
technology solutions, to business partners in China, both online and offline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="background-color: white">We believe
that the significant growth and success of our business operations since 2020 can be attributed to the high quality of our employees,
our ability to offer our business clients </FONT>high-end travel products full range of services related to luxury tourism and supplemental
services <FONT STYLE="background-color: white">to reduce their total cost of procurement and </FONT>ensuring that our clients receive
the high-quality professional assistance they need.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We operate in the following operating segments
of business:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">1) Airline tickets and tourism services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">2) Software Solution for Tourism Cross-border
operation and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">3) Tourism Cross-border Merchandise. The focus
on our technology solution has enabled us to achieve significant growth since 2020 by facilitating tourism cross-border commerce and offering
services in tourism and airline tickets.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our website is www.jxluxventure.com.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I><U>Our Mission</U></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our mission is to provide outstanding value to
our clients and to enhance their satisfaction. We believe that we have and will maintain a competitive edge in the evolving travel industry
that will help us to remain at the forefront of the evolving travel industry. based on our reliability, our dedication to deliver professional
high-quality value that contributes to the success and growth of our clients and our comprehensive approach to procurement, package design,
and distribution of our products and services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I><U>Our Strategy</U></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To achieve this goal, we implement the following
strategy:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><U>Strategic Partnerships</U>: We continuously seek new opportunities to forge mutually beneficial partnerships
with airlines and other stakeholders in the travel industry, further enhancing our service offerings.</TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><U>Technology Advancements</U>: Our investment in cutting-edge software solutions enables us to streamline
processes, optimize pricing, and ultimately deliver superior travel experiences to our clients&rsquo; end-users.</TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><U>Customer Support</U>: We prioritize providing high-quality customer support, ensuring that our business
clients receive the assistance they need to address any challenges that may arise during their partnership with us.</TD></TR></TABLE>

<P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<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"><U>Market Analysis</U>:
                                            Our team of experts constantly monitors market trends and industry developments, allowing
                                            us to adapt and innovate our offerings to meet the evolving needs of our clients.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Since December 2021, our subsidiaries engaged
in the following transactions related to cross-border merchandise, the software solution for tourism cross-border operations, and travel
services and products with our business clients and partners:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 30, 2021, Flower Crown (China) Holding
Group Co., Limited. (&ldquo;Flower Crown&rdquo;), entered into a Global Shopping E-Commerce Open Platform Store Service Agreement (the
&ldquo;E-Commerce Service Agreement&rdquo;) with Global Premium Buy (Macau) Limited (&ldquo;GPBL&rdquo;). Pursuant to the E-Commerce Service
Agreement, Flower Crown has opened online stores on GPBL&rsquo;s platform and engages in product sharing on content platforms operated
by GPBL&rsquo;s affiliates, which include &ldquo;Tik Tok&rdquo;, &ldquo;Dou Yin&rdquo;, &ldquo;Xigua&rdquo; and &ldquo;Tik Tok Volcano
Edition&rdquo;. &nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 27, 2021, JX Luxventure (Hainan) Digital
Technology Co., Ltd. closed a Real Estate Transaction Contract with a non-affiliate, acquiring a piece of commercial real estate of 240
square meters for cross-border operations for the amount of USD $2,338,464 based upon the appraisal report.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 9, 2022, Jin Xuan Luxury Tourism (Hainan)
Digital Technology Co., Ltd. (&ldquo;JX Hainan&rdquo;), a subsidiary of the Company, entered into and executed a Memorandum of Japanese
High-end Life Style Services Strategic Cooperation Agreement (the &ldquo;Agreement&rdquo;) with Xin Hua Fund Co., Ltd. (&ldquo;XHFC&rdquo;).
Pursuant to the Agreement, JX Hainan and XHFC will cooperate to bring high-end Japanese medical treatment, rehabilitation treatment, precision
physical examination, anti-aging beauty and other related services to the China market.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 10, 2022, Jin Xuan Luxury Tourism (Hainan)
Digital Technology Co., Ltd. (&ldquo;JX Hainan&rdquo;) entered into and executed a Strategic Cooperation Framework Agreement on Cross-border
Supply Chain of Duty Free Merchandize (the &ldquo;Agreement&rdquo;) with Aikayun Technology (Hainan) Co., Ltd. (&ldquo;Aikayun&rdquo;).
Pursuant to the Agreement, JX Hainan will have the exclusive right to distribute cross-border products from Japan in the Hainan Island
in the amount of up to RMB1,000,000,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 21, 2022, Jin Xuan Luxury Tourism (Hainan)
Digital Technology Co., Ltd. (&ldquo;JX Hainan), entered into and executed a Framework Agreement on Strategic Cooperation (the &ldquo;Agreement&rdquo;)
with Chongqing E-Pet Technology Co., Ltd. (&ldquo;Chongqing E-Pet&rdquo;), one of the major operators of online cross-border pet-food
shopping platform in China. Pursuant to the Agreement, Chongqing E-Pet will purchase from JX Hainan cross-border pet foods in the amount
up to USD60,000,000 to be distributed on the platforms operated by Chongqing E-Pet.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 31, 2022, Jin Xuan Luxury Tourism (Hainan)
Digital Technology Co., Ltd. (&ldquo;JX Hainan&rdquo;), entered into and executed a Framework Agreement on Strategic Cooperation (the
&ldquo;Agreement&rdquo;) with Ragdoll International Trading Co., Ltd. (&ldquo;Ragdoll&rdquo;), an E-commerce platform operator. Pursuant
to the Agreement, Ragdoll will purchase from JX Hainan cross-border pet foods in the amount of up to USD30,000,000 to be distributed on
the platforms operated by Ragdoll.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On May 21, 2022, Beijing Heyang International
Travel Service Co., Ltd. (&ldquo;Beijing HITC&rdquo;) entered and executed a Group Airline Ticket Framework Agreement (the &ldquo;Agreement&rdquo;)
with Tianjin China Travel International Travel Service Co., Ltd. (&ldquo;Tianjin CTITC&rdquo;). Pursuant to the Agreement, Tianjin CTITC
will purchase from Beijing HITC airline tickets in the amount of up to US$10,000,000.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 1, 2022, Jin Xuan Luxury Tourism (Hainan)
Digital Technology Co., Ltd. (&ldquo;JX Hainan&rdquo;) entered into and executed a Technology Consulting Agreement (the &ldquo;Agreement&rdquo;)
with Tianjin City Wei Ka Technology Co., Ltd. (&ldquo;Tianjin Wei Ka&rdquo;). Pursuant to the Agreement, JX Hainan will provide technology
consulting services to Tianjin Wei Ka by delivering a solution for a non-fungible token (NFT)-based virtual human host to be used on live
stream platforms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 17, 2022, Jin Xuan Luxury Tourism (Hainan)
Digital Technology Co., Ltd. (&ldquo;JX Hainan&rdquo;) entered into and executed a Framework Agreement on Strategic Cooperation (the &ldquo;Agreement&rdquo;)
with Hainan Douxing Cultural Media Co., Ltd. (&ldquo;Hainan Douxing&rdquo;), one of the major live stream content providers with over
30 A list live streamers and reaches over 30,000,000 followers in China. Pursuant to the Agreement, Hainan Douxing will sell JX Hainan
cross-border merchandise, including cosmetics and skincare products, in the amount up to USD30,000,000 on the live-stream E-commerce shows
hosted by Hainan Douxing.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="background-color: white">On July
26, 2022, Jin Xuan (Hainan) Holding Co., Ltd.&nbsp;(&ldquo;JX Hainan&rdquo;), entered into and executed a Cooperation Agreement (the &ldquo;Agreement&rdquo;)
with&nbsp;Kaiwo International Trading Co. Ltd. (&ldquo;Kaiwo&rdquo;). Pursuant to the Agreement, Kaiwo will sell high-end foreign luxury
automobiles supplied by JX Hainan in the amount of up to USD50,000,000. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On October 3, 2022, Flower Crown (China) Holding
Group Co., Ltd. (&ldquo;JXFC&rdquo;) entered into and executed a Strategic Cooperation Agreement (the &ldquo;Agreement&rdquo;) with Hainan
Hang Seng Zhongli Commercial Holding Co., Ltd. (&ldquo;HS Zhongli&rdquo;), a leading distributor of pet products in China, for the sale,
marketing and distribution of JXFC&rsquo;s pet food products by HS Zhongli. The Agreement provides that the target annual sales amount
of JXFC&rsquo;s pet food products is $20,000,000 and if HS Zhongli achieves this targeted annual sales amount, the Agreement will be automatically
renewed for an additional year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I><U>Competition</U></I>:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We face intense competition in the cross-border&nbsp;merchandise
and tourism&nbsp;industries from large suppliers and wholesalers of a broad range of services, including tourism and travel-related products.
These companies maintain or develop self-distribution systems for their businesses and have greater brand recognition and financial and
other resources than we do, which may make it more difficult for us to maintain or gain market share. We also face intense competition
from mass merchandisers and rapidly growing alternative retail channels, such as Internet-based retailers that offer a broad range of
products and services and home delivery services. Among our competitors are FASTENAL (NYSE:FAST), SYSCO (NYSE:SYY) and United Natural
Foods (NASDAQ: UNFI).</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The primary competitive factors in the tourism
services and cross-border merchandise business include price, service level, product quality, variety, convenience, and consistency of
service, availability and other value-added services. Competitive strategies vary based on many factors, such as the competitor&rsquo;s
format, strengths, weaknesses, pricing, and sales focus.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I><U>Our Revenue Model Business Segments</U></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I><U>Airline Tickets and Tourism Services</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are a well-known supplier of airline tickets,
catering to the needs of our esteemed business customers. Our tourism products provide luxury travel experience packages, designed exclusively
for online platforms operated by our distinguished business clients. Our current roster of prominent partners includes industry frontrunners
such as 51books.com and Beijing Jiuzhou Skyline International Travel Service Co., Ltd. We have successfully forged agreements with 37
airline operators within China, encompassing a significant portion of the market. Among our top clients are leading industry players such
as Guangzhou Kanghui International Travel Agency Co., Ltd and CITIC International Travel.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We provide more compelling, bundled travel experience
packages that cater to a diverse range of our business customer needs, among which are travel packages that are designed exclusively for
online platforms operated by our distinguished business clients, to ensure seamless integration with their online platforms and streamlined
distribution to their end-users.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our comprehensive process for curating these luxury
travel packages includes the following key steps:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><U>Tailored Travel Packages</U>: We carefully design travel packages that cater to diverse consumer interests
and preferences, ensuring our clients can offer unique, memorable experiences to their end-users.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><U>Strategic Partnerships</U>: We forge strong relationships with airlines and other travel industry stakeholders,
enabling us to secure competitive pricing for our clients.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><U>Cutting-Edge Technology</U>: Our software solution streamlines the booking and management processes
for our clients, enhancing the overall travel experience for their end-users.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><U>Procurement of Luxury Assets</U>: We carefully select and procure non-refundable time allocations from
our exclusive network of luxury service providers, including top-tier automobile and yacht companies.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><U>Package Design and Curation</U>:
                                            Our team of experienced professionals thoughtfully combines these luxury assets to create
                                            unique, all-encompassing luxury experiences tailored to the diverse preferences and expectations
                                            of our clients&rsquo; end-users.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><U>Supply and Distribution</U>: We efficiently supply these high-end travel products to our business clients,
ensuring seamless integration with their online platforms and streamlined distribution to their end-users.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In our commitment to maintaining strong relationships
with our business clients and partners, we assume all risks associated with the non-refundable nature of our purchases, making it easier
for our business clients to offer luxury experiences to their end-user customers. That process evidences our dedication to the success
of our business clients and ensures a seamless customer experience for their end-users. For example, if end-users of our business clients
fail to complete a purchase or request a return, we are fully committed to providing a full refund of the purchase price and assuming
all risks associated with this return.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I><U>Technology Solution for Tourism Cross-Border
Operations:</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our software solution for tourism cross-border
operations management is a comprehensive, innovative, and reliable tool for businesses engaged in international commerce. By combining
advanced features with a client-centric revenue model, we can foster long-lasting relationships with our business partners while positioning
ourselves as a software solution provider uniquely tailored for tourism cross-border operations management, designed to provide businesses
with a robust, user-friendly, and efficient platform for managing their international commerce activities. The software solution streamlines
product monitoring and distribution processes and offers a range of features and capabilities that enhance overall operational efficiency.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our software solution comprises two primary components:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">1)</TD><TD STYLE="text-align: justify">the Sourcing Solution which empowers us to accurately forecast market trends and offer competitive pricing
to our business clients; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">2)</TD><TD STYLE="text-align: justify">the Business Solution which provides small to medium-sized business partners with a comprehensive platform
to streamline merchandise operations and enhance customer engagement.</TD></TR></TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Business Solution has been recognized by the
Hainan Province&rsquo;s Cross-border Merchandise Association (CMA) as the standard solutions for its members, thus further solidifying its status
as a reliable and innovative solution for businesses engaged in tourism cross-border commerce. Our current largest client is Hainan Province&rsquo;s
Cross-border Merchandise Association, a testament to the software&rsquo;s efficacy and value in the marketplace.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Software Solution provides the following benefits:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">&nbsp;</P>

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<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><U>Real-Time Inventory Management</U>: Our software solution allows merchants to track product inventory
levels in real-time, enabling them to make informed decisions regarding procurement and distribution, ultimately minimizing stockouts
and excess inventory.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><U>Order Processing and Fulfillment</U>: The software solution facilitates seamless order processing and
fulfillment, ensuring timely delivery of products to customers and enhancing customer satisfaction.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><U>Compliance and Regulatory Support</U>: Our software solution is equipped with tools to help businesses
navigate complex cross-border regulatory requirements, ensuring compliance with various international trade laws and regulations.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><U>Data Analytics and Reporting</U>: The software solution provides advanced data analytics and reporting
capabilities, empowering merchants with valuable insights into their cross-border operations. These insights can be used to identify areas
for improvement, optimize processes, and drive overall business growth.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><U>Scalability and Flexibility</U>: Our software solution is designed to scale alongside businesses as
they grow, allowing them to easily expand their cross-border operations without being hindered by software limitations.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our revenue model is strategically structured
to promote widespread adoption of our software and encourage long-term customer commitment. The first year of use is offered free of
charge, allowing clients to fully experience the benefits of our platform without incurring upfront costs. Following this trial period,
clients transition to a licensing payment model, which generates a steady, recurring revenue stream for our company while providing ongoing
support, updates, and enhancements for our clients.&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I><U>Tourism Cross-border merchandise</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The Company is a supplier
of a broad range of high-quality tourism cross-border merchandise to business clients that operate online and offline platforms, while
simultaneously leveraging cutting-edge technology to optimize operations and support their ongoing success. The Company specializes in
sourcing unique, high-quality Flower Crown Products from a diverse network of international and domestic third-party suppliers. We have
adopted a strategic approach to managing tourism cross-border merchandise, ensuring that our business customers have access to a diverse
range of high-quality products. By adopting advanced solutions such as AI-based analysis and state-of-the-art warehouse management software,
we can create a more efficient supply chain, mitigate risks associated with excess inventory, and ultimately ensure our clients&rsquo; sustained
growth in the competitive market.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our current top three business customers are Chongqing
E-Pet Technology Co., Ltd., <FONT STYLE="background-color: white">Kaiwo International Trading Co. Ltd.</FONT> and Southern Airlines cross-border
e-commerce.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our diverse product portfolios encompass</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">1) health care products;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">2) personal care products;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">3) cosmetics;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">4) maternal and child products;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">5) pet-related products;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">6) universal cuisine,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">7) universal household products and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">8) Pre-owned Electric Cars.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our comprehensive process involves procuring items
from reputable third-party suppliers, storing them securely in our warehouse facilities, and then efficiently distributing these products
to our valued business clients. We implement the same approach to our customers as the approach purchases made from third-party manufacturers
are non-refundable, which means that we assume all risks associated with the tourism cross-border merchandise we acquire. We believe that
we have a niche in this area of cross-border merchandise, which is based on our significant experience in meticulously curating and offering
customized high-end luxury products and services to our clients that encompass various offerings, such as exclusive access to our extensive
network of luxury automobiles and yachts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Our Competitive Strengths and Growth Strategy</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The key aspects of our cross-border Products Supply strategy include:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: justify; width: 0.25in"></TD><TD STYLE="text-align: justify; width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><U>Rigorous Supplier Selection</U>: We prioritize building relationships
with reputable suppliers that consistently deliver high-quality products.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: justify; width: 0.25in"></TD><TD STYLE="text-align: justify; width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><U>Extensive Product Offerings</U>: Our diverse product range is designed
to cater to the varying needs and preferences of our clients&rsquo; end-users.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: justify; width: 0.25in"></TD><TD STYLE="text-align: justify; width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><U>Competitive Pricing</U>: Our focus on maintaining cost-effective supply
chains enables us to provide our clients with attractive pricing structures, ensuring their success in the market.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">To maintain our competitive edge in the rapidly evolving market, we
have implemented several advanced technologies and innovative strategies, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I><U>AI-Based Analysis Program</U>:</I> This
cutting-edge system identifies emerging trends in tourism cross-border merchandise, enabling us to stay ahead of the curve and ensure
our business customers have access to the latest, most sought-after products available in the market. By leveraging artificial intelligence,
we can make more informed decisions about which products to source and supply, ultimately driving the success of our clients.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><I><U>State-of-the-Art
Warehouse Management Software</U></I>: Our custom-developed warehouse management system allows our business customers to monitor real-time
inventory levels, streamlining the supply chain process and ensuring optimal efficiency. This advanced software solution not only enhances
transparency but also fosters trust and collaboration between our company and our clients.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><I><U>Innovative Excess
Inventory Management</U>:</I> Our unique approach to addressing the challenge of surplus inventory involves a dynamic warehouse management
system that facilitates the sharing of unsold merchandise among our business clients. If a client is unable to sell the full amount of
tourism cross-border merchandise supplied by us during a single live stream event, as an example, our system enables other customers to
view the unsold items and place orders accordingly. This strategic use of technology significantly reduces the risks associated with excess
inventory, resulting in a more efficient and streamlined supply chain for all parties involved.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Description
of Property </I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><U>Properties
We Lease</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
currently lease additional spaces as indicated below:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT>&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1.5pt solid; vertical-align: bottom; padding-left: 10pt; text-indent: -10pt; text-align: left; font-weight: bold">Lessor/Rental Cost per month</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; vertical-align: bottom; text-align: center; font-weight: bold">Lessee</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; font-weight: bold; border-bottom: Black 1.5pt solid">Location</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-weight: bold; border-bottom: Black 1.5pt solid">Area (Square Meter)</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-weight: bold; border-bottom: Black 1.5pt solid">Annual Rent</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Term</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Use</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; padding-left: 10pt; text-indent: -10pt; width: 20%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Hainan Ousheng Investment Co., Ltd<FONT STYLE="font-size: 10pt">*</FONT></FONT></TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 9%; text-align: left">Jin Xuan Luxury Tourism</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 30%; text-align: left">No. 270 Binhai Avenue, Langqinwan International Hot Spring Resort Complex, 3rd Floor, Room 302, Haikou, Hainan Provin</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">0</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">0</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 12%; text-align: left">August 20, 2020 to Parties decide to terminate</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="text-align: center; width: 7%">Office</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 10pt; text-indent: -10pt; text-align: left">Lin Yongxue*</TD><TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: left">Jin Xuan Luxury Tourism</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">Room 1201, Floor 12, Building A, Lingao Creative Industrial Park Phase III, Xiqing District, Tianjin</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/A</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">$14,435 (RMB99,996)</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">January 4, 2021 to June 30, 2023</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Office</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; padding-left: 10pt; text-indent: -10pt; text-align: left">Li Jinping</TD><TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: left">Jin Xuan Luxury Tourism</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">Building 5, Entrance 1, Room 101, Baofu 9th Courtyard Project, Intersection of Weijin South Road and Suijiang Road, Xiqing District, Tianjin</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">June 29, 2022 to June 30 2024</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Office</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 10pt; text-indent: -10pt; text-align: left">Lu Liyou*</TD><TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: left">Jin Xuan Luxury Tourism</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">608, Block A, Jingji Riverside Times, Binhe Avenue, Futian District, Shenzhen</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">238</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">$59,077 (RMB384,000)</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">June 8, 2021 to June 7, 2023</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Office</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-left: 10pt; text-indent: -10pt; vertical-align: top">Sun Lei</TD><TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: left">Heyang Travel</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">E-33, Low-rise Residential European Style, A09-2C Area, Clear Water Bay Tourism Resort, Yingzhou Town, Lingshui County, Hainan Province</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">Feb 1, 2023 to Jan 31, 2026</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Office</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="vertical-align: top; padding-left: 10pt; text-indent: -10pt; text-align: left">Li Yilong</TD><TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: left">Heyang Travel</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">E-33, Low-rise Residential European</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">Jan 1, 2022 to Dec 31, 2024</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Office</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; padding-left: 10pt; text-indent: -10pt; text-align: left">Li Jinping</TD><TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: left">Heyang Travel</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">Building 5, Entrance 1, Room 102, Baofu 9th Courtyard Project, Intersection of Weijin South Road and Suijiang Road, Xiqing District, Tianjin</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">May 30, 2022 to May 29, 2024</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Office</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD>
    <TD STYLE="text-align: justify; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Hainan Ousheng Investment
Co., Ltd <FONT STYLE="font-size: 10pt">,Lin Yongxue and Lu Liyou are not a related party to the Company.</FONT></FONT></TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Business
Employees</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of the date of this Annual Report, the Company, its subsidiaries and PRC operating
entities have a total of 170 employees, including 55 full time employees and 115 part time employees, and have no independent contractors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe our employees&rsquo; compensation packages are competitive and we have created a merit-based work environment that encourages
initiative. As a result, we have generally been able to attract and retain qualified personnel and maintain a stable core management
team.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
required by regulations in China, we participate in various employee social security plans that are organized by local governments,
including pension, unemployment insurance, childbirth insurance, work-related injury insurance, medical insurance and housing
insurance. Pursuant to PRC regulations, we are required to contribute specific percentage of salaries, bonuses, and allowances (up
to a maximum amount, specified by local governmental regulations) to the employee benefit plan. As of the date of this Annual
Report, we have made adequate social insurance and housing fund contributions for all employees as required by PRC
regulations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
enter into standard labor agreements with our full-time employees with standard confidentiality and non-compete provisions. We believe
that we maintain a good working relationship with our employees, and we have not experienced any major labor disputes, which may have,
or have had in the recent past, material adverse effects on our financial position or profitability.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Intellectual
Property</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
business is dependent on a combination of trademarks, domain names, trade names, trade secrets and other proprietary rights in order
to protect our intellectual property rights. Upon acquisition of Flower Crown, we have applied for several trademarks, all of which are
pending approval by the Trademark Office of China National Intellectual Property Administration (&ldquo;Trademark Office&rdquo;). Set
forth below is a detailed description of our trademarks:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="text-align: center; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR>
    <TD STYLE="border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid; width: 10%; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Country</B></FONT></TD>
    <TD STYLE="border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid; width: 18%; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Trademark</B></FONT></TD>
    <TD STYLE="border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid; width: 10%; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Trademark No.</B></FONT></TD>
    <TD STYLE="border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid; width: 11%; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Trademark Name</B></FONT></TD>
    <TD STYLE="border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid; width: 10%; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Trademark Application Date</B></FONT></TD>
    <TD STYLE="border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid; width: 10%; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Trademark Classes</B></FONT></TD>
    <TD STYLE="border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid; width: 11%; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Trademark Owner</B></FONT></TD>
    <TD STYLE="border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid; width: 10%; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Trademark Term</B></FONT></TD>
    <TD STYLE="border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid; width: 10%; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Trademark Status</B></FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">China</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_002.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">51872718</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Bu Fan Xing Jing</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">12/04/2020</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">35</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Beijing Heyang</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">China</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_003.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">50933195</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">11/03/2020</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">35</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Flower Crown (Hainan) </FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">China</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_004.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">50941310</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Quanqiu Yixianghui</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">11/03/2020</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">35</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Flower Crown (Hainan)</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">China</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_005.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">49572627</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Pinlv</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/08/2020</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">41</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">China</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_005.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">49572624</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Pinlv</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/08/2020</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">43</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">China</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_006.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">49567840</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/08/2020</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">35</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">China</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_007.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">49580237</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">LUXVENTFURE</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/08/2020</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">43</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">China</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_006.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">49563070</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/08/2020</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">41</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">China</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_007.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">49592112</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">LUXVENTFURE</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/08/2020</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">41</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">China</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_006.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">49563061</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/08/2020</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">43</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
</TABLE>

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<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center; width: 10%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Country</B></FONT></TD>
    <TD STYLE="border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center; width: 18%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Trademark</B></FONT></TD>
    <TD STYLE="border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center; width: 10%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Trademark No.</B></FONT></TD>
    <TD STYLE="border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center; width: 11%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Trademark Name</B></FONT></TD>
    <TD STYLE="border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center; width: 10%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Trademark Application Date</B></FONT></TD>
    <TD STYLE="border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center; width: 10%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Trademark Classes</B></FONT></TD>
    <TD STYLE="border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center; width: 11%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Trademark Owner</B></FONT></TD>
    <TD STYLE="border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center; width: 10%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Trademark Term</B></FONT></TD>
    <TD STYLE="border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center; width: 10%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Trademark Status</B></FONT></TD></TR>

<TR>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">China</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_007.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">49563090</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">LUXVENTFURE</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/08/2020</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">35</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">China</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_005.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">49572631</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Pinlv</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/08/2020</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">39</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">China</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_005.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">49583228</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Pinlv</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/08/2020</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">35</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">China</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_006.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">49593405</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/08/2020</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">39</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">China</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_007.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">49580225</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">LUXVENTURE</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/08/2020</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">39</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>

<TR>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Hong Kong</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_006.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">305384304</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/08/2020</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Hong Kong</FONT></TD>
    <TD STYLE="padding-top: 5.4pt; text-align: center"><IMG SRC="image_005.jpg" ALT=""></TD>
    <TD STYLE="padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">305384313</FONT></TD>
    <TD STYLE="padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Pinlv</FONT></TD>
    <TD STYLE="padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/08/2020</FONT></TD>
    <TD STYLE="padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-top: black 1.5pt solid; border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Hong Kong</FONT></TD>
    <TD STYLE="border-top: black 1.5pt solid; border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_007.jpg" ALT=""></TD>
    <TD STYLE="border-top: black 1.5pt solid; border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">305384322</FONT></TD>
    <TD STYLE="border-top: black 1.5pt solid; border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">LUXVENTURE</FONT></TD>
    <TD STYLE="border-top: black 1.5pt solid; border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/08/2020</FONT></TD>
    <TD STYLE="border-top: black 1.5pt solid; border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-top: black 1.5pt solid; border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-top: black 1.5pt solid; border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-top: black 1.5pt solid; border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Macao</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_007.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/173434(304)</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/18/2020</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Macao</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_005.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/173435(975)</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/18/2020</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Macao</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_005.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/173436(747)</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/18/2020</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Macao</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_006.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/173437(132)</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/18/2020</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Macao</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_007.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/173438(333)</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/18/2020</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Macao</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_005.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/173439(206)</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/18/2020</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>

<TR>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Macao</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_007.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/173440(834)</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/18/2020</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
<TR>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Macao</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_007.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/173441(540)</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/18/2020</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
<TR>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Macao</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_005.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/173442(418)</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/18/2020</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
</TABLE>

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<P STYLE="margin: 0"></P>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center; width: 10%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Country</B></FONT></TD>
    <TD STYLE="border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center; width: 18%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Trademark</B></FONT></TD>
    <TD STYLE="border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center; width: 10%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Trademark No.</B></FONT></TD>
    <TD STYLE="border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center; width: 11%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Trademark Name</B></FONT></TD>
    <TD STYLE="border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center; width: 10%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Trademark Application Date</B></FONT></TD>
    <TD STYLE="border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center; width: 10%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Trademark Classes</B></FONT></TD>
    <TD STYLE="border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center; width: 11%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Trademark Owner</B></FONT></TD>
    <TD STYLE="border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center; width: 10%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Trademark Term</B></FONT></TD>
    <TD STYLE="border-top: Black 1.5pt solid; border-bottom: Black 1.5pt solid; padding-top: 5.4pt; text-align: center; width: 10%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Trademark Status</B></FONT></TD></TR>


<TR>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Macao</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_005.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/173443(343)</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/18/2020</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
<TR>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Macao</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_006.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/173444(867)</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/18/2020</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>

<TR>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Macao</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_007.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">N/173445(578)</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/18/2020</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Taiwan</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_005.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">109063176</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Pinlv</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/10/2020</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">35</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Taiwan</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_005.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">109063175</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Pinlv</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/10/2020</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">39</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Taiwan</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_005.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">109063173</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Pinlv</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/10/2020</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">43</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>

<TR>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Taiwan</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_007.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">109063186</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">LUXVENTURE</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/10/2020</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">41</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Taiwan</FONT></TD>
    <TD STYLE="padding-top: 5.4pt; text-align: center"><IMG SRC="image_006.jpg" ALT=""></TD>
    <TD STYLE="padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">109063178</FONT></TD>
    <TD STYLE="padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/10/2020</FONT></TD>
    <TD STYLE="padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">41</FONT></TD>
    <TD STYLE="padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-top: black 1.5pt solid; border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Taiwan</FONT></TD>
    <TD STYLE="border-top: black 1.5pt solid; border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_006.jpg" ALT=""></TD>
    <TD STYLE="border-top: black 1.5pt solid; border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">109063177</FONT></TD>
    <TD STYLE="border-top: black 1.5pt solid; border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-top: black 1.5pt solid; border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/10/2020</FONT></TD>
    <TD STYLE="border-top: black 1.5pt solid; border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">43</FONT></TD>
    <TD STYLE="border-top: black 1.5pt solid; border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-top: black 1.5pt solid; border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-top: black 1.5pt solid; border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Taiwan</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_006.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">109063183</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/10/2020</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">39</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Taiwan</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_006.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">109063184</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/10/2020</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">35</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Taiwan</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_007.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">109063187</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">LUXVENTURE</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/10/2020</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">39</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Taiwan</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_007.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">109063188</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">LUXVENTURE</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/10/2020</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">35</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Taiwan</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_005.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">109063174</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Pinlv</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/10/2020</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">41</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  <TR>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Taiwan</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><IMG SRC="image_007.jpg" ALT=""></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">109063185</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">LUXVENTURE</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">09/10/2020</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">43</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Jinxuan Luxury Tourism</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; padding-top: 5.4pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Insurance</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
do not have any business liability, interruption or litigation insurance coverage for our operations in China. Insurance companies
in China offer limited business insurance products. While business interruption insurance is available to a limited extent in China,
we have determined that the risks of interruption, cost of such insurance and the difficulties associated with acquiring such
insurance on commercially reasonable terms make it impractical for us to have such insurance. Therefore, we are subject to business
and product liability exposure. See &ldquo;Risk Factors&mdash;Risks Related to Our Business&mdash;We have limited insurance coverage
in China and may not be able to recover insurance proceeds if we experience uninsured losses.&rdquo;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Impact
of the COVID-19 pandemic </I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The impact of the COVID-19 pandemic on the Company&rsquo;s business
has been severe, widespread and continues to evolve. The recent COVID-19 pandemic adversely affected many businesses in China. China implemented
nationwide efforts to contain the spread of the novel coronavirus, particularly. during 2021 and 2022, when the most severe additional
lockdowns were implemented, including lockdowns in Hainan Island. These lockdowns had a significant impact on our operations, particularly
on Hainan Island, where we are based. As a result of the lockdown on Hainan Island, Chinese customs were closed, preventing the sanitization
and inspection of imported products for potential COVID-19 contamination. This effectively halted our cross-border operations. The global
spread of COVID-19 also affected our sales. This growth in revenue, especially revenues from our tourism business, has been adversely
impacted by COVID-19 pandemic at various times during 2021 because of government-enforced lockdowns.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase"><B><I>Regulation</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
section sets forth a summary of the most significant rules and regulations that affect our business activities in the PRC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>REGULATIONS
RELATING TO FOREIGN INVESTMENT</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
establishment, operation and management of companies in China are mainly governed by the PRC Company Law, as most recently amended in
2018, which applies to both domestic companies and foreign-invested companies. Prior to January 1, 2020, the fundamental laws governing
the foreign-invested enterprises were the Sino-foreign Equity Joint Venture Enterprise Law of the PRC, the Sino-foreign Cooperative Joint
Venture Enterprise Law of the PRC, and the Wholly Foreign-invested Enterprise Law of the PRC, together with their implementation rules
and regulations. On March 15, 2019, the National People&rsquo;s Congress of the PRC approved the Foreign Investment Law of the PRC (the
&ldquo;Foreign Investment Law&rdquo;), which came into effect on January 1, 2020 and replaced the Sino-foreign Equity Joint Venture Enterprise
Law of the PRC, the Sino-foreign Cooperative Joint Venture Enterprise Law of the PRC and the Wholly Foreign-invested Enterprise Law of
the PRC. Pursuant to the Foreign Investment Law, &ldquo;foreign investment&rdquo; refers to investment activities conducted by foreign
investors (including foreign natural persons, foreign enterprises or other foreign organizations) directly or indirectly in the PRC,
which include any of the following circumstances: (i) foreign investors setting up foreign-invested enterprises in the PRC solely or
jointly with other investors, (ii) foreign investors obtaining shares, equity interests, property portions or other similar rights and
interests of enterprises within the PRC, (iii) foreign investors investing in new projects in the PRC solely or jointly with other investors,
and (&#8563;) investment in other methods as specified in laws, administrative regulations, or as stipulated by the State Council.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 26, 2019, the State Council promulgated the Implementing Regulations of the Foreign Investment Law of the PRC (the &ldquo;Implementing
Rules&rdquo;), with effect from January 1, 2020 to ensure the effective implementation of the Foreign Investment Law. The Implementing
Rules provide that foreign-invested enterprises that invest in the PRC shall be governed by the Foreign Investment Law and the Implementing
Rules.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Foreign Investment Law and the Implementing Rules stipulate that the PRC implements a system of pre-entry national treatment plus negative
list for the administration of foreign investment. &ldquo;Pre-entry national treatment&rdquo; means the treatment given to foreign investors
and their investment at the market accessing stage being not less favorable than that given to domestic investors and their investment.
&ldquo;Negative list&rdquo; means the special administrative measures stipulated by the State for foreign investment&rsquo;s access to
specific areas. Foreign investors shall not invest in any area where foreign investment is prohibited as set out in the negative list;
foreign investors shall meet the conditions prescribed in the negative list before investing in any area where foreign investment is
restricted. Thus, the PRC grants national treatment to foreign investment outside the negative list. The currently effective negative
list is published by the National Development and Reform Commission and the Ministry of Commerce on December 27, 2021, which became effective
on January 1, 2022 (the &ldquo;2021 Negative List&rdquo;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Except
for the regulations on market entry, the Foreign Investment Law and the Implementing Rules undertake to protect the investment, incomes
and other legitimate rights and interests of foreign investors in China. The Foreign Investment Law and the Implementing Rules allow
foreign investors&rsquo; profits, capital gains, intellectual property royalties and other gains to be freely remitted outward in accordance
with the law. It also contains provisions aiming to promote foreign investment, including that the State&rsquo;s policies supporting
enterprise development are equally applicable to foreign-invested enterprises in accordance with the law.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
terms of foreign-invested enterprises established according to the Sino-foreign Equity Joint Venture Enterprise Law of the PRC, the Sino-foreign
Cooperative Joint Venture Enterprise Law of the PRC or the Wholly Foreign-invested Enterprise Law of the PRC before the implementation
of the Foreign Investment Law, the Foreign Investment Law provides that they may maintain their original organization forms within five
years after the implementation of the Foreign Investment Law.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the Foreign Investment Law and the Implementing Rules, and the Information Reporting Measures for Foreign Investment jointly promulgated
by the Ministry of Commerce and the State Administration for Market Regulation, which took effect on January 1, 2020, a foreign investment
information reporting system shall be established and foreign investors or foreign-invested enterprises shall report investment information
to competent commerce departments of the government through the enterprise registration system and the enterprise credit information
publicity system, and the administration for market regulation shall forward the above investment information to the competent commerce
departments in a timely manner. In addition, the Ministry of Commerce shall set up a foreign investment information reporting system
to receive and handle the investment information and inter-departmentally shared information forwarded by the administration for market
regulation in a timely manner. The foreign investors or foreign-invested enterprises shall report the investment information by submitting
reports including initial reports, change reports, deregistration reports and annual reports.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>REGULATIONS
RELATING TO OVERSEAS LISTING</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 8, 2006, six PRC regulatory agencies, including the China Securities Regulatory Commission (the &ldquo;CSRC&rdquo;), promulgated
the Rules on the Merger and Acquisition of Domestic Enterprises by Foreign Investors (the &ldquo;M&amp;A Rules&rdquo;), which took effect
on September 6, 2006 and was amended on June 22, 2009. The M&amp;A Rules, among other things, requires offshore special purpose vehicles
formed for overseas listing purposes through acquisitions of PRC domestic companies and controlled by PRC domestic enterprises or individuals
to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle&rsquo;s securities on an overseas
stock exchange. In September 2006, the CSRC published on its official website procedures regarding its approval of overseas listings
by special purpose vehicles.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
July 6, 2021, the State Council and General Office of the CPC Central Committee issued Opinions on Strictly Cracking Down Illegal Securities
Activities in Accordance with the Law. The opinions emphasize 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.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 17, 2023, the CSRC promulgated the Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic
companies (the &ldquo;Overseas Listing Trial Measures&rdquo;) and relevant five guidelines, which will become effective on March 31,
2023. The Overseas Listing Trial Measures will comprehensively improve and reform the existing regulatory regime for overseas securities
offering and listing of PRC domestic companies by adopting a filing-based regulatory regime. According to the Overseas Listing Trial
Measures, PRC domestic companies that seek to offer and list securities in overseas markets, either directly or indirectly, are required
to fulfill the filing procedure with the CSRC and report relevant information.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Overseas Listing Trial Measures provide that
if the issuer meets both of the following criteria, the overseas securities offering and listing conducted by such issuer will be deemed
as an indirect overseas offering and listing by PRC domestic companies: (i) more than 50% of any of the issuer&rsquo;s operating revenue,
total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent fiscal year
is accounted for by domestic companies; and (ii) the main parts of the issuer&rsquo;s business activities are conducted in mainland China,
or its main place(s) of business are located in mainland China, or the majority of senior management staff in charge of its business
operations and management are PRC citizens or have their usual place(s) of residence located in mainland China. Where an issuer submits
an application for initial public offering to competent overseas regulators, such issuer must file with the CSRC within three business
days after such application is submitted. The Overseas Listing Trial Measures also requires subsequent reports to be filed with the CSRC
on material events, such as change of control, having been investigated or penalized by overseas securities regulatory authorities or
other competent authorities, converting the listing status or listing board, or voluntary or forced delisting of the issuer(s) which
have completed overseas offerings and listings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, the Overseas Listing Trial Measures
provide that an overseas listing or offering is explicitly prohibited under any of the following circumstances: (i) such securities offering
and listing is explicitly prohibited by provisions in laws, administrative regulations and relevant state rules; (ii) 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; (iii) the domestic company intending to make the securities offering and listing, or its controlling shareholder(s) and the
actual controller, have committed relevant crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining
the order of the socialist market economy during the latest three years; (iv) the domestic company intending to make the securities offering
and listing is currently under investigations for suspicion of criminal offenses or major violations of laws and regulations, and no
conclusion has yet been made thereof; or (v) there are material ownership disputes over equity held by the domestic company&rsquo;s controlling
shareholder(s) or by other shareholder(s) that are controlled by the controlling shareholder(s) and/or actual controller.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">At a press conference held for these new regulations,
officials from the CSRC clarified that the domestic companies that have already been listed overseas before the effective date of the
Overseas Listing Trial Measures (i.e. March 31, 2023) shall be deemed as existing issuers, or the Existing Issuers. Existing Issuers
are not required to complete the filling procedures immediately, and they shall be required to file with the CSRC when subsequent matters
such as refinancing are involved. Furthermore, according to the officials from the CSRC, domestic companies that have obtained approval
from overseas regulatory authorities or securities exchanges (for example, a contemplated offering and/or listing on the U.S. stock exchange
has been declared effective) for their indirect overseas offering and listing prior to the effective date of the Overseas Listing Trial
Measures (i.e. March 31, 2023) but have not yet completed their indirect overseas issuance and listing, are granted a six-month transition
period from March 31, 2023. Those who complete their overseas offering and listing within such six months are deemed as Existing Issuers.
Within such six-month transition period, however, if such domestic companies need to reapply for offering and listing procedures to the
overseas regulatory authority or securities exchanges, or if they fail to complete their indirect overseas issuance and listing, such
domestic companies shall complete the filling procedures with the CSRC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the Overseas Listing Trail Measures,
where a PRC domestic company fails to fulfill filing procedure in respect of its overseas offering and listing, the CSRC may order rectification,
issue warnings to such PRC domestic company, and impose a fine ranging from RMB1,000,000 to RMB10,000,000. Also the directly responsible
person-in-charge and other directly responsible persons of such PRC domestic company may be warned and imposed a fine up to RMB 5,000,000,
and the controlling shareholders and the actual controllers of such PRC domestic company that organize or instruct the aforementioned
violations shall be imposed a fine up to RMB10,000,000. Further, if the PRC domestic company that is not an Existing Issuer fails to
fulfill the required filing procedure, such an issuer may ultimately be forced to delist its securities that have already been listed.
In addition, since the Overseas Listing Trial Measures and relevant guidelines were newly promulgated, their interpretation, application
and enforcement remain unclear. Any failure of us to fully comply with the Overseas Listing Trail Measures may significantly limit or
completely hinder our ability to offer or continue to offer our securities, hinder our ability to remain listed on Nasdaq or any other
U.S. securities exchange, cause significant disruption to our business operations, and severely damage our reputation, which would materially
and adversely affect our financial condition and results of operations and cause shares of our Common Stock to significantly decline
in value or become worthless.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 24, 2023, the CSRC, the Ministry
of Finance, the National Administration of State Secrets Protection and the National Archives Administration jointly issued the
Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic
Companies, or the Confidentiality and Archives Provisions, which will take effective from March 31,2023. The Confidentiality and
Archives Provisions specify that during the overseas issuance of securities and listing activities of domestic enterprises, domestic
enterprises and securities companies and securities service institutions that provide relevant securities services shall, by
strictly abiding by the relevant laws and regulations of the PRC and the requirements therein, establish sound confidentiality and
archives management systems, take necessary measures to implement confidentiality and archives management responsibilities, and
shall not leak national secrets, work secrets of governmental agencies and undermine national and public interests. Work manuscripts
generated in the PRC by securities companies and securities service institutions that provide relevant securities services for
overseas issuance and listing of securities by domestic enterprises shall be kept in the PRC. Without the approval of relevant
competent authorities, it shall not be transferred overseas. Where archives or copies need to be transferred outside of the PRC, it
shall be subject to the approval procedures in accordance with relevant PRC regulations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>REGULATIONS RELATING TO CYBERSECURITY AND
DATA SECURITY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the Cybersecurity Law of the PRC
(the &ldquo;Cybersecurity Law&rdquo;) which was promulgated by the Standing Committee of the National People&rsquo;s Congress of the
PRC (the&nbsp;&ldquo;SCNPC&rdquo;) on November 7, 2016 and came into effect on June 1, 2017, network operators shall take all necessary
measures in accordance with applicable laws, regulations and compulsory national requirements to safeguard the safe and stable operation
of networks, respond to cybersecurity incidents effectively, prevent illegal and criminal activities, and maintain the integrity, confidentiality
and usability of network data. The Cybersecurity Law also stipulates that the China adopts classified system for cybersecurity protection,
under which network operators are required to fulfil relevant obligations of security protection to ensure that the network is free from
interference, disruption or unauthorized access, and to prevent network data from being disclosed, stolen or tampered.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On September 22, 2020, the Ministry of Public
Security issued the Guiding Opinions on Implementing the Cyber Security Protection System and Critical Information Infrastructure Security
Protection System to further improve the national cyber security prevention and control system. On December 28, 2021, the Cyberspace
Administration of China (the&nbsp;<B>&ldquo;CAC&rdquo;</B>) and several other government authorities published the Revised Cybersecurity
Review Measures, which came into effect on February 15, 2022 and replaced the previous version. Pursuant to these measures, the purchase
of network products and services by a critical information infrastructure operator or the data processing activities of a network platform
operator that affect or may affect national security will be subject to a cybersecurity review. In addition, network platform operators
with personal information of over one million users shall be subject to cybersecurity review before listing in foreign countries. The
competent governmental authorities may also initiate a cybersecurity review against the operators if the authorities believe that the
network product or service or data processing activities of such operators affect or may affect national security. Article 10 of the
Revised Cybersecurity Review Measures also sets out certain general factors which would be the focus in assessing the national security
risk during a cybersecurity review, including (i) risks of critical information infrastructure being illegally controlled or subject
to interference or destruction; (ii) the harm caused by the disruption of the supply of the product or service to the business continuity
of critical information infrastructure; (iii) the security, openness, transparency and diversity of sources of the product or service,
the reliability of supply channels, and risks of supply disruption due to political, diplomatic, trade and other factors; (iv) compliance
with PRC laws, administrative regulations and departmental rules by the provider of the product or service; (v) the risk of core data,
important data or a large amount of personal information being stolen, leaked, damaged, illegally used, or illegally transmitted overseas;
(vi) the risk that critical information infrastructure, core data, important data or a large amount of personal information being affected,
controlled, and maliciously used by foreign governments for a listing, as well as network information security risks; and (vii) other
factors that may endanger the security of critical information infrastructure, cybersecurity and data security.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On July 30, 2021, the State Council promulgated
the Regulations on Security Protection of Critical Information Infrastructures, which took effect on September 1, 2021 and provide that
&ldquo;critical information infrastructures&rdquo; refer to any important network facilities or information systems of important industries
or fields such as public communication and information service, energy, communications, water conservation, finance, public services,
e-government affairs and national defense science, and any other important network facilities or information systems which may endanger
national security, people&rsquo;s livelihood and public interest in case of damage, function loss or data leakage. In addition, relevant
administration departments of each critical industry and sector, or Protection Departments, shall be responsible to formulate eligibility
criteria and determine the critical information infrastructure operator in the respective industry or field. The operators shall be informed
about the final determination as to whether they are categorized as critical information infrastructure operators. The regulations further
require critical information infrastructures operators, among others, (i) to report to the competent Protection Departments in a timely
manner when the identification result may be affected due to material changes in the critical information infrastructures; (ii) to plan,
construct or put into use the security protection measures and the critical information infrastructures simultaneously; and (iii) to
report to the competent Protection Departments in a timely manner in the event of merger division or dissolution, and deal with critical
information infrastructures as required by the competent Protection Departments. Operators in violation of the regulations may be ordered
to rectify, subject to warnings, fines and other administrative penalties or even criminal liabilities, and the directly responsible
personnel in charge may also be imposed on fines or other liabilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 10, 2021, the SCNPC promulgated the Data
Security Law of the PRC (the &ldquo;<B>Data Security Law</B>&rdquo;), with effect from September 1, 2021. The Data Security Law establishes
a data classification and hierarchical protection system depending on the importance of the data in economic and social development,
and the damage caused to national security, public interests, or the legitimate rights and interests of individuals and organizations
if the data is falsified, damaged, disclosed, illegally obtained or illegally used. Under the Data Security Law, critical information
infrastructure operators shall be subject to the Cybersecurity Law in connection with the cross-border transfer of important data collected
and generated through their operations in China; and the cross-border transfer of important data collected and generated by other data
processors shall be subject to the administrative measures adopted by the CAC in conjunction with other competent departments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On July 7, 2022, the CAC promulgated the Security
Assessment Measures for Cross-border Data Transfers with effect from September 1, 2022, a data processor shall declare security assessment
for its outbound data transfer if: (i)where a data processor provides critical data abroad;(ii) where a critical information infrastructure
operator or a data processor processing the personal information of more than one million individuals provides personal information abroad;
(iii) where a data processor has provided personal information of 100,000 individuals or sensitive personal information of 10,000 individuals
in total abroad since January 1 of the previous year; and (iv) any other circumstances prescribed by the CAC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On November 14, 2021, the CAC released the Regulations
for the Administration of Network Data Security (Draft for Comments) (the &ldquo;<B>Draft Network Data Security Regulations</B>&rdquo;).
The Draft Internet Data Security Regulations cover a wide range of internet data security issues, including the supervision and management
of data security in the PRC, and apply to situations using networks to carry out data processing activities. The Draft Network Data Security
Regulations set out general guidelines covering subjects including protection of personal information, security of important data, security
management of cross-border data transmission, obligations of internet platform operators, supervision and management, and legal liabilities
of internet data security. The Draft Network Data Security Regulations also require a data processor to apply to the CAC for cybersecurity
review if it process the personal information of more than one million individuals and goes listing in foreign countries. As of the date
of this Annual Report, the Draft Network Data Security Regulations were released for public comment only, and the provisions and anticipated
adoption or effective date may be subject to change with substantial uncertainty.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>REGULATIONS RELATING TO PRIVACY PROTECTION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Civil Code of the PRC, issued by the National
People&rsquo;s Congress of the PRC on May 28, 2020 and effective from January 1, 2021, provides legal basis for privacy and personal
information infringement claims under the Chinese civil laws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Criminal Law of the PRC, as amended on December
26, 2020, prohibits institutions, companies and their employees from selling or otherwise illegally disclosing a citizen&rsquo;s personal
information obtained in performing duties or providing services or obtaining such information through theft or other illegal ways.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the Personal Information Protection
Law of the PRC which was promulgated by the SCNPC on August 20, 2021 and came into effect on November 1, 2021, personal information shall
be handled in accordance with the principles of lawfulness, legitimacy, necessity and good faith, and it is not allowed to handle personal
information by misleading, fraud, coercion or otherwise. It creates a range of compliance obligations and sets forth specific requirements
on protection of electronic and non-electronic information which is related to identified or identifiable natural persons.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the Law of the PRC on the Protection
of Minors (2020 Revision), which was promulgated by the SCNPC on October 17, 2020 and came into effect on June 1, 2021, information processors
shall obtain consent from minors&rsquo; parents or other guardians when processing personal information of minors under the age of 14
via the internet. In addition, information processors must promptly take measures to correct or delete the personal information of minors
if alerted by the minors, parents or other guardians.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>REGULATIONS ON LAND OR PROPERTY USE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In June 1986, the SCNPC promulgated the Land
Administration Law of the PRC, which was last amended on August 26, 2019 and became effective on January 1, 2020. In January 1991, the
State Council published Regulations for Implementation of the Land Administration Law of the PRC which was last amended on July 2, 2021
and came into effect on September 1, 2021. According to the Land Administration Law and its regulations, enterprises and individuals
shall use land strictly in accordance with the purpose stipulated in the land use master plan. Construction entities shall use state-owned
land according to the stipulations of the land use right assignment contract or according to the provisions of the approval documents
relevant to the allocation of land use rights. The conversion of the construction purposes of the land shall receive the consent of the
competent land administrative authority and be submitted to the people&rsquo;s governments that originally granted land use approval.
When changing the purpose of land within urban planning areas, consent shall be obtained from the relevant urban planning administration
department before submission; without such approvals, the use of land specified in the relevant overall land utilization plan shall not
be changed. Under these regulations, failure to comply with the approved usage may subject to fines or other penalties, including potentially
being required by the relevant land administrative authority to return the land.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>REGULATIONS RELATING TO LEASING</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the Law on Administration of Urban
Real Estate of the PRC which took effect in January 1, 1995 with the latest amendment in August 26, 2019, lessors and lessees are required
to enter into a written lease contract, containing such provisions as the term of the lease, the use of the premises, liability for rent
and repair, and other rights and obligations of both parties. Pursuant to Administrative Measures on Leasing of Commodity Housing which
were promulgated by the Ministry of Housing and Urban-Rural Development on December 1, 2010 and came into effect on February 1, 2011,
the lessor and the lessee shall complete property leasing registration and filing formalities within 30 days from execution of the property
lease contract with competent authority, otherwise individuals or organizations who violate the provision shall be ordered to make correction
within a stipulated period. Where the individual or organization failed to make correction within the stipulated period, a fine shall
be imposed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>REGULATIONS RELATING TO INTELLECTUAL PROPERTY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Regulations on Copyright</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the Copyright Law of the PRC (the
&ldquo;Copyright Law&rdquo;), which was promulgated by the SCNPC and last amended on November 11, 2020 with effect from June 1, 2021,
creators of protected works enjoy personal and property rights with respect to publication, authorship, alteration, integrity, reproduction,
distribution, lease, exhibition, performance, projection, broadcasting, dissemination via information network, production, adaptation,
translation, compilation and related activities. Under the Copyright Law, the term of protection for copyrighted software is 50 years.
The Regulations on the Protection of the Right to Communicate Works to the Public over Information Networks, as most recently amended
on January 30, 2013, provide specific rules on fair use, statutory license, and a safe harbor for use of copyrights and copyright management
technology and specify the liabilities of various entities for violations, including copyright holders, libraries and internet service
providers. The Computer Software Copyright Registration Measures, promulgated by the National Copyright Administration on February 20,
2002, regulate registrations of software copyrights, exclusive licensing contracts for software copyrights and assignment agreements.
The National Copyright Administration administers software copyright registration and the Copyright Protection Center of China are designated
as the software registration authority. The Copyright Protection Center of China grants registration certificates to the computer software
copyrights applicants which meet the relevant requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Regulations on Trademark</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the Trademark Law of the PRC, which
was promulgated by the SCNPC and last amended on April 23, 2019 with effect from November 1, 2019, registered trademarks refer to trademarks
that have been approved and registered by the Trademark Office of China National Intellectual Property Administration. Trademark registrants
enjoy an exclusive right to use the trademark, which shall be protected by law. The initial effective term of a registered trademark
is ten years and will be granted another ten-year effective term upon request after expiration of the first or any renewed ten-year term.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As with patents, the Trademark Law has adopted
a first-to-file principle with respect to trademark registration. If a trademark applied for is identical or similar to another trademark
which has already been registered or subject to a preliminary examination and approval for use on the same or similar kinds of products
or services, such trademark application may be rejected. Any person applying for the registration of a trademark may not injure existing
trademark rights first obtained by others, nor may any person register in advance a trademark that has already been used by another party
and has already gained a &ldquo;sufficient degree of reputation&rdquo; through such party&rsquo;s use.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Regulations on Patent</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the Patent Law of the PRC, which
was promulgated by the SCNPC and last amended on October 17, 2020 with effect from June 1, 2021, after the grant of the patent right
for an invention, utility model, or design, unless otherwise provided thereunder, no entity or individual may, without the authorization
of the patent owner, infringe the patent. A patent is valid for a twenty-year term in the case of an invention, a fifteen-year term in
the case of a design, and a ten-year term in the case of a utility model, starting from the application date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Regulations on Domain Name</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the Administrative Measures for Internet
Domain Names, which were promulgated by the MIIT on August 24, 2017 with effect from November 1, 2017, the registration of domain names
adopts the &ldquo;first to file, first to register&rdquo; principle and the registrant shall complete the registration via the domain
name registration service institutions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>REGULATIONS RELATING TO LABOR PROTECTION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the Labor Law of the PRC, which was
promulgated by the SCNPC on July 5, 1994 and most recently amended on December 29, 2018, an employer shall establish a comprehensive
management system to safeguard the rights of its employees, including developing and improving its labor safety and health system, stringently
implementing national protocols and standards on labor safety and health, conducting labor safety and health education for workers, guarding
against labor accidents and reducing occupational hazards. An employer must provide employees with the necessary labor protection equipment
that comply with labor safety and health conditions stipulated under national regulations, as well as provide regular check-ups for workers
that engage in operations with occupational hazards.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Labor Contract Law of the PRC, which was
promulgated by the SCNPC on June 29, 2007 and became effective on January 1, 2008, and was amended on December 28, 2012, and the Implementation
Regulations on Labor Contract Law of the PRC, which were promulgated and became effective on September 18, 2008, regulate employer and
employee relations and contain specific provisions on the terms of the labor contract. Labor contracts must be made in writing. An employer
may legally terminate a labor contract and dismiss its employees after reaching agreement upon due negotiations with the employee or
by fulfilling the statutory conditions. Employers in most cases are also required to provide severance payment to their employees after
their employment relationships are terminated. In addition, if an employer intends to enforce a non-compete provision in an employment
contract or non-competition agreement with an employee, it has to compensate the employee on a monthly basis during the term of the restriction
period after the termination or expiry of the labor contract.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Moreover, all PRC enterprises are generally required
to implement a standard working time system of eight hours a day and forty hours a week, and if the implementation of such standard working
time system is not appropriate due to the nature of the job or the characteristics of business operation, the enterprise may implement
a flexible working time system or comprehensive working time system after obtaining approvals from the relevant authorities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the Social Insurance Law of the PRC,
the Interim Regulations on the Collection and Payment of Social Insurance Premiums, the Regulations on Work Injury Insurance, the Regulations
on Unemployment Insurance, the Trial Measures on Employee Maternity Insurance of Enterprises, enterprises in China are required by PRC
laws and regulations to participate in certain employee benefit plans, including social insurance funds, namely a pension plan, a medical
insurance plan, an unemployment insurance plan, a work-related injury insurance plan and a maternity insurance plan, and contribute to
the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of the employees as specified by the
local government from time to time at locations where they operate their businesses or where they are located. According to the Social
Insurance Law, an employer that fails to make social insurance contributions may be ordered to rectify the non-compliance and pay the
required contributions within a stipulated deadline, and may be subject to a late payment fine at a daily rate of 0.05% of the outstanding
amount, accruing from the date when the social insurance contributions were due and a fine equal to one to three times the outstanding
amount.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the Regulations on the Administration
of Housing Provident Fund, which were promulgated by the State Council and last amended on March 24, 2019, employers are required to
contribute to housing provident funds for the benefit of their employees. According to the Regulations on the Administration of Housing
Provident Fund, an enterprise that fails to make housing fund contributions may be ordered to rectify the noncompliance and pay the required
contributions within a stipulated deadline; if the enterprise fails to rectify the non-compliance with the stipulated deadline, it be
may be made to a local court for compulsory enforcement. In addition, an enterprise that fails to undertake contribution registration
of housing provident fund or fails to go through the formalities of opening housing provident fund accounts for its employees may be
ordered to rectify the noncompliance within a stipulated deadline, where failing to rectify the non-compliance at the expiration of the
time limit, it be may be subject to a fine ranging from RMB10,000 or RMB 50,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>REGULATIONS RELATED TO TAXATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Regulations on Income Tax</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We and our subsidiaries
may be subject to tax in the jurisdictions in which we are organized or operate, reducing the amount of our net income and cash flows,
including cash available for dividend payments. Under current Marshall Islands law, there is no income, corporate or profits tax or withholding
tax, capital gains tax or capital transfer tax, estate or inheritance tax payable by us or our stockholders, other than stockholders
ordinarily resident in the Republic of the Marshall Islands, if any. We believe that we should not be subject to tax under the laws of
various countries, other than the United States, in which our subsidiaries&rsquo; vessels conduct activities or in which our subsidiaries&rsquo;
customers are located. However, our belief is based on our understanding of the tax laws of those countries, and our tax position is
subject to review and possible challenge by taxing authorities and to possible changes in law or interpretation. We cannot determine
in advance the extent to which certain jurisdictions may require us to pay corporate income tax or to make payments in lieu of such tax.
In addition, payments due to us from our subsidiaries&rsquo; customers may be subject to tax claims. In computing our tax obligation
in these jurisdictions, we may be required to take various tax accounting and reporting positions on matters that are not entirely free
from doubt and for which we have not received rulings from the governing authorities. We cannot assure you that upon review of these
positions the applicable authorities will agree with our positions. A successful challenge by a tax authority could result in additional
tax imposed on us or our subsidiaries, further reducing the cash available for distribution. In addition, changes in our operations or
ownership could result in additional tax being imposed on us or our subsidiaries in jurisdictions in which operations are conducted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Enterprise Income Tax Law</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the Enterprise Income Tax Law of
the PRC, which was promulgated by the SCNPC and last amended on December 29, 2018, and the Implementation Rules to the Enterprise Income
Tax Law of the PRC, which were promulgated by the State Council and last amended on April 23, 2019, enterprises are classified as either
resident enterprises or non-resident enterprises. The income tax rate for resident enterprises, including both domestic-invested and
foreign-invested enterprises, shall typically be 25%. Non-resident enterprises which have not established agencies or offices in China,
or which have established agencies or offices in China but whose income has no association with such agencies or offices shall pay enterprise
income tax on its income deriving from inside China at the reduced rate of 10%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the Circular of Printing the Administrative
Measures for Recognition of High-Tech Enterprises amended by the Ministry of Science and Technology, Ministry of Finance and State Taxation
Administration on January 29, 2016 and came into effect since January 1, 2016, upon the accreditation of the qualification of High-tech
enterprises, such enterprises may apply for the entitlement of the preferential enterprise income tax treatment since the current year
beginning from the valid period approved by the accreditation. A High and New Technology Enterprise is entitled to a favorable statutory
tax rate of 15% and such enterprise should keep all statutory required relevant materials in case of future inspection. This qualification
is reassessed by relevant government authorities every three years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the Notice on the Implementation
of Inclusive Tax Concessions for Small and Micro Enterprises which took effect on January 1, 2019, jointly issued by the Ministry of
Finance and the State Taxation Administration, for the portion of annual taxable income which does not exceed RMB1,000,000, the annual
taxable income shall be deducted to 25% and the income tax shall be calculated at the rate of 20%; for the portion of annual taxable
income from RMB1,000,000 to RMB3,000,000, the taxable income shall be deducted to 50% and the income tax shall be calculated at the rate
of 20%, for the period from January 1, 2019 to December 31, 2021. The above-mentioned small and micro-enterprises refer to those enterprises
that are engaged in industries not restricted or prohibited by the state and meet certain conditions, including annual taxable income
not exceeding RMB3,000,000, number of employees not exceeding 300, and total assets not exceeding RMB50,000,000. In 2021, the Ministry
of Finance and State Taxation Administration issued the Notice on the Implementation of Preferential Income Tax for Small and Micro Enterprises
and Individual Entrepreneurs, which provides a 50% reduction in corporate income tax for small and micro enterprises with annual taxable
income not exceeding RMB1,000,000, on top of the preferential policies stipulated in the Notice on the Implementation of Inclusive Tax
Concessions for Small and Micro Enterprises, for the period from January 1, 2021 to December 31, 2022. In 2022, the Ministry of Finance
and the State Taxation Administration issued the Notice on the Further Implementation of Preferential Income Tax for Small and Micro
Enterprises, according to which the annual taxable income shall be deducted to 25% and the income tax shall be calculated at the rate
of 20% for small and micro enterprises with annual taxable income from RMB1,000,000 to RMB3,000,000, on top of the preferential policies
stipulated in the Notice on the Implementation of Inclusive Tax Concessions for Small and Micro Enterprises for the period from January
1, 2022 to December 31, 2024.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Regulations on Value-added Tax</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the Provisional Regulations of the
PRC on Value-added Tax which were promulgated by the State Council on December 13, 1993 and last amended on November 19, 2017, and the
Implementation Rules for the Provisional Regulations the PRC on Value-added Tax, which were promulgated by the Ministry of Finance on
December 25, 1993, and last amended on October 28, 2011, all taxpayers selling goods, providing processing, repair or replacement services,
selling services, intangible properties or immovable properties within the China or importing goods to the China shall pay value-added
tax.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>REGULATIONS RELATING TO FOREIGN EXCHANGE AND
DIVIDEND DISTRIBUTION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Regulations on Foreign Exchange</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The fundamental regulation governing foreign
exchange in China is the Foreign Exchange Administration Rules of the PRC (the &ldquo;Foreign Exchange Administration Rules&rdquo;),
promulgated by the State Council on January 29, 1996 and most recently amended on August 5, 2008. Under these rules, Renminbi is generally
freely convertible for payments of current account items, such as trade and service-related foreign exchange transactions and dividend
payments, but not freely convertible for capital account items, such as direct investment, loan or investment in securities outside China,
unless a prior approval of the State Foreign Exchange Administration of the PRC (the &ldquo;SAFE&rdquo;) or its local counterparts is
obtained.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the Circular of the State Administration
of Foreign Exchange on Further Promoting the Reform of Foreign Exchange Administration and Improving the Examination of Authenticity
and Compliance, which was promulgated by SAFE on January 26, 2017, a foreign-invested enterprise may pay dividends to its foreign direct
investors through the financial institutions without the approval of SAFE; the bank shall check the relevant documents under the principle
of authenticity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the Circular on the Management of
Foreign Exchange Control on Offshore Investment and Financing and Round Trip Investment by Domestic Residents through Special Purpose
Vehicles (the &ldquo;SAFE Circular 37&rdquo;) which was promulgated by SAFE on July 4, 2014 with effect from the same day, domestic residents
shall register with the local branch of SAFE for foreign exchange registration of overseas investment before contributing the domestic
and overseas lawful assets or interests into a special purpose vehicle (the &ldquo;SPV&rdquo;), and to update such registration in the
event of any change of basic information of the registered SPV or major changes in the SPV&rsquo;s capital, including increases and decreases
of capital, share transfers, share swaps, mergers or divisions. The SPV is defined as an &ldquo;offshore enterprise directly established
or indirectly controlled by the domestic resident (including domestic institution and resident individual) with their legally owned assets
and equity of the domestic enterprise, or legally owned offshore assets or equity, for the purpose of investment and financing&rdquo;;
&ldquo;Round Trip Investment refers to &ldquo;the direct investment activities carried out by a domestic resident directly or indirectly
via a SPV, i.e., establishing a foreign-invested enterprise or project within the PRC through a new entity, merger or acquisition and
other ways, while obtaining ownership, control, operation and management and other rights and interests&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 13, 2015, SAFE promulgated the Circular
of the State Administration of Foreign Exchange on Further Simplifying and Improving the Direct Investment-related Foreign Exchange Administration
Policies (the &ldquo;<B>SAFE Circular 13</B>&rdquo;), which came into effect on June 1, 2015. According to the SAFE Circular 13, the
initial foreign exchange registration for establishing or taking control of a SPV by domestic residents can be conducted with a qualified
bank, instead of a local branch of SAFE. The SAFE Circular 13 simplifies some procedures relating to foreign exchange for direct investments.
On March 30, 2015, SAFE promulgated the Circular on Reforming of the Management Method of the Settlement of Foreign Currency Capital
of Foreign-Invested Enterprises (the &ldquo;<B>SAFE Circular 19</B>&rdquo;), which came into effect from June 1, 2015. According to the
SAFE Circular 19, the foreign exchange capital of foreign-invested enterprises shall be subject to the Discretional Foreign Exchange
Settlement (the &ldquo;<B>Discretional Foreign Exchange Settlement</B>&rdquo;). The Discretional Foreign Exchange Settlement refers to
the foreign exchange capital in the capital account of a foreign-invested enterprise for which the rights and interests of monetary contribution
has been confirmed by the local branch of SAFE (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 foreign-invested enterprise. Furthermore, the SAFE Circular 19 stipulates that
the use of capital by foreign-invested enterprises shall follow the principles of authenticity and self-use within the business scope
of enterprises.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On June 9, 2016, SAFE promulgated the Circular
on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts (the &ldquo;<B>SAFE Circular
16</B>&rdquo;), which came into effect on the same day. Pursuant to the SAFE Circular 16, enterprises registered in the PRC may also
convert their foreign debts from foreign currency to Renminbi on self-discretionary basis. The 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 self-discretionary basis which applies to all enterprises registered in the PRC. The 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On October 23, 2019, SAFE issued the Circular
on Further Promoting the Facilitation of Cross- border Trade and Investment (the &ldquo;<B>SAFE Circular 28</B>&rdquo;), which came into
effect on the same day. The SAFE Circular 28 allows all foreign-invested enterprises to make equity investment in the PRC using their
capital, with genuine investment projects and subject to compliance with the negative list. As of the date of this Annual Report, its
interpretation and implementation in practice are still subject to substantial uncertainties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I><U>Regulations on Dividend Distribution</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Distribution of dividends of foreign investment
enterprises are mainly governed by the Foreign Investment Enterprise Law, issued in 1986 and amended in 2000 and 2016, respectively,
and the Implementation Rules under the Foreign Investment Enterprise Law, issued in 1990 and amended in 2001 and 2014, respectively.
Under these regulations, foreign investment enterprises in the PRC may distribute dividends only out of their accumulative profits, if
any, determined in accordance with PRC accounting standards and regulations. In addition, no less than 10% of the accumulated profits
of the foreign investment enterprises in the PRC are required to be allocated to fund certain reserve funds each year unless these reserves
have reached 50% of the registered capital of the enterprises. A PRC company is not permitted to distribute any profits until any losses
from previous fiscal years have been offset. Profits retained from prior fiscal years may be distributed together with distributable
profits from the current fiscal year. Under our current corporate structure, our Marshall Islands holding company may rely on dividend
payments from Hongri PRC, which is a wholly foreign-owned enterprise incorporated in China, to fund any cash and financing requirements
we may have.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Regulations on Loans by Foreign Companies
to their PRC Subsidiaries</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A loan made by foreign investors as shareholders
in a foreign-invested enterprise is considered to be foreign debt in China and is regulated by various laws and regulations, including
the Regulation of the People&rsquo;s Republic of China on Foreign Exchange Administration, the Interim Provisions on the Management of
Foreign Debts, the Statistical Monitoring of Foreign Debts Tentative Provisions (Revised in 2020), the Detailed Rules for the Implementation
of Provisional Regulations on Statistics and Supervision of External Debt, and the Administrative Measures for Registration of Foreign
Debts. Under these rules and regulations, a shareholder loan in the form of foreign debt made to a PRC entity does not require the prior
approval of the SAFE. However, such foreign debt must be registered with and recorded by the SAFE or its local branches within fifteen
business days after entering into the foreign debt contract. Pursuant to these rules and regulations, the balance of the foreign debts
of a foreign-invested enterprise shall not exceed the difference between the total investment and the registered capital of the foreign-invested
enterprise (the &ldquo;<B>Total Investment and Registered Capital Balance</B>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On January 12, 2017, the People&rsquo;s Bank
of China, promulgated the Notice of the People&rsquo;s Bank of China on Matters concerning the Macro-Prudential Management of Full-Covered
Cross-Border Financing (the &ldquo;<B>PBOC Notice No. 9</B>&rdquo;). Pursuant to PBOC Notice No. 9, within a transition period of one
year from January 12, 2017, the foreign-invested enterprises may adopt the currently valid foreign debt management mechanism (the &ldquo;<B>Current
Foreign Debt Mechanism</B>&rdquo;), or the mechanism as provided in PBOC Notice No. 9 (the &ldquo;<B>Notice No. 9 Foreign Debt Mechanism</B>&rdquo;),
at their own discretions. PBOC Notice No. 9 provides that enterprises may conduct independent cross-border financing in RMB or foreign
currencies as required. Pursuant to PBOC Notice No. 9, the outstanding cross-border financing of an enterprise (the outstanding balance
drawn, here and below) shall be calculated using a risk-weighted approach, and shall not exceed certain specified upper limits. PBOC
Notice No. 9 further provides that the upper limit of risk-weighted outstanding cross-border financing for enterprises shall be equal
to 200% of its net assets multiplied by macro-prudential regulation parameter. The macro-prudential regulation parameter shall be 1.
Enterprises shall file with SAFE in its capital item information system after entering into the relevant cross-border financing contracts
and prior to three business days before drawing any money from the foreign debts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In March 2020, the PBOC and SAFE issued the Notice
on Adjustments to Comprehensive Macro-Prudential Regulation Parameters for Cross-border Financing, further increasing outstanding cross-border
financing for enterprises to 250% of its net assets. FIEs can choose to calculate their maximum amount of foreign debts based on either
(i) the Total Investment and Registered Capital Balance, or (ii) the Net Asset Limits. In addition, a foreign debt with a term longer
than one year must be filed with the NDRC before the debt issuance, and the issuer shall submit the foreign debt information to the NDRC
within 10 business days from completion of each debt issuance according to the Circular on Promoting the Reform of Filing and Registration
Administrative Regime for the Foreign Debt Issuance by the NDRC. According to the Notice on Adjustments to the Macro-Prudential Adjustment
Parameter for Cross-border Financing of Companies promulgated by the PBOC and SAFE, which took effect on January 7, 2021, the PBOC and
the SAFE decide to lower the macro-prudential adjustment parameter for cross-border financing of companies to 1 from 1.25.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><B>The HFCAA and AHFCAA</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As part of a continued regulatory focus in the
United States on access to audit and other information currently protected by national law, in particular China&rsquo;s, on May 20, 2020,
the U.S. Senate passed the HFCAA, which includes requirements for the SEC to identify issuers whose audit work is performed by auditors
that the PCAOB is unable to inspect or investigate completely because of a restriction imposed by a non-U.S. authority in the auditor&rsquo;s
local jurisdiction. The U.S. House of Representatives passed the HFCAA on December 2, 2020, and the HFCAA was signed into law on December
18, 2020.&nbsp;The HFCAA states if the SEC determines that we have filed audit reports issued by a registered public accounting firm
that has not been subject to inspection for the PCAOB for three consecutive years beginning in 2021, the SEC shall prohibit its securities
from being traded on a national securities exchange or in the over-the-counter trading market in the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On September 22, 2021, the PCAOB adopted a final
rule implementing the HFCAA, which provides a framework for the PCAOB to use when determining, as contemplated under the HFCAA, whether
the Board is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because
of a position taken by one or more authorities in that jurisdiction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 16, 2021, the PCAOB issued the Determination
Report which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in:
(1) China of the China or Hong Kong, because of a position taken by one or more authorities in China; and (2) Hong Kong, a Special Administrative
Region and dependency of the PRC, because of a position taken by one or more authorities in Hong Kong. Our auditor, Onestop, is a Singapore-based
independent accounting firm that is registered with the PCAOB and can be inspected by the PCAOB, and is subject to laws pursuant to which
the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. The PCAOB currently has access
to inspect the working papers of our auditor. We have no intention of dismissing Onestop in the future or of engaging any auditor not
subject to regular inspection by the PCAOB.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">On August 26, 2022,
the PCAOB announced and signed a Statement of Protocol (the &ldquo;Protocol&rdquo;) with CSRC and the Ministry of Finance of the People&rsquo;s
Republic of China. The Protocol provides the PCAOB with: (1) sole discretion to select the firms, audit engagements and potential violations
it inspects and investigates, without any involvement of Chinese authorities; (2) procedures for PCAOB inspectors and investigators to
view complete audit work papers with all information included and for the PCAOB to retain information as needed; (3) direct access to
interview and take testimony from all personnel associated with the audits the PCAOB inspects or investigates. On December 15, 2022,
the PCAOB issued a new Determination Report which: (1) vacated the December 16, 2021 Determination Report; and (2) concluded that the
PCAOB has been able to conduct inspections and investigations completely in the PRC in 2022. The December 15, 2022 Determination Report
cautions, however, that authorities in the PRC might take positions at any time that would prevent the PCAOB from continuing to inspect
or investigate completely. As required by the HFCAA, if in the future the PCAOB determines it no longer can inspect or investigate completely
because of a position taken by an authority in the PRC, the PCAOB will act expeditiously to consider whether it should issue a new determination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Prior to enactment of the AHFCAA, the HFCAA provided
that our securities will be prohibited from trading on any national securities exchange and in the over-the-counter market in the United
States if our auditor cannot continue to be subject to full inspection by the PCAOB for three consecutive years. On December 29, 2022,
the omnibus spending bill was signed into law, which included the enactment of provisions under the AHFCAA to accelerate the timeline
for implementation of trading prohibitions under the HFCAA from three consecutive years to two consecutive years. The termination in
or any restriction on the trading of our securities will significantly limit or completely hinder our ability to offer securities to
investors, or cause such securities to significantly decline in value or become worthless.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Regulations Relating to Product Quality</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The principal legal provisions governing product
liability are set forth in the PRC Product Quality Law, which was promulgated in February 1993 by the SCNPC and amended in July 2000
and August 2009.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The PRC Product Quality Law stipulates the responsibilities
and obligations of product sellers and producers. Violations of the PRC Product Quality Law may result in the imposition of fines. In
addition, the seller or producer may be ordered to suspend its operations, and its business license may be revoked. There may also be
criminal liability in serious cases.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the PRC Product Quality Law, consumers
or other victims who suffer injury or property losses due to product defects may demand compensation from the manufacturer as well as
the seller. After compensating the consumer, the seller may recover the corresponding amount from the manufacturer if the manufacturer
is responsible for the product defects, and vice versa.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Regulations Relating to Consumer Protection</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The principal legal provisions for the protection
of consumer interests are set forth in the Law of the PRC on Protection of Consumer Rights and Interests, or the Consumer Protection
Law, which was promulgated in October 1993 amended in October 2013. The Consumer Protection Law sets forth standards of behavior that
businesses must observe in their dealings with consumers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Violations of the Consumer Protection Law may
result in the imposition of fines. In addition, the violating entity may be ordered to suspend its operations, and its business license
may be revoked. There may also be criminal liability in serious cases.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the Consumer Protection Law, if
the legal rights and interests of a consumer are violated during the purchase or use of goods, the consumer may seek compensation from
the seller. If the manufacturer or an upstream distributor is responsible, after compensating the consumer, the seller may recover the
corresponding amount from the manufacturer or the upstream distributor. Consumers or other persons who suffer personal injury or property
damages due to defects in products may seek compensation from the manufacturer as well as the seller. After compensating the consumer,
the seller may recover the corresponding amount from the manufacturer if the manufacturer is responsible for the product defects, and
vice versa.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Regulations Relating to Environmental Matters</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our facilities are subject to various governmental
regulations related to environmental protection. We use a myriad of chemicals in our operations and produce emissions that could pose
environmental risks. Our manufacturing facilities are subject to various pollution control regulations with respect to noise, water and
air pollution and the disposal of waste and hazardous materials, including, China&rsquo;s Environmental Protection Law, Law of the People&rsquo;s
Republic of China on Appraising of Environment Impacts, China&rsquo;s Law on the Prevention and Control of Water Pollution and its implementing
rules, China&rsquo;s Law on the Prevention and Control of Air Pollution and its implementing rules, China&rsquo;s Law on the Prevention
and Control of Solid Waste Pollution, and China&rsquo;s Law on the Prevention and Control of Noise Pollution. We are subject to periodic
inspections by local environmental protection authorities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We did not incur material costs in environmental compliance in fiscal
years 2022, 2021 and 2020. We believe we are in material compliance with the relevant PRC environmental laws and regulations. We are not
currently subject to any pending actions alleging any violations of applicable PRC environmental laws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Regulations on Stock Incentive Plans</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The State Administration of Foreign Exchange
promulgated the Notice on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive
Plan of Overseas Publicly Listed Company, or the Stock Incentive Plan Notice, in February 2012, replacing the previous rules issued by
the State Administration of Foreign Exchange in March 2007. Pursuant to the Stock Incentive Plan Notice and other relevant rules and
regulations, PRC residents participating in stock incentive plan in an overseas publicly-listed company are required to register with
the State Administration of Foreign Exchange or its local branches and follow certain other procedures. Participants of a stock incentive
plan who are PRC residents must conduct the registration and other procedures with respect to the stock incentive plan through a qualified
PRC agent, which could be a PRC subsidiary of the overseas publicly listed company or another qualified institution appointed by the
PRC subsidiary. In addition, the PRC agent is required to update the relevant registration should there be any material change to the
stock incentive plan, the PRC agent or other material changes. The PRC agent must, on behalf of the PRC residents who have the right
to exercise the employee stock options, apply to the State Administration of Foreign Exchange or its local branches for an annual quota
for the payment of foreign currencies in connection with the PRC residents&rsquo; exercise of the employee stock options. The foreign
exchange proceeds received by the PRC residents from the sale of shares under the stock incentive plans granted and dividends distributed
by the overseas listed companies must be remitted into the bank accounts in the PRC opened by the PRC agents prior to distribution to
such PRC residents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have initially adopted an equity incentive
plan in 2018, under which we have the discretion to award incentives and rewards to eligible participants. On January 11, 2022, our Board
terminated the initial equity incentive plan and adopted a new equity incentive plan (the &ldquo;2022 Plan&rdquo;). On October 26, 2022,
our Board terminated the 2022 Plan, and adopted the New 2022 EIP. We have advised the recipients of awards under our equity incentive
plan to handle relevant foreign exchange matters in accordance with the Stock Incentive Plan Notice. However, we cannot guarantee that
all employee-awarded equity-based incentives can successfully register with SAFE in full compliance with the Stock Incentive Plan Notice.
See &ldquo;Risk <I>Factors&mdash;Risks Related to Doing Business in China&mdash;</I></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-size: 10pt"><B><A NAME="g_018"></A>C. Organizational
Structure</B></FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">See &ldquo;&mdash;A. <B><I>History and Development
of the Company&mdash;Corporate Structure</I></B>&rdquo; above for details of our current organizational structure.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-size: 10pt"><B><A NAME="g_019"></A>D. Property,
Plants and Equipment </B></FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><A NAME="g_020"></A>ITEM 4A. UNRESOLVED STAFF COMMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not required.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><B><A NAME="g_021"></A>ITEM 5. OPERATING AND
FINANCIAL REVIEW AND PROSPECTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">From 2022, we disposed menswear business and operate
tourism business, which can be further divided into three segments, which are air-tickets and other tourism services, Software Solution
for Tourism Cross-border operation and tourism(cross-board) merchandise products sales.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&rsquo;s non-menswear business operation,
which includes tourism cross-border merchandize, technology and tourism services, commenced in fourth quarter of 2020 as result of acquisition
of Flower Crown Holding. The non-menswear business in 2020 includes packaged travel service and cross-board merchandise, which generate
a revenue of $1,335,443. During 2021, the Company started airline tickets business to enhance its tourism supplying network and capability.
In 2022, the Company disposed menswear business, the comparative operating results excluded the menswear business into discontinued operation.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Recent Developments</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The impact of the COVID-19 pandemic on the Company&rsquo;s
business has been severe, widespread and continues to evolve. The recent COVID-19 pandemic adversely affected many businesses in China.
China implemented nationwide efforts to contain the spread of the novel coronavirus, particularly. during 2021 and 2022, when the most
severe additional lockdowns were implemented, including lockdowns in Hainan Island. These lockdowns had a significant impact on our operations,
particularly on Hainan Island, where we are based. As a result of the lockdown on Hainan Island, Chinese customs were closed, preventing
the sanitization and inspection of imported products for potential COVID-19 contamination. This effectively halted our cross-border operations.
The global spread of COVID-19 also affected our sales. This growth in revenue, especially revenues from our tourism business, has been
adversely impacted by COVID-19 pandemic at various times during 2021 because of government-enforced lockdowns.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On April 8, 2021, we offered and sold to a single
accredited investor 1,500,000 shares of our newly-designated Series A Preferred in a transaction exempt from registration requirements
of the Securities Act pursuant to Rule 506(b) of Regulation D. On April 25, 2022, we filed the Certificate of Designation of Series A
Preferred with the Registrar of Corporations; on April 27, 2022 we filed the First Amended and Restated Certificate of Designation of
Series A Preferred, and on May 10, 2022, we filed the Second Amended and Restated Certificate of Designation of Series A Preferred. As
stated in the Second Amended and Restated Certificate of Designation of Series A Preferred, all shares of Common Stock issuable upon conversion
of the Series A Preferred are subject to a two-year lock-up agreement running from the date of the sale. On May 11, 2022, 260,000 shares
of the Series A Preferred were converted into 26,000 shares of our Common Stock without additional consideration.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 12, 2021, we announced the authorization
and declaration of a dividend distribution of one right (a &ldquo;Right&rdquo;) for each outstanding share of Common Stock of the Company
to stockholders of record as of the close of business on March 31, 2021 (the &ldquo;Record Date&rdquo;). Each Right entitles the registered
holder to purchase from the Company one 0.00667 portion of a share of Series B Participating Preferred Stock of the Company at an exercise
price of $50.00 (the &ldquo;Exercise Price&rdquo;). The complete terms of the Rights are set forth in a Preferred Stock Rights Agreement
(the &ldquo;Rights Agreement&rdquo;), dated as of March 11, 2021, between the Company and American Stock Transfer &amp; Trust Company,
LLC, as rights agent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Board of Directors adopted the Rights Agreement
to protect stockholders from coercive or otherwise unfair takeover tactics. In general terms, it works by imposing a significant penalty
upon any person or group that acquires 15% or more of the Company&rsquo;s Common Stock without the approval of the Board. As a result,
the overall effect of the Rights Agreement and the issuance of the Rights may be to render more difficult or to discourage a merger, tender
or exchange offer or other business combination involving the Company that is not approved by the Board. However, neither the Rights Agreement
nor the Rights should interfere with any merger, tender or exchange offer or other business combination approved by our Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On September 3, 2021, we offered and sold an aggregate
of 150,000 of Series C Convertible Preferred Stock (&ldquo;Series C&rdquo;) for aggregate proceeds of $1,500,000 to our Chief Executive
Officer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On November 1, 2021, we offered and sold an aggregate of 100,000 shares
of Series D Preferred to the accredited investor for the aggregate proceed of $3,900,000. On May 2, 2022, the investor converted 20,000
shares of Series D Preferred into 26,000 shares of Common Stock without additional consideration.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 184.85pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On April 9, 2022, the Company dismissed its independent
registered public accounting firm, WWC, P.C. The Board of Directors of the Company approved the dismissal of WWC, P.C. and approved the
engagement of Onestop Assurance PAC as our independent registered public accounting firm, to audit the Company&rsquo;s financial statements
for the year ended December 31, 2021, in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission (the &ldquo;SEC&rdquo;) for foreign private issuers and the PCAOB.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On October 19, 2022, the Company entered into
a stock purchase agreement and closed the transaction, resulting in the Company&rsquo;s sale of 20,000 shares of common stock (the &ldquo;Shares&rdquo;)
of Hongri International , constituting all of the issued and outstanding capital stock of Hongri International, to the Purchaser, in consideration
for $10,000,000. Prior to the closing of the Sale and Purchase Transaction (the &ldquo;Closing&rdquo;), Hongri was a wholly-owned subsidiary
of the Company through which the Company operated its menswear business. As a result, the Company disposed the whole menswear business
thereon.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt"><B><A NAME="s_001"></A>A.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B>Operating Results</B></FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our operating results are primarily affected by
the following factors:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><I>Our ability to maintain
and expand our brand portfolio or maintain and enhance our brand recognition,</I></B> We mainly depend on our brand portfolio to scale
our business, attract and retain our brand partners and customers. Our Luxventure portfolio seamlessly connected various brands from
our suppliers. Although we have devoted significant resources to and incurred large amount of expenses on sourcing, maintaining, promoting
and expanding our brands, we cannot assure you that these efforts will be successful. In addition, maintaining and enhancing the recognition
of our brands are also key to our success, which could be affected by various factors, including the effectiveness of our brand marketing
strategy, publicity about our business, quality of products offered under the brands as well as preference of consumers, certain of which
are beyond our control. Any failure to maintain and expand our brand portfolio or maintain and enhance our brand recognition could have
a material and adverse effect on our business, results of operations and prospects.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&nbsp;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B><I>Flexibility and sustainability
of our product supply chain.</I></B> Our success largely depends on our ability to consistently gauge customers&rsquo; tastes and market
trends, provide a balanced assortment of merchandize and source brands that satisfies customer demands in a timely manner. Our failure
to anticipate, identify or react appropriately and timely to changes in customer preferences, tastes and market trends or economic conditions
could lead to, among other things, missed opportunities, excess inventory or inventory shortages, markdowns and write-offs, all of which
could negatively impact our profitability. In addition, failure to respond to changing customer preferences and trends in brand could
negatively impact our brand image with our customers and result in diminished brand loyalty, and thus harm the prospects of our business.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&nbsp;</TD><TD STYLE="text-align: justify"><B><I>The ability to develop, upgrade and apply our technologies
to support and expand our business. </I></B>We rely on our technology infrastructure and operating systems to carry out the key aspects
of our business, including identifying market trends in brands, selecting and partnering with quality brand partners, assisting in product
designs for our private label brands, forecasting customers&rsquo; demands, supporting our product supply chain, enabling effective marketing
and distribution, and refining customer services. We use third party social media platforms to promote our products. If we are unable
to leverage third party social media platforms to effectively attract followers and convert them into active buyers, if there is any
change, disruption or discontinuity in the features and functions of such social media platforms, our ability to acquire new consumers
and our financial condition may suffer.</TD>
</TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Financial Statement Presentation</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In December 2020, the Company acquired Flower
Crown, which at the time, contributed two new segments, tourism cross-border merchandize sales and tourism. Flower Crown add Technology
Solution for Tourism Cross-border operation segment in 2022. In October 2022, the Company disposed the whole menswear business segment,
which was presented as discontinued operation as set out below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Revenue.&nbsp;</I>During the periods covered
by this section, we generated revenue from a) sales of tourism cross-border merchandize, b) sales of Software Solution for Tourism Cross-border
operation , and c) tourism products, which covers tourism package and airline ticket sale (including related services).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Cost of sales.&nbsp;</I>Cost of sales for non-menswear
business primarily consisted of (a) the purchased costs of products online sold in connection with the revenue from cross-border merchandize,
(b) the cost to purchase tourism supply up front and cancelling cost if any, and (c) the cost for outsourcing the travelling work to certain
travel agencies</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Gross profit and gross margin.&nbsp;</I>For
the periods covered by this section, our gross profit is equal to the difference between our net sales and cost of sales. Our gross margin
is equal to the gross profit divided by net sales.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Administrative expenses.&nbsp;</I>For the periods
covered by this section, general and administrative expenses consisted primarily of compensation and benefits to our general management,
finance and administrative staff, rental costs, office supplies, utilities, and other expenses incurred in connection with general operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Comparison of Fiscal Years Ended December
31, 2022, 2021, and 2020 </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table sets forth key components
of our results of operations, for the years ended December 31, 2022, 2021, and 2020, both in U.S. dollars and as a percentage of or revenue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Year ended <BR> December&nbsp;31, 2022</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Year ended <BR> December&nbsp;31, 2021</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Year ended <BR> December&nbsp;31, 2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">% of <BR> Sales</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">% of<BR> Sales</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">% of <BR> Sales</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 28%; text-indent: -9pt; padding-left: 9pt">Revenue</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">79,874,727</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">54,040,948</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">1,335,374</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -9pt; padding-left: 9pt">Cost of sales</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(78,410,244</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-98</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(53,193,237</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-98</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,168,808</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-88</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Gross profit (loss)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">1,464,483</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">847,711</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">166,566</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Operating expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 0.25in">Distribution and selling expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(721,388</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-1</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,353,843</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-3</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 0.25in">Administrative expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(56,043,741</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-70</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,858,210</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-13</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,164,981</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-87</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Total operating expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(56,765,129</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-71</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8,212,053</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-15</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,164,981</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-87</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Other income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,636</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34,793</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,122</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Other gains and losses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(98,650</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(17,325</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Loss before tax</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(55,382,660</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-69</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,346,874</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-14</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(995,293</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-75</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Income tax</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(621</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,495</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Loss from continuing operations</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">(55,383,281</TD><TD STYLE="font-weight: bold; text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-69</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,352,369</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-14</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(995,293</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-75</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Discontinued operations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(18,109,150</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-8</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(29,863,116</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-55</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,672,124</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-350</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Total Loss for the year</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">(73,492,431</TD><TD STYLE="font-weight: bold; text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-78</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(37,215,483</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-69</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,667,417</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-424</TD><TD STYLE="text-align: left">%</TD></TR>
  </TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Flower Crown is a subsidiary operating three sub-segment
business, which are tourism (Luxury travel experiences), cross-border merchandise and B2B technology solution. The consolidated financial
statements for the year ended December 31, 2020 includes 1 month operation result of Flower Crown. The three sub-segments are presented
as below:</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Tourism</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Technology</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Cross border<BR>
 merchandize revenue</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the year ended<BR>
 December&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the year ended<BR>
 December&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">For the year ended<BR>
 December&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1.5pt solid">By business</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 19%; text-align: left; text-indent: -9pt; padding-left: 9pt">Sales to external customers</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">79,092,342</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">51,818,166</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">991,929</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">782,302</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">83</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">2,222,782</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">343,445</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Segment revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">79,092,342</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">51,818,166</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">991,929</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">782,302</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">83</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,222,782</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">343,445</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Segment gross margins/(loss)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">704,391</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">541,889</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">96,578</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">760,028</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">64</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">305,822</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">69,988</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Gross margin rate</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9.7</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">97</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">77</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13.7</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20.3</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In 2022, the total revenue increased to $79.87
million by 47.80% from $54.0 million in 2021. The increase mainly due to the reason that the airline tickets business started in 2021
only included 7 month of operation result in 2021, while the revenue in 2022 is a full year. The increase in revenue of tourism segment
is due to the same reason.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In 2022, the revenue of technology segment generated
$782,302 compared to zero in previous years due to our self-developed B2B technology solution for tourism cross-board merchandize were
accepted by small players, which are not able to develop the system by themselves.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In 2022, the revenue of Cross board merchandise
segment decreased to $83, by $2,222,699 or 99.9% from $2,222,782 in 2021. The decrease is mainly due to our efforts and strategy shift
to find other profitable sub-segments in 2022 and China&rsquo;s continuing lock-down enforcement of Covid-19 policy, which resulted in
less products sales in 2022.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In 2021, the total revenue of tourism segment
increased to $51.82 million by 5082% from $1.0 million in 2020. The increase mainly due to following factors: 1) the revenue in 2020 only
included 1 month of operation result of Flower Crown; and 2) Flower Crown started its airline tickets business in 2021, which contributed
a revenue of $51.20 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In 2021, the revenue for cross-border merchandise
sub-segment increase to $2.2 million by 547% from $0.34 million in 2020. The increase of revenue is mainly due to the reason that the
revenue in 2020 only included 1 month of operation result. If compared to the projected result of 2020&rsquo;s revenue, the revenue for
cross-border merchandise sub-segment in 2021 decreased by 46%.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Cost of sales and gross profit rate</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Cost of sales primarily consisted of (a) the purchased
costs of products sold in connection with the revenue from cross-border merchandize, (b) the cost to purchase tourism supply up front
and cancelling cost if any, and (c) the cost for outsourcing the travelling work to certain travel agencies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our cost of sales increased from $53.19 million
in year 2021 to $78.41 million in year 2022. The increase was mainly due to the increase of cost in connection with the increasing tourism
segment&rsquo;s revenue in year 2022 compared to 2021.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The gross profit ratio increased slightly from
1.6% in 2021 to 1.8% in 2022, which is mainly due to the reason that the suppliers offered to the Company lower purchase prices as compared
to 2021 due to larger and more stable volume of purchase. The gross profit ratio of technology sub-segment in 2022 achieved 97% due to
the reason that most of the revenue in 2022 of this sub-segments was contributed to self-developed cross-board related software sold to
customers and the developing costs of the software was recorded as general and administrative expenses in 2022 or prior years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our cost of sales increased from $1.17 million
in year 2020 to $53.19 million in year 2021. The increase was mainly due to the increase of cost in connection with the increasing travel
segment&rsquo;s revenue in year 2021 compared to 2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The gross profit rate decreased from 12% in year
2020 to 2% in year 2021 due to the reason that the new business of airline tickets with gross margin at 1% which contributed $51.2 million
or 94.8% of total revenue in 2021. The Company&rsquo;s strategy is to build up tourism supply chain network so that can be a tailored
one-stop tourism online platform eventually. As a result, a competitive supply resources, including the airline tickets, are essential
to the strategy. To reach such goal, the Company connected to different airlines and tried to create more transaction volume in order
to achieve a higher discount rates from the airline companies. As a result, the gross margin for this sector may be higher once the volume
is higher enough or more overseas airline tickets can be sold once Covid-19 impact to tourism is reduced.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Administrative expenses</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Administrative expenses increased by $49.19 million
or 717.2% to $56.04 million for year 2022 from $6.86 million for year 2021. The change was mainly due to the increase of the company&rsquo;s
share-based compensation paid to employees, officers and directors of the company in year 2022, which was $53.3 million in 2022 compared
to $4.4 million in 2021, representing an increase of $48.8 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Administrative expenses increased by $5.69 million
or 486% to $6.86 million for year 2021 from $1.17 million for year 2020. The change was mainly due to 1) increase of the company&rsquo;s
share-based compensation paid to vendors, employees, officers and directors of the company in year 2021; and 2) increase of such expenses
for Flower Crown&rsquo;s business by $2.09 million or 1300% compared to $0.15 million in 2020 for 1 month&rsquo;s operation result.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Distribution and selling expenses</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The selling and distribution expenses decreased
by $0.63 million or 46% to $0.72 million for the year ended December 31, 2022 from $1.35 million for the year ended December 31, 2021,
primarily due to the reason that in 2021, the Company outsourced certain sales functions to third parties, while in middle of 2022, the
Company fully executed the sales functions by its own team, which reduced the outsourced expenses significantly.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The selling and distribution expenses increased
by $1.35 million to $1.35 million for the year ended December 31, 2021 from nil for the year ended December 31, 2020, primarily due to
the reason that the selling and distribution expenses in 2020 only include 1 month&rsquo;s operation result of the two segments and no
selling or distribution expenses was incurred during the last month of 2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Profit for the year</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We had a loss of $73.5 million in 2022 as compared
to a loss of $37.2 million in 2021, representing an increase of loss of $36.3 million or 97%. Net margin was -93% for the year ended December
31, 2022, compared to -69% for the year ended December 31, 2021.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We had a loss of $37.2 million in 2021 as compared
to a loss of $5.7 million for 2020, representing an increase of loss of $31.5 million or 557%. Net margin was -69% for the year ended
December 31, 2021, compared to -424% for the year ended December 31, 2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Loss for the year increased from 2021 to 2022
mainly due to the following reasons: (1) increment expenses for share-based compensations to employees, Directors and managements of $48.8
million; (2) by netting of the decrease of loss on discontinued operations of 11.8 million, presenting a decrease from $29.9 million in
2021 to $18.1 million in 2022.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Loss for the year increased from 2020 to 2021
mainly due to the following reasons: (1) increment expenses for newly started tourism business while the gross profit from the segments
were not able to cover the expenses yet; (2) the increment of discontinued operation loss of $25.2 million, representing an increase from
$4.7 million in 2020 to $29.9 million in 2021.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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"><FONT STYLE="font-size: 10pt"><B><A NAME="s_002"></A>B.</B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B>Liquidity and Capital Resources </B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2022, we had cash and cash
equivalents of $520,916. Our cash and cash equivalents consist of cash on hand and cash in the banks. As of December 31, 2022, the Company
had a net working capital (defined as total current assets deducted by total current liabilities) deficit of $463,812, accumulated deficit
of $66,080,395, net loss of $62,121,310, and net cash outflows from operating activities of $2,224,308.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&rsquo;s current business remains an
early-stage growth company. The management of the company believes that its operating income, combined with the CEO&rsquo;s commitment to cover
operating expenses through loans, will enable the business to continue its operations. In parallel, the Company&rsquo;s management continually
monitors its capital structure and operating plans and evaluates various potential funding alternatives that may be needed in order to
finance the Company research and development activities, general and administrative expenses and growth strategy. These alternatives include
raising funds through public or private equity markets and either from institutional or retail investors. Although there is no assurance
that, if needed, the Company will be successful with its fundraising initiatives, management believes that the Company will be able to
secure the necessary financing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Given the above, the accompanying consolidated
financial statements have been prepared assuming the Company will continue as a going concern.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table provides detailed information
about our net cash flow for all financial statement periods presented in this report:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Fiscal Year Ended December&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left; text-indent: -9pt; padding-left: 9pt">Net cash provided by (used in) operating activities</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(4,957,411</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(7,775,819</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(6,520,790</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Net cash provided by (used in) investing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(9,443,746</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,279,171</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">607,414</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Net cash provided by (used in) financing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,220,098</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,958,971</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">846,854</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Net increase (decrease) in cash and cash equivalents</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(12,181,059</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,096,019</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,066,462</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Effects of exchange rate change in cash</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(212,939</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">389,643</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,067,274</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Cash and cash equivalents at beginning of the period</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">12,914,914</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">16,621,290</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">20,620,478</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Cash and cash equivalent at end of the period</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">520,916</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">12,914,914</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">16,621,290</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Operating Activities</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The net cash provided by operating activities
consists of profit before tax, as adjusted by finance costs, change in fair value of warrant liabilities, interest income, shared based
compensation, bad debt allowance, depreciation of property, plant and equipment, amortization of prepaid lease payment and trademark,
amortization of subsidies prepaid to distributors, amortization of prepayment and premiums under operating leases, provision(Reversal)
of inventory obsolescence, provision of impairment loss in prepayments, loss(gain) on disposal of property, plant and equipment, deferred
income tax, which include trade and other receivables, prepayment and deferred expenses, inventory, trade and other payables.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Net cash used in operating activities in fiscal year 2022 was $5.0
million, compared with net cash used in operating activities of $7.78 million in the year ended December 31, 2021. The cash outflow in
2022 is mainly resulted from net loss of $73.5 million and gain on disposal of subsidiary of $2.2 million, by netting off stock-based
compensation of $53.3 million, loss on disposal of subsidiaries of $9.2 million, bad debt provision of $5.0 million, depreciation of $0.7
million and other working capital changes effects.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Net cash used in operating activities in fiscal
year 2021 was $7.78 million, compared with net cash used in operating activities of $6.5 million in the year ended December 31, 2020.
The cash outflow in 2021 is mainly resulted from net loss of $37.2 million by netting off bad debt provision and impairment of $9.0 million,
and stock-based compensation of $4.4 million, deferred tax assets net decrease of $17.5 million, adding the effect of increase of receivables
of $3.3 million and other working capital changes effects.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Investing Activities</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Net cash used in investing activities in fiscal
year 2022 was $12.3 million, compared with $3.3 million net cash used in investing activities in 2021. The net cash used in investing
activities in 2022 mainly resulted from cash decreased due to disposal of discontinued operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Net cash used in investing activities in fiscal
year 2021 was $3.3 million, compared with $0.61 million net cash provided by investing activities in 2020. The net cash used in investing
activities in 2021 mainly resulted from acquiring property, plants and equipment of $3.3 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Financing Activities</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Net cash generated from financing activities in
fiscal year 2022 was $2.22 million, compared with $6.96 million net cash generated in financing activities in 2021.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Net cash&nbsp;generated from financing&nbsp;activities&nbsp;in&nbsp;2022
represents the proceeds from related parties of $2.2 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Net cash generated from financing activities in
fiscal year 2021 was $6.95 million, compared with $0.857 million net cash generated in financing activities in 2020.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Net cash&nbsp;generated from financing&nbsp;activities&nbsp;in&nbsp;2021
were primarily&nbsp;due to proceeds of US$1,500,000 raised from the sale of our Series A Preferred in April 2021 to a single investor,
US$1,500,000 raised from the sale of our Series C Preferred in September 2021 to our Chief Executive Officer; and $3,900,000 raised from
the sale of the Series D Convertible Preferred Stock to a single investor on November 1, 2021. All sale of shares of Preferred Stock were
exempt from the registration requirements of the Securities Act.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Loans, Other Commitments, Contingencies</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2022, the Company does not
have any bank loans. As of December 31, 2022, the Company guaranteed a loan to a third party with maximum liability exposure of US$652,293.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We may, however, in the future, require additional
cash resources due to changing business conditions, implementation of our strategy to expand our business or other investments or acquisitions
we may decide to pursue. If our own financial resources are insufficient to satisfy the capital requirements, we may seek to sell additional
equity or debt securities or obtain additional credit facilities. The sale of additional equity securities could result in dilution to
our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating
and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if
at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business
operations and could harm our overall business prospects.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt"><B><A NAME="s_003"></A>C.</B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B>Research and Development, Patents and Licenses, Etc.</B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our industry is characterized by rapid technological
change, evolving industry standards and changing customer demands. These conditions require continuous expenditures on product research
and development to enhance existing products create new products and avoid product obsolescence. See Item 3 &ldquo;Key Information&mdash;D.
Risk Factors&mdash;If we are unable to develop competitive new products and service offerings our future results of operations could be
adversely affected,&rdquo; &mdash;&ldquo;If we are unable to keep pace with the rapid technological changes in our industry, demand for
our products and services could decline which would adversely affect our revenue,&rdquo; and &mdash;&ldquo;Our technology may become obsolete
which could materially adversely affect our ability to sell our products and services.&rdquo; For a detailed analysis of research and
development costs, see Item 5.A. &ldquo;Operating Results&mdash;Results of Operations&mdash;Research and development expenses&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt"><B><A NAME="s_004"></A>D.</B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B>Trend Information</B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Other than as disclosed elsewhere in this annual
report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2021 that are reasonably
likely to have a material adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause
the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt"><B><A NAME="s_005"></A>E.</B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B>Off-Balance Sheet Arrangements</B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We do not have any off-balance sheet arrangements
that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, sales
or expenses, results of operations, liquidity or capital expenditures, or capital resources that are material to an investment in our
securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt"><B><A NAME="s_006"></A>F.</B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B>Tabular Disclosure of Contractual Obligations</B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have no other material long-term debt, capital
or operating lease or fixed purchase obligations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Inflation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Inflation and changing prices have not had a material
effect on our business, and we do not expect that inflation or changing prices will materially affect our business in the foreseeable
future. However, our management will closely monitor price changes in the Chinese economy and the apparel industry and continually maintain
effective cost controls in operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Seasonality</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our business, like that of many retailers, is
seasonal. Historically, we have realized more of our revenue and earnings in the fourth quarter, which includes the majority of the holiday
shopping season, than in any other fiscal quarter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Critical Accounting Policies</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The preparation of financial statements is in
conformity with IFRS as issued by the IASB. It requires the Company&rsquo;s management to make assumptions, estimates and judgments that
affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. The Company
has identified certain accounting policies that are significant to the preparation of Company&rsquo;s financial statements. These accounting
policies are important for an understanding of the Company&rsquo;s financial condition and results of operation. Critical accounting policies
are those that are most important to the portrayal of the Company&rsquo;s financial condition and results of operations and require management&rsquo;s
difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently
uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance
to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management&rsquo;s
current judgments. The Company believes the following critical accounting policies involve the most significant estimates and judgments
used in the preparation of the Company&rsquo;s financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Revenue recognition</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I><U>Revenue from contracts with customers</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Revenue from contracts with customers is recognized
when control of goods or services is transferred to the customers at an amount that reflects the consideration to which the Company expects
to be entitled in exchange for those goods or services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">When the consideration in a contract includes
a variable amount, the amount of consideration is estimated to which the Company will be entitled in exchange for transferring the goods
or services to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable
that a significant revenue reversal in the amount of cumulative revenue recognized will not occur when the associated uncertainty with
the variable consideration is subsequently resolved. Currently, the Company&rsquo;s contracts do not include such variable amount.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">When the contract contains a financing component
which provides the customer a significant benefit of financing the transfer of goods or services to the customer for more than one year,
revenue is measured at the present value of the amount receivable, discounted using the discount rate that would be reflected in a separate
financing transaction between the Company and the customer at contract inception. When the contract contains a financing component which
provides the Company a significant financial benefit for more than one year, revenue recognized under the contract includes the interest
expense accreted on the contract liability under the effective interest method. For a contract where the period between the payment by
the customer and the transfer of the promised goods or services is one year or less, the transaction price is not adjusted for the effects
of a significant financing component, using the practical expedient in IFRS 15. Currently, the Company&rsquo;s contract with its customers
do not include financial benefit for more than one year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Nature and timing of satisfaction of performance
obligations for each of the revenue streams are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I><U>Revenue from the sale of goods</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Performance obligation is satisfied at the point
in time when control of the asset is transferred to the customer, generally on delivery and acceptance of the goods. The Company presents
revenues from such transactions on a gross basis in the consolidated statements of comprehensive loss, as the Company acts as a principal
to take inventory risks of these goods.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I><U>Revenue from the sale of Tourism Package</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Performance obligation is satisfied when the tourism
package is completed, generally when the tour group successfully returned from the tour destination to the place of origination. The Company
presents revenues from such transactions on a gross basis in the consolidated statements of comprehensive loss, as the Company acts as
a principal to provide a package of tourism services and take a full obligation to provide such services even if the suppliers are not
able to deliver service.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I><U>Revenue from reselling of airline-ticket</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company is a reseller of air-ticket, it provides
value add services to its customers including guaranteed flight replacement and other financial benefits. The revenue is recognized when
performance obligation has been satisfied, which could be significantly after the ticket sale. The Company recognizes gross revenue with
an expense from the cost of purchasing from the supplier.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I><U>Other income</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Interest income is recognized on an accrual basis
using the effective interest method by applying the rate that exactly discounts the estimated future cash receipts over the expected life
of the financial instrument or a shorter period, when appropriate, to the net carrying amount of the financial asset.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I></I>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Rental income is recognized on a time proportion
basis over the lease terms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Dividend income is recognized when the shareholders&rsquo;
right to receive payment has been established, it is probable that the economic benefits associated with the dividend will flow to the
Company and the amount of the dividend can be measured reliably.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Borrowing costs</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for
their intended use or sale, are added to the cost of those assets until such time as the assets are substantially ready for their intended
use or sale.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">All other borrowing costs are recognized in profit
or loss in the period in which they are incurred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Retirement benefit costs</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the relevant regulations of the PRC
government, the Group&rsquo;s subsidiaries located in the PRC participate in a local municipal government retirement benefits scheme (the
&ldquo;Scheme&rdquo;), whereby they contribute a prescribed percentage of the basic salaries of their employees to the Scheme to fund
their retirement benefits. Once the Scheme has been funded via contributions by the Group&rsquo;s participating subsidiaries, the local
municipal government takes responsibility for the retirement benefits obligations of all existing and future retired employees of those
subsidiaries located in the PRC; accordingly, the only obligation of the Group with respect to the Scheme is to pay the on-going required
contributions as long as the employees maintain employment with the Group. There are no provisions under the Scheme whereby forfeited
contributions may be used to reduce future contributions. These plans are considered defined contribution plans. The Group has no legal
or constructive obligations to pay further contributions after its payment of the fixed contributions into the pension schemes. Contributions
to pension schemes are recognized as an expense in the period in which the related service is performed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Taxation</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The tax expense for the period comprises current
and deferred tax. Tax is recognized in the income statement, except to the extent that it relates to items recognized in other comprehensive
income or directly in equity. In this case the tax is also recognized in other comprehensive income or directly in equity, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The current income tax charge is calculated on
the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Group operates and generates
taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation
is subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Deferred tax is recognized on temporary differences
between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in
the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax
assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be
available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized
if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets
and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Deferred tax liabilities are recognized for taxable
temporary differences associated with investments in subsidiaries, except where the Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from
deductible temporary differences associated with such investments are only recognized to the extent that it is probable that there will
be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the
foreseeable future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The carrying amount of deferred tax assets is
reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will
be available to allow all or part of the asset to be recovered.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Deferred tax assets and liabilities are measured
at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates
(and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities
and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period,
to recover or settle the carrying amount of its assets and liabilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Deferred income tax assets and liabilities are
offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income
tax assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable
entities where there is an intention to settle the balances on a net basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Current and deferred tax are recognized in profit
or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the
current and deferred tax are also recognized in other comprehensive income or directly in equity respectively. Where current tax or deferred
tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Leasing</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">IFRS 16 Leases requires lessees to recognize assets
and liabilities for most leases based on a &lsquo;right-of-use model&rsquo; which reflects that, at the commencement date, a lessee has
a financial obligation to make lease payments to the lessor for its right to use the underlying asset during the lease term. The lessor
conveys that right to use the underlying asset at lease commencement, which is the time when it makes the underlying asset available for
use by the lessee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">IFRS 16 defines a lease term as the noncancellable
period for which the lessee has the right to use an underlying asset including optional periods when an entity is reasonably certain to
exercise an option to extend (or not to terminate) a lease.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under IFRS 16 lessees may also elect not to recognize assets and liabilities
for leases with a lease term of 12 months or less. In such cases a lessee recognizes the lease payments in profit or loss on a straight-line
basis over the lease term. The exemption is required to be applied by class of underlying assets. Lessees can also make an election for
leases for which the underlying asset is of low value. This election can be made on a lease-by-lease basis. For leases where the Group
is the lessee, the lease term is either cancelable or no longer than 12 months, so the Group has elected not to record the leased assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Lessor accounting under IFRS 16 is substantially
unchanged from IAS 17. Lessors continue to classify leases as either operating or finance leases using similar principles as in IAS 17.
IFRS 16 did not have any significant impact on leases where the Group is the lessor.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Leasehold improvements</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Leasehold improvements, principally comprising
costs of office buildings and shops renovation, are held for administrative and selling purposes. Leasehold improvements are initially
measured at cost and amortized systematically over its useful life.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Property, plant and equipment</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Property, plant and equipment (&ldquo;PPE&rdquo;)
including buildings held for use in the production or supply of goods or services, or for administrative purposes other than construction
in progress are stated at cost less subsequent accumulated depreciation and accumulated impairment losses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Depreciation is provided to write off the cost
of items of property, plant and equipment other than construction in progress over their estimated useful lives and after taking into
account of their estimated residual value, using the straight-line method.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Construction in progress includes property, plant
and equipment in the course of construction for production or for its own use purposes. Construction in progress is carried at cost less
any recognized impairment loss. Construction in progress is classified to the appropriate category of property, plant and equipment when
completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets
are ready for their intended use.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">An item of property, plant and equipment is derecognized
upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising
on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is
included in profit or loss in the period in which the item is de-recognized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Inventories</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Inventories are stated at the lower of cost and
net realizable value. Costs of inventories are determined using the weighted average method. Net realizable value represents the estimated
selling price for inventories less all estimated costs of completion and costs necessary to make the sale.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Financial instruments &ndash; investments and
other financial assets</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Initial recognition and measurement</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Financial assets are classified, at initial recognition,
as subsequently measured at amortized cost, fair value through other comprehensive income, and fair value through profit or loss.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The classification of financial assets at initial
recognition depends on the financial asset&rsquo;s contractual cash flow characteristics and the Group&rsquo;s business model for managing
them. With the exception of trade receivables that do not contain a significant financing component or for which the Group has applied
the practical expedient of not adjusting the effect of a significant financing component, the Group initially measures a financial asset
at its fair value, plus in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables
that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction
price determined under IFRS 15 in accordance with the policies set out for &ldquo;Revenue recognition&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In order for a financial asset to be classified
and measured at amortized cost or fair value through other comprehensive income, it needs to give rise to cash flows that are solely payments
of principal and interest (&ldquo;SPPI&rdquo;) on the principal amount outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Group&rsquo;s business model for managing
financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether
cash flows will result from collecting contractual cash flows, selling the financial assets, or both.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">All regular way purchases and sales of financial
assets are recognized on the trade date, that is, the date that the Group commits to purchase or sell the asset. Regular way purchases
or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation
or convention in the marketplace.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Subsequent measurement</i></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The subsequent measurement of financial assets
depends on their classification as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Financial assets at amortized cost (debt instruments)</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Group measures financial assets at amortized
cost if both of the following conditions are met:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; width: 0.25in">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 0.25in"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; width: 0.25in">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 0.25in"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Financial assets at amortized cost are subsequently
measured using the effective interest method and are subject to impairment. Gains and losses are recognized in the income statement when
the asset is derecognized, modified or impaired.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Financial assets at fair value through other
comprehensive income (debt instruments)</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Group measures debt instruments at fair value
through other comprehensive income if both of the following conditions are met:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; width: 0.25in">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 0.25in"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">The financial asset is held within a business model with the objective of both holding to collect contractual cash flows and selling.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; width: 0.25in">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 0.25in"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For debt instruments at fair value through other
comprehensive income, interest income, foreign exchange revaluation and impairment losses or reversals are recognized in the income statement
and computed in the same manner as for financial assets measured at amortized cost. The remaining fair value changes are recognized in
other comprehensive income. Upon derecognition, the cumulative fair value change recognized in other comprehensive income is recycled
to the income statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Financial assets at fair value through other
comprehensive income (equity investments)</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Upon initial recognition, the Group can elect
to classify irrevocably its equity investments as equity investments designated at fair value through other comprehensive income when
they meet the definition of equity under HKAS 32 Financial Instruments: Presentation and are not held for trading. The classification
is determined on an instrument-by-instrument basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Gains and losses on these financial assets are
never recycled to the income statement. Dividends are recognized as other income in the income statement when the right of payment has
been established, it is probable that the economic benefits associated with the dividend will flow to the Group and the amount of the
dividend can be measured reliably, except when the Group benefits from such proceeds as a recovery of part of the cost of the financial
asset, in which case, such gains are recorded in other comprehensive income. Equity investments designated at fair value through other
comprehensive income are not subject to impairment assessment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Financial assets at fair value through profit
or loss</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Financial assets at fair value through profit
or loss include financial assets held for trading, financial assets designated upon initial recognition at fair value through profit or
loss, or financial assets mandatorily required to be measured at fair value. Financial assets are classified as held for trading if they
are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also
classified as held for trading unless they are designated as effective hedging instruments. Financial assets with cash flows that are
not solely payments of principal and interest are classified and measured at fair value through profit or loss, irrespective of the business
model. Notwithstanding the criteria for debt instruments to be classified at amortized cost or at fair value through other comprehensive
income, as described above, debt instruments may be designated at fair value through profit or loss on initial recognition if doing so
eliminates, or significantly reduces, an accounting mismatch.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Financial assets at fair value through profit
or loss are carried in the statement of financial position at fair value with net changes in fair value recognized in the income statement.
This category includes derivative financial instruments and structured bank deposits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A derivative embedded in a hybrid contract, with
a financial liability or non-financial host, is separated from the host and accounted for as a separate derivative if the economic characteristics
and risks are not closely related to the host; a separate instrument with the same terms as the embedded derivative would meet the definition
of a derivative; and the hybrid contract is not measured at fair value through profit or loss. Embedded derivatives are measured at fair
value with changes in fair value recognized in the income statement. Reassessment only occurs if there is either a change in the terms
of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a financial asset
out of the fair value through profit or loss category.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A derivative embedded within a hybrid contract
containing a financial asset host is not accounted for separately. The financial asset host together with the embedded derivative is required
to be classified in its entirety as a financial asset at fair value through profit or loss.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Financial instruments &ndash; impairment of
financial assets</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Group recognizes an allowance for ECLs for
all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows
due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original
effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements
that are integral to the contractual terms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">General approach</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">ECLs are recognized in two stages. For credit
exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses
that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there
has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over
the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">At each reporting date, the Group assesses whether
the credit risk on a financial instrument has increased significantly since initial recognition. When making the assessment, the Group
compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on
the financial instrument as at the date of initial recognition and considers reasonable and supportable information that is available
without undue cost or effort, including historical and forward-looking information.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Group considers a financial asset in default
when contractual payments are 120 days past due. However, in certain cases, the Group may also consider a financial asset to be in default
when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before
taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation
of recovering the contractual cash flows.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Debt instruments at fair value through other comprehensive
income and financial assets at amortized cost are subject to impairment under the general approach and they are classified within the
following stages for measurement of ECLs except for trade receivables which apply the simplified approach as detailed below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.6in; text-align: justify"><FONT STYLE="font-size: 10pt">Stage 1 &ndash; </FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Financial instruments for which credit risk has not increased significantly since initial recognition and for which the loss allowance is measured at an amount equal to 12-month ECLs</FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Stage 2 &ndash; </FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Financial instruments for which credit risk has increased significantly since initial recognition but that are not credit-impaired financial assets and for which the loss allowance is measured at an amount equal to lifetime ECLs</FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Stage 3 &ndash;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Financial assets that are credit-impaired at the reporting date (but that are not purchased or originated credit-impaired) and for which the loss allowance is measured at an amount equal to lifetime ECLs</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Simplified approach</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For trade receivables that do not contain a significant
financing component or when the Group applies the practical expedient of not adjusting the effect of a significant financing component,
the Group applies the simplified approach in calculating ECLs. Under the simplified approach, the Group does not track changes in credit
risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix
that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic
environment.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For trade receivables that contain a significant
financing component and lease receivables, the Group chooses as its accounting policy to adopt the simplified approach in calculating
ECLs with policies as described above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Financial instruments &ndash; derecognition
of financial assets</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A financial asset (or, where applicable, a part
of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Group&rsquo;s consolidated
statement of financial position) when:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; width: 0.25in">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 0.25in"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">the rights to receive cash flows from the asset have expired; or</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; width: 0.25in">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 0.25in"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a &ldquo;pass-through&rdquo; arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">When the Group has transferred its rights to receive
cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risk
and rewards of ownership of the asset. When it has neither transferred nor retained substantially all the risks and rewards of the asset
nor transferred control of the asset, the Group continues to recognize the transferred asset to the extent of the Group&rsquo;s continuing
involvement. In that case, the Group also recognizes an associated liability. The transferred asset and the associated liability are measured
on a basis that reflects the rights and obligations that the Group has retained.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Continuing involvement that takes the form of
a guarantee over the transferred asset is measured at the lower of the original amount of the asset and the maximum amount of consideration
that the Group could be required to repay.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Financial instruments &ndash; financial liabilities</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Initial recognition and measurement</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">All financial liabilities are recognized initially
at fair value and, in the case of loans and borrowings, net of directly attributable transaction costs. The Group&rsquo;s financial liabilities
include trade payables, other payables, financial liabilities included in accruals and interest-bearing bank borrowings.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Subsequent measurement</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">After initial recognition, interest-bearing loans
and borrowings are subsequently measured at amortized cost, using the effective interest rate method unless the effect of discounting
would be immaterial, in which case they are stated at cost. Gains and losses are recognized in the income statement when the liabilities
are derecognized as well as through the effective interest rate amortization process.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Amortized cost is calculated by taking into account
any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest
rate amortization is included in finance costs in the income statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Financial instruments &ndash; derecognition
of financial liabilities</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A financial liability is derecognized when the
obligation under the liability is discharged or cancelled, or expires.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">When an existing financial liability is replaced
by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such
an exchange or modification is treated as a derecognition of the original liability and a recognition of a new liability, and the difference
between the respective carrying amounts is recognized in the income statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Financial instruments &ndash; offsetting financial
instruments</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Financial assets and financial liabilities are
offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset
the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt"><B><A NAME="s_007"></A>G.</B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B>Safe Harbor</B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">See &ldquo;Introductory Notes&mdash;Forward-Looking
Information.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><A NAME="g_028"></A><B>ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="text-align: left; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><A NAME="g_029"></A><FONT STYLE="font-size: 10pt"><B>A.
</B></FONT>Directors and Senior Management</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table sets forth certain information
regarding our directors and senior management, as well as employees upon whose work we are dependent, as of the date of this annual report.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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"><FONT STYLE="font-size: 10pt"><B>NAME</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>AGE</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>POSITION</B></FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 31%; padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt">Sun Lei</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 5%; text-align: center"><FONT STYLE="font-size: 10pt">39</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 60%; text-align: justify"><FONT STYLE="font-size: 10pt">Chief Executive Officer, Co-chairwoman and Director </FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt">Huidan Li</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">41</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Co-chairman and Director</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt">Mu Ruifeng</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">59</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Independent Director</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt">Baojun Zhu</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">46</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Independent Director</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt">Jin Yan</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt">53</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Independent Director</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Ms. Sun Lei. </B>Ms. Sun, age 39, has been
our Chief Executive Officer and a director of our board since December 21, 2020, and our Interim Financial Officer and Co-Chairwoman since
November 7, 2022. She is an expert in management operation and an avid world traveler. She was: i) the CEO of a family-owned conglomerate
and, during her tenure, fully revamped its operation and expanded its business operation through mergers and acquisitions; ii) formed
a partnership with Richemont International Group in Paris; and iii) founded Jinxuan Luxury Tourism Group in 2016, engaging in the operation
of global high-end business jets, luxury brand yachts and automobiles. In addition to her rich experience in luxury goods management,
Ms. Sun is also an E-Commerce entrepreneur. Ms. Sun Lei graduated from Emlyon Business School in France with a Bachelor&rsquo;s degree
in business administration, a Master&rsquo;s Degree in economics and a Master&rsquo;s degree in finance. She also studied at School of
Economics and Management of Tsinghua University.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Mr. Huidan Li.</B> Mr. Li, age 41, has been
our Chairman and a director of our board since December 21, 2020, and now is a Co-chairman since November 7, 2022. He is the founder
of Baofu (Beijing) Holding Co., Ltd (&ldquo;Baofu&rdquo;). For the past fifteen (15) years, Mr. Li successfully expanded its business
into real estate, import and export, fin-tech and medical sectors. Baofu currently operates more than 15 companies. Mr. Li received his
MBA degree from University of Hawaii.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Baojun Zhu,</B> age 46, was appointed as a
member to our Board and a member of the Audit Committee on May 3, 2022. He has over 20 years of experience in the hospitality industry.
He is currently the Chairman of Baoxuan Group Co., Ltd, Vice President of China Hospitality Association, Vice President of Chinese Cuisine
Association. Mr. Zhu received award for Outstanding Meritorious Personage in Chinese hotel industry. Mr. Zhu acquired a range of expertise
in business based upon his over 20 years in the business world. The Board determined that Mr. Zhu is an independent director within the
meaning of the NASDAQ listing rules.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Mr. Mu Ruifeng. </B>Mr. Mu, age 59, has been
the independent director of our board since October 25, 2020. He is the founder of Xinruifeng Property Marketing Management Co., Ltd.
and Xinruifeng Investment Group Co., Ltd. He is currently serving as the general manager and chairman of the board of those two companies.
In addition, Mr. Mu also is the vice president of the Overseas Chinese Chamber of Commerce and a Hong Kong, Macao and Taiwanese specially
invited member of the Foreign Affairs Committee. Mr. Mu is also an investor in Touch Stone Investment Pty, Ltd., a fund based in Australia
focusing on the real estate market since 2015. Mr. Mu has acquired a range of expertise in business based upon his over 30 years in the
business world. In addition, Mr. Mu was appointed by the board of directors as the Chair of the Audit Committee. Our board of directors
has also determined that Mr. Mu is an &ldquo;audit committee financial expert&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Mr. Jin Yan. </B>Mr. Jin, age 53, has been
the independent director of our board since October 25, 2020. He has over 20 years of marketing experience in the entertainment industry.
He is also a well-known entertainment agent, having represented superstars such as Andy Lau for almost ten years. Mr. Jin is currently
the president of Zhongshi Culture Communication Co., Ltd, which he founded in 2015. Mr. Jin was also appointed as a member of the Audit
Committee of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Board currently consists of five (5) members.
Each director will serve until the next annual meeting of shareholders of the Company or until removed by other actions, in accordance
with the Company&rsquo;s bylaws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Huidan Li and Sun Lei are spouses. No other family
relationship exists between any of the persons named above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><A NAME="g_030"></A><FONT STYLE="font-size: 10pt"><B>B. Compensation
</B></FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the year ended December 31, 2022, we did
not paid cash as compensation to our directors and executive officers as a group. We do not set aside or accrue any amounts for pension,
retirement or other benefits for our directors and senior management. However, we reimburse our directors for out-of-pocket expenses
incurred in connection with their services in such capacity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the year ended December 31, 2022, we granted
100,000 shares to our Chief Executive Officer, Interim Financial Officer, Co-chairwoman and director, pursuant to the employment agreement
entered into and executed on June 22, 2021. The 2021 Employment Agreement provided, in pertinent terms, that if the Company reaches its
annual revenue of US$50,000,000, as reported in the Company&rsquo;s 2021 annual report on Form 20-F for the fiscal year end December
31, 2021, Sun Lei will receive 100,000 shares of the Company&rsquo;s Common Stock as her stock compensation. The CEO Employment Agreement
and the issuance of the Shares have been previously approved by the Board and by the written consent of a majority of stockholders of
the voting power of the Company. The Shares bear the restrictive legend, as issued without registration under the Securities Act of 1933,
as amended (the &ldquo;Securities Act&rdquo;), in reliance upon an exemption under Section 4(a)(2) of the Securities Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the year ended December 31, 2022, we
granted under our 2022 Equity Incentive Plan, as amended, an aggregate of 30,000 shares of our Common Stock to our executive
officers and directors as compensation for their services. Each share had the value of $22.80.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The grants to the Company&rsquo;s executive officers
and directors were as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Ruifeng
                                            Mu, Director, was granted 10,000 shares;</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Jin
                                            Yan, Director, was granted 10,000 shares</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Huidan
                                            Li, Co-chairman and director, was granted 10,000 shares</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The total compensation to Directors and Executives
as a group is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left; font-weight: bold">Directors and Executives</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Shares issued</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Total compensation (including cash)</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%">Sun Lei</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">100,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">2,280,000,</FONT></TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Huidan Li</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">228,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Ruifeng Mu</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">228,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Jin Yan</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">228,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>2018 Equity Incentive Plan</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On December 24, 2018, the Board of Directors of the Company adopted
the 2018 Equity Incentive Plan, or the 2018 Plan, pursuant to which the Company could offer up to two hundred thousand (200,000) shares
of Common Stock as equity incentives to its directors, employees and consultants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>2022 Equity Incentive Plan</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On January 11, 2022, we terminated the 2018 equity
incentive plan and adopted the new equity incentive plan (the &ldquo;2022 Plan&rdquo;). We have advised the recipients of awards under
our equity incentive plan to handle relevant foreign exchange matters in accordance with the Stock Incentive Plan Notice. However, we
cannot guarantee that all employee awarded equity-based incentives can successfully register with SAFE in full compliance with the Stock
Incentive Plan Notice.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>The New 2022 EIP</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On October 26, 2022, the Board terminated the
2022 Plan and adopted the New 2022 EIP with 4,000,000 maximum authorized shares of Common Stock for issuance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following paragraphs summarize the terms of
the New 2022 EIP</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Purpose.</I> The purposes of the New 2022 EIP
are to promote the long-term growth and profitability of the Company and its affiliates by stimulating the efforts of employees, directors
and consultants of the Company and its affiliates who are selected to be participants, aligning the long-term interests of participants
with those of shareholders, heightening the desire of participants to continue in working toward and contributing to our success, attracting
and retaining the best available personnel for positions of substantial responsibility, and generally providing additional incentive for
them to promote the success of our business through the grant of awards of or pertaining to our Common Stock. The New 2022 EIP permits
the grant of ISOs, NSOs, Restricted Shares, Restricted Share Units, Share Appreciation Rights, Performance Units and Performance Shares
as the administrator of the New 2022 EIP may determine.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Administration</I>. The New 2022 EIP is administered
by our Board. The administrator has the authority to determine the specific terms and conditions of all awards granted under the New 2022
EIP, including, without limitation, the number of shares of common stock subject to each award, the price to be paid for the shares and
the applicable vesting criteria. The administrator has the discretion to make all other determinations necessary or advisable for the
administration of the New 2022 EIP.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Eligibility</I>. NSOs, Restricted Shares, Restricted
Share Units, Share Appreciation Rights, Performance Units and Performance Shares may be granted to employees, directors or consultants
either alone or in combination with any other awards. ISOs may be granted only to employees of the Company, and of any parent or subsidiary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Shares Available for Issuance Under the New
2022 EIP</I>. Subject to adjustment as described below, (a) the maximum aggregate number of shares that may be issued under the New 2022
EIP is 4,000,000 shares of Common Stock, (b) to the extent consistent with Section 422 of the Internal Revenue Code of 1986, as amended
(the &ldquo;Code&rdquo;), Subject to the certain provisions of the New 2022 EIP, including but not limited to, the reorganizations, combinations,
mergers, &nbsp;to the extent consistent with Section 422 of the Code, up to an aggregate of ten million (10,000,000) shares may be issued
as ISOs under the New 2022 EIP; only employees of the Company or any parent or subsidiary shall be eligible for the grant of ISOs; for
awards denominated in Shares and satisfied in cash, the maximum Award to any individual participant of the New 2022 EIP in the aggregate
in any one fiscal year of the Company shall not exceed the Fair Market fair market value of one hundred (100,000) shares on the Grant
Date. The number and class of shares available under the New 2022 EIP are subject to adjustment in the event of certain reorganizations,
mergers, combinations, recapitalizations, share splits, share dividends, or other similar events which change the number or kind of shares
outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Transferability.</I> Unless otherwise provided
in the New 2022 EIP or otherwise determined by the administrator, an award may not be sold, pledged, assigned, hypothecated, transferred,
or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of
the participant, only by the participant. However, the administrator may, at or after the grant of an award other than an ISO, provide
that such award may be transferred by the recipient to a &ldquo;family member&rdquo; (as defined in the New 2022 EIP); provided, however,
that any such transfer is without payment of any consideration whatsoever and that no transfer shall be valid unless first approved by
the administrator, acting in its sole discretion, and as required by our Restated Articles . If the administrator makes an award transferable,
such award will contain such additional terms and conditions as the administrator deems appropriate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Termination of, or Amendments to, the New 2022
EIP</I>. The Board may at any time amend, alter, suspend or terminate the 2022 Plan, provided that the Company will obtain shareholder
approval of any amendment to the extent necessary and desirable to comply with applicable Laws. No amendment, alteration, suspension or
termination of the New 2022 EIP will impair the rights of any participant, unless mutually agreed otherwise between the participant and
the administrator, which agreement must be in writing and signed by the participant and the Company. Termination of the New 2022 EIP will
not affect the administrator&rsquo;s ability to exercise the powers granted to it hereunder with respect to awards granted prior to the
date of such termination.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The New 2022 EIP will terminate ten years following
the date it was adopted by the Board, unless sooner terminated by the Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Employment Agreements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">With the exception of Sun Lei, we have not entered
into any fixed compensation arrangements with any of our directors.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On July 12, 2022, the Company entered into the
2022 Employment Agreement with Sun Lei. The 2022 Employment Agreement has a term of one (1) year. Pursuant to the terms of the 2022 Employment
Agreement, Sun Lei shall receive cash compensation of USD1.00 and stock compensation, the amount of which will be based upon the Company&rsquo;s
achievements, as to be reported on this Annual Report for the fiscal year ended December 22, 2022.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 88%; font-weight: bold; text-align: left">Company Revenue</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 11%; font-weight: bold; text-align: center">Number of <BR> Common Stock</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>US$59,000,0000 - US$99,999,999</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">2,500 Shares</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">US$100,000,000 or more</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">5,000 Shares</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Profit (Loss) Margin from Operation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">A 5% - 9% improvement compared to 2021</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">5,000 Shares</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">A 10% - 19% improvement compared to 2021</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">7,5000 Shares</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">A 20% or more improvement compared to 2021</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">10,000 Shares</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Profit from Non-Menswear operation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Achieve profitability on an adjusted basis</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">5,000 Shares</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Employment Agreement has been approved by
unanimous written consent of the Board and by written consent of holders of a majority of the total issued and outstanding capital stock
of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><A NAME="g_031"></A><FONT STYLE="font-size: 10pt"><B>C.
Board Practices</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our board of directors currently consists of five
members, namely Sun Lei, Huidan Li, Mu Ruifeng, Jin Yan, and Baojun Zhu.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Board has established the Audit Committee,
which is comprised entirely of independent directors. From time to time, the Board may establish other committees.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I><U>Audit Committee</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Audit Committee is currently composed of three
members: Baojun Zhu, Mu Ruifeng, and Jin Yan. Our Board of Directors determined that each member of the Audit Committee meets the independence
criteria prescribed by applicable regulation and the rules of the SEC for audit committee membership. Each Audit Committee member also
meets NASDAQ&rsquo;s financial literacy requirements. Mu Ruifeng serves as Chair of the Audit Committee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Board of Directors has determined that Mr.
Mu Ruifeng is the &ldquo;audit committee financial expert&rdquo; as such term is defined in Item 407(d) of Regulation S-K promulgated
by the SEC and also meets NASDAQ&rsquo;s financial sophistication requirements.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Audit Committee oversees our accounting and
financial reporting processes and the audits of the financial statements of our Company. The Audit Committee is responsible for, among
other things:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">the appointment, compensation, retention and oversight of the work of the independent auditor;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">reviewing and pre-approving all auditing services and permissible non-audit services (including the fees and terms thereof) to be performed by the independent auditor;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">reviewing and approving all proposed related-party transactions;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">discussing the interim and annual financial statements with management and our independent auditors;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">reviewing and discussing with management and the independent auditor (a) the adequacy and effectiveness of the Company&rsquo;s internal controls, (b) the Company&rsquo;s internal audit procedures, and (c) the adequacy and effectiveness of the Company&rsquo;s disclosure controls and procedures, and management reports thereon;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">reviewing reported violations of the Company&rsquo;s code of conduct and business ethics; and</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">reviewing and discussing with management and the independent auditor various topics and events that may have significant financial impact on the Company or that are the subject of discussions between management and the independent auditors.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><A NAME="g_032"></A><FONT STYLE="font-size: 10pt"><B>D.
Employees</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2022, we employed 55 full-time
employees. The following table sets forth the number of our full-time employees by function.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: black 1.5pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Function</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Number of <BR>
Employees</B></FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 88%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management and Administration</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">6</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Finance</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Business Development</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">14</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">IT R&amp;D</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">33</FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>TOTAL</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 4.5pt double">&nbsp;</TD>
    <TD STYLE="border-bottom: black 4.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">55</FONT></TD>
    <TD>&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We believe that we have maintained a satisfactory
working relationship with our employees, and we have not experienced any significant labor disputes or any difficulty in recruiting staff
for company&rsquo;s operations. None of company&rsquo;s employees is represented by a labor union.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our employees in China participate in a state
pension plan organized by Chinese municipal and provincial governments. In addition, the company is required by Chinese law to cover employees
in China with various types of social insurance. See &ldquo;Item 3. Key Information&mdash;D. Risk Factors&mdash;Risks Related to Doing
Business in China&mdash; Our failure to fully comply with PRC laws relating to social insurance and housing accumulation fund may expose
it to potential administrative penalties.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><A NAME="g_033"></A><FONT STYLE="font-size: 10pt"><B>E.
Share Ownership</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The following table
lists, as of May 12, 2023, the number of shares of common stock beneficially owned by (i) each person, entity or group (as that term
is used in Section 13(d)(3) of the Securities Exchange Act of 1934) known to the Company to be the beneficial owner of more than 5% of
the outstanding common stock; (ii) each of our directors (iii) each of our Named Executive Officers and (iv) all executive officers and
directors as a group. Information relating to beneficial ownership of common stock by our principal stockholders and management is based
upon information furnished by each person using &ldquo;beneficial ownership&rdquo; concepts under the rules of the SEC. Under these rules,
a person is deemed to be a beneficial owner of a security if that person directly or indirectly has or shares voting power, which includes
the power to vote or direct the voting of the security, or investment power, which includes the power to dispose or direct the disposition
of the security. 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. Under the SEC rules, more than one person may be deemed to be a beneficial owner of the same securities, and
a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary interest.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Except as noted below,
each person has sole voting and investment power with respect to the shares beneficially owned and each stockholder&rsquo;s address is c/o JX
Luxventure Limited, Bin Hai Da Dao No. 270, Lang Qin Wan Guo Ji Du Jia Cun Zong He Lou, Xiu Ying District, Haikou City, Hainan Province
570100, People&rsquo;s Republic of China.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></P>

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    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The percentages below
are calculated based on 6,063,192 shares of common stock issued and outstanding as of May 12, 2023.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1.5pt solid">Name</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Office, If Any</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; border-bottom: Black 1.5pt solid; vertical-align: bottom; font-weight: bold; text-align: center">Title of<BR> Class</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Amount and<BR> Nature of<BR> Beneficial<BR> Ownership</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; border-bottom: Black 1.5pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><FONT STYLE="font-size: 10pt"><B>Percent of<BR> Class<SUP>(3)</SUP>&nbsp;</B></FONT></TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Officers and Directors</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="white-space: nowrap; text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; width: 47%; vertical-align: top">Sun Lei</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 18%; text-align: left">Chief Executive Officer, Interim Chief Financial Officer, Co-Chairwoman&nbsp;and&nbsp;Director</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; vertical-align: top; width: 9%; text-align: left">Common Stock</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">316,310
</FONT></TD><TD STYLE="white-space: nowrap; width: 1%; text-align: left"><SUP>(1)(2)</SUP></TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">9.7</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Huidan Li</TD><TD>&nbsp;</TD>
    <TD>Co-Chairman</TD><TD>&nbsp;</TD>
    <TD STYLE="white-space: nowrap; vertical-align: top; text-align: left">Common Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">*</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Baojun Zhu</TD><TD>&nbsp;</TD>
    <TD>Director</TD><TD>&nbsp;</TD>
    <TD STYLE="white-space: nowrap; vertical-align: top; text-align: left">Common Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Mu Ruifeng</TD><TD>&nbsp;</TD>
    <TD>Director</TD><TD>&nbsp;</TD>
    <TD STYLE="white-space: nowrap; vertical-align: top; text-align: left">Common Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">*</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Jin Yan</TD><TD>&nbsp;</TD>
    <TD>Director</TD><TD>&nbsp;</TD>
    <TD STYLE="white-space: nowrap; vertical-align: top; text-align: left">Common Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">*</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">All current officers and directors as a group (5 persons named above)</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="white-space: nowrap; vertical-align: top; text-align: left">Common Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">366,310</TD><TD STYLE="white-space: nowrap; text-align: left"><SUP>(1)(2)</SUP></TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">10.4</TD><TD STYLE="white-space: nowrap; font-weight: bold; text-align: left">%<SUP>(4)</SUP></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">5% Security Holders</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="white-space: nowrap; text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD>None</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="white-space: nowrap; text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 0px"></TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">*</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Less than 1%</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">(1)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Includes 20,989 shares of common stock held by Happy Brilliance Limited, a Cayman Islands company in which Sun Lei, our Chief Executive Officer, interim Chief Financial Officer, Co-Chairwoman and Director, has the sole voting and dispositive power</FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">(2)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Does not include (i)124,000 shares of common stock issuable upon conversion of 1,240,000 shares of Series A Preferred Stock; (ii) 75,000 shares of common stock issuable upon conversion of 150,000 shares of Series C Convertible Preferred Stock; and (iii) 104,000 shares of common stock issuable upon conversion of 80,000 shares of Series D Preferred Stock. All shares of preferred stock vote together with common stock on an as-converted basis</FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">(3)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">The percentage is calculated based upon Ms. Lei&rsquo;s sole voting
and dispositive power over 619,310 shares of common stock, including 303,000 shares of common stock issuable upon conversion of shares
of Series A, C and D Preferred Stock</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><A NAME="g_034"></A><B>ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY
TRANSACTIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><A NAME="g_035"></A><FONT STYLE="font-size: 10pt"><B>A.
Major Shareholders</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Please refer to Item 6 &ldquo;Directors, Senior
Management and Employees&mdash;E. Share Ownership.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><A NAME="g_036"></A><FONT STYLE="font-size: 10pt"><B>B.
Related Party Transactions</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On May 22, 2022, the Board granted 100,000
shares of the Company&rsquo;s Common Stock to Sun Lei pursuant to the employment agreement between the Company and Sun Lei dated June
22, 2021 (the &ldquo;2021 Employment Agreement&rdquo;). The 2021 Employment Agreement provided, in pertinent terms, that if the Company
reaches its annual revenue of US$50,000,000, as reported in the Company&rsquo;s 2021 annual report on Form 20-F for the fiscal year end
December 31, 2021, Sun Lei will receive 100,000 shares of the Company&rsquo;s Common Stock as her stock compensation. The CEO Employment
Agreement and the issuance of the Shares have been previously approved by the Board and by the written consent of a majority of stockholders
of the voting power of the Company. The Shares bear the restrictive legend, as issued without registration under the Securities Act of
1933, as amended (the &ldquo;Securities Act&rdquo;), in reliance upon an exemption under Section 4(a)(2) of the Securities Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">On June 22, 2022, the Board authorized a share repurchase program of
up to US$5,000,000 of the Company&rsquo;s common stock from time to time during a 12-month period by Mr. Lei, our Chief Executive Officer
of Company (the &ldquo;Share Repurchase Program&rdquo;). Pursuant to the Repurchase Program, Mrs. Lei will not sell the shares in the
public market for at least two years. As of the date of this Annual Report, Ms. Lei completed the Repurchase Program. Purchase to the
Repurchase Program, on March 28, 2023, she acquired in private negotiated transactions 152,000 shares of Common Stock, at the total purchase
price of $1,780,000; 1,240,000 shares of Series A Convertible Preferred Stock, convertible into 124,000 shares of Common Stock at the
total purchase price of $1,240,000; and 80,000 shares of Series D Convertible Preferred Stock, convertible into 104 shares of Common Stock
at the purchase price of $2,080,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On July 12, 2022, the Company entered into a new
Employment Agreement with Sun Lei. The Employment Agreement has a term of one (1) year. Pursuant to the terms of the Employment Agreement,
Sun Lei shall receive cash compensation of USD1.00 and stock compensation, the amount of which will be based upon the Company&rsquo;s
achievements, as to be reported on this Annual Report for the fiscal year ended December 22, 2022.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 49%; font-weight: bold; text-align: left">Company Revenue</TD><TD STYLE="width: 2%; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 49%; font-weight: bold; text-align: left">Number of Common Stock</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>US$59,000,0000 - US$99,999,999</TD><TD>&nbsp;</TD>
    <TD>2,500 Shares</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">US$100,000,000 or more</TD><TD>&nbsp;</TD>
    <TD>5,000 Shares</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Profit (Loss) Margin from Operation</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">A 5% - 9% improvement compared to 2021</TD><TD>&nbsp;</TD>
    <TD>5,000 Shares</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">A 10% - 19% improvement compared to 2021</TD><TD>&nbsp;</TD>
    <TD>7,5000 Shares</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">A 20% or more improvement compared to 2021</TD><TD>&nbsp;</TD>
    <TD>10,000 Shares</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Profit from Non-Menswear operation</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Achieve profitability on an adjusted basis</TD><TD>&nbsp;</TD>
    <TD>5,000 Shares</TD></TR>
  </TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Employment Agreement has been approved by
unanimous written consent of the Board and by written consent of holders of a majority of the total issued and outstanding capital stock
of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><A NAME="g_037"></A><FONT STYLE="font-size: 10pt"><B>C.
Interests of Experts and Counsel</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><A NAME="g_038"></A><B>ITEM 8. FINANCIAL INFORMATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><A NAME="g_039"></A><FONT STYLE="font-size: 10pt"><B>A.
Consolidated Statements and Other Financial Information</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Financial Statements</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have appended consolidated financial statements
filed as part of this report. See Item 18 &ldquo;Financial Statements.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Legal Proceedings</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We may be subject to legal proceedings, investigations
and claims incidental to the conduct of our business from time to time. We are currently not party to any legal or arbitration proceedings,
including those relating to bankruptcy, receivership or similar proceedings and those involving any third party, which may have, or have
had in the recent past, significant effects on our financial position or profitability.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Dividend Policy</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To date, we have not paid any cash dividends on
our shares. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are a holding company incorporated in the Marshall
Islands. As a Marshall Islands company, we may only declare and pay dividends except when the corporation is insolvent or would thereby
be made insolvent or when the declaration or payment would be contrary to any restrictions contained in our Restated Articles. Dividends
may be declared and paid out of surplus only; but in case there is no surplus, dividends may be declared or paid out of the net profits
for the fiscal year in which the dividend is declared and for the preceding fiscal year. We currently anticipate that we will retain any
available funds to finance the growth and operation of our business and we do not anticipate paying any cash dividends in the foreseeable
future. Additionally, our cash held in foreign countries may be subject to certain control limitations or repatriation requirements, limiting
our ability to use this cash to pay dividends.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">PRC regulations may restrict the ability of our
PRC subsidiaries to pay dividends to us. See &ldquo;<I>Risk Factors&mdash;Risks Related to Doing Business in China</I>.&rdquo; We may
rely on dividends paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability
of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our board of directors has discretion as to whether
to distribute dividends, subject to above-referenced restrictions under Marshall Islands law. Even if our board of directors decides to
pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, the
amount of distribution, if any, received by us from our subsidiaries, general financial condition, contractual restrictions and other
factors that the board of directors may deem relevant. Please see the section entitled &ldquo;<I>PRC Regulations - Taxation</I>&rdquo;
for information on the potential tax consequences of any cash dividends declared.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><A NAME="g_040"></A><FONT STYLE="font-size: 10pt"><B>B.
Significant Changes</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">No significant change has occurred since the date
of our consolidated financial statements filed as part of this annual report.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><A NAME="g_041"></A><B>ITEM 9. THE OFFER AND LISTING</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><A NAME="g_042"></A><FONT STYLE="font-size: 10pt"><B>A.
Offer and Listing Details</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Common Stock is listed on the NASDAQ Capital
Market and trade under the symbol &ldquo;JXJT&rdquo; since October 10, 2022. Between January November 3, 2014 and October 7, 2021, our
Common Stock was traded on the NASDAQ Capital Market under the symbol &ldquo;KBSF, and between October 8, 2021 and October 9, 2022, our
Common Stock was traded on the Nasdaq under the symbol &ldquo;LLL.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 3, 2017, a special shareholder
meeting was held at the Company&rsquo;s headquarters in China and at the meeting, our shareholders approved a proposal to grant discretionary
authority to the Board of Directors of the Company to effect a reverse stock split of issued and outstanding shares of Common Stock at
a ratio within the range from one-for-two up to one-for-twenty; and determine whether to pay in cash the fair value of fractions of a
share of Common Stock as of the time when those entitled to receive such fractions are determined or to entitle shareholders to receive,
in lieu of any fractional share, the number of shares of Common Stock rounded up to the next whole number. On February 3, 2017, after
the special shareholder meeting, our Board of Directors approved a one-for-fifteen reverse stock split of the Company&rsquo;s issued and
outstanding Common Stock. In addition, in lieu of issuing any fractional share, the Board of Directors decided that shareholders are entitled
to receive the number of shares of Common Stock rounded up to the next whole number. Our Common Stock began trading on the NASDAQ Stock
Market on a split-adjusted basis when the market opened on February 9, 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 24, 2023, the Board and holders of a
majority of the Company&rsquo;s voting power, approved, by written consent in lieu of a meeting (a) a reverse stock split of the Company&rsquo;s
outstanding Common Stock in a ratio of not less than 1-for-5 and not more than 1-for-15 (the &ldquo;Split Range&rdquo;) and granted the
Board the ultimate authority to determine the exact split ratio of the reverse stock split within the Split Range, and (b) the form, terms,
and provisions of an Amendment to the Amended and Restated Articles of Incorporation (the &ldquo;Amendment&rdquo;). On April 17, 2023,
the Board determined that, based on the market price of the Company&rsquo;s Common Stock, a 1-for-10 split ratio would be appropriate
(the &ldquo;Reverse Stock Split&rdquo;). On April 25, 2023, the Company filed the Amendment to the Restated Articles with the Registrar
or Deputy Registrar of Corporations in the Marshall Islands, implementing the Reverse Stock Split. Upon the opening of the market on April
26, 2023, the Company&rsquo;s common stock began trading on the Nasdaq Capital Market on a post-split basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Approximate Number of Holders of Our Securities</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On May 12, 2023, there were approximately 372
shareholders of record of our Common Stock and 1 holder of record of our Preferred Stock. Certain of our securities are held in nominee
or street name so the actual number of beneficial owners of our securities is greater than the number of record holders set forth above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><A NAME="g_043"></A><FONT STYLE="font-size: 10pt"><B>B.
Plan of Distribution</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><A NAME="g_044"></A><FONT STYLE="font-size: 10pt"><B>C.
Markets</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">See our disclosures above under &ldquo;A. Offer
and Listing Details.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><A NAME="g_045"></A><FONT STYLE="font-size: 10pt"><B>D.
Selling Shareholders</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><A NAME="g_046"></A><FONT STYLE="font-size: 10pt"><B>E.
Dilution</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><A NAME="g_047"></A><FONT STYLE="font-size: 10pt"><B>F.
Expenses of the Issue</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><A NAME="g_048"></A><B>ITEM 10. ADDITIONAL INFORMATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><A NAME="g_049"></A><FONT STYLE="font-size: 10pt"><B>A.
Share Capital</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Restated Articles of Incorporation, as amended, authorize the Company
to issue up to 155,000,000 shares with a par value of $0.0001, consisting of 150,000,000 shares of Common Stock and 5,000,000 shares of
Preferred stock. As of date of this report, 6,063,192 shares of Common Stock are issued and outstanding and 1,470,000 of Preferred Stock
are issued and outstanding, consisting of 1,240,000 shares of Series A Preferred; 150,000 shares of Series C Preferred, and 80,000 shares
of Series D Preferred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><A NAME="g_050"></A><FONT STYLE="font-size: 10pt"><B>B.
Memorandum and Articles of Association</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>The following represents a summary of certain
key provisions of our articles of incorporation and bylaws. The summary does not purport to be a summary of all of the provisions of our
articles of incorporation and bylaws. For more complete information you should read our amended and restated articles of incorporation,
as amended, and bylaws, each listed as an exhibit to this report.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We were incorporated in the Marshall Islands on
January 26, 2012 under the Marshall Islands Business Corporations Act (&ldquo;BCA&rdquo;). The purpose of the Company is to engage in
any lawful act or activity for which corporations may now or hereafter be organized under the BCA. Our amended and restated articles of
incorporation, as amended, and bylaws do not impose any limitations on the ownership rights of our stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Description of Common Stock</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Each outstanding share of Common Stock entitles
the holder to one vote on all matters submitted to a vote of stockholders. Upon our dissolution, liquidation or winding up of the affairs
of the Company, after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation
preferences, if any, the holders or our Common Stock will be entitled to receive pro rata our remaining assets available for distribution.
Holders of Common Stock do not have conversion, redemption or preemptive rights to subscribe to any of our securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Preferred Stock.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Board of Directors is authorized, without
any further vote or action by our stockholders, to issue up to 5,000,000 shares of preferred stock in different classes and series and,
with respect to each class or series, to determine the designations, powers, preferences, privileges and other rights, including dividend
rights, conversion rights, terms of redemption and liquidation preferences, any or all of which may be greater than the powers and rights
associated with the common stock, at such times and on such other terms as they think proper. Our Board of Directors may issue shares
of preferred stock on terms calculated to discourage, delay or prevent a change of control of our company or the removal of our management.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Designations of our Preferred Stock.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Series A Convertible Preferred Stock </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On April 8, 2021, our Board of Directors,
acting by unanimous written consent, in accordance with Section 35 of the BCA, duly adopted the resolutions creating a new series of
preferred stock, par value $0.0001 per share (&ldquo;Preferred Stock&rdquo;), designated as &ldquo;Series A Convertible Preferred
Stock&rdquo; and adopted the Certificate of Designations of the Series A Convertible Preferred Stock (the &ldquo;Certificate of
Designations of Series A&rdquo;) which authorized for issuance 1,500,000 shares of Series A Convertible Preferred Stock and had the
stated initial stated value of US$1.00 per share (the &ldquo;Series A Preferred&rdquo;). On April 8, 2021, the Company offered and
sold 1,500,000 shares of the Series A Preferred to a single investor for total subscription proceeds of $1,500,000. On April 20,
2022, our Board adopted resolutions, by unanimous written consent, pursuant to Section 35 of the BCA, in which it determined that
the Certificate of Designation of Series A&rdquo;) was not filed with the Registrar of Corporations, in accordance with the
provisions of sections 35 and 5 of the BCA at the time the Certificate of Designation of Series A Preferred was approved by the
Board, and that it is in the best interests of the Corporation and its stockholders to correct the file the Certificate of
Designation of Series A Preferred with the Registrar of Corporations, to correct an administrative oversight. On April 25, 2022, the
Company filed the Certificate of Designations of Series A Preferred with the Registrar of Corporations under the Company&rsquo;s
former name, KBS Fashion Group Limited, and on April 27, 2022, the Company filed with the Registrar of Corporations the First
Amended and Restated Certificate of Designations of Series A, reflecting the Company&rsquo;s current name &ldquo;JX Luxventure
Limited&rdquo; and restating all provisions set forth in the Certificate of Designations of Series A Preferred. Pursuant to this
unanimous written consent dated April 20, 2022, the Board of Directors ratified and confirmed to treat the investor that purported
to have been issued 1,500,000 shares of Series A economically, as if such holder (the &ldquo;Holder&rdquo;) has been the holder of
1,500,000 shares of Series A since April 8, 2021, the date of the purported issuance of Series A Preferred, rather than the date of
the filing of the Certificate of Series A Preferred and the First Amended and Restated Certificate of Series A Preferred with the
Registrar of Corporations. On May 10, 2022, the Company filed with the Registrar of Corporations the Second Amended and Restated
Certificate of Designation of Series A Preferred. As set forth in the Second Amended and Restated Certificate of Series A Preferred,
it features a stated value of $1.00 and is convertible to shares of our Common Stock at any time from the date of issue. Conversions
are limited, however, such that no conversion may made to the extent that the number of shares of Common Stock to be issued pursuant
to such conversion, when aggregated with all other shares of Common Stock owned by the Holder at such time, would result in the
Holder beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act and the rules thereunder) in excess
of 9.99% of our then issued and outstanding shares of Common Stock. Series A Convertible Preferred Stock votes together with holders
of shares of Common Stock on an as-if-converted basis, has no special dividend rights, and ranks equally to our common stock with
respect to rights upon liquidation. All shares of Common Stock issuable upon conversion of the Series A Preferred are subject to a
two-year lock-up agreement running from the initial closing of the financing. Our offer and sale of the Series A Preferred was
exempt under Rule 506(b) under Regulation D, as it did not involve any general solicitation or advertising and was made to an
accredited investor within the meaning of Rule 501 under Regulation D. On May 10, 2022, the Holder converted 260,000 shares of
Series A Preferred into 26,000 shares of Common Stock. On the date of this Annual Report, there are 1,240,000 shares of Series A
Preferred issued and outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Series B Participating Preferred Stock and
Rights Dividend</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On March 12, 2021, we announced the authorization
and declaration of a dividend distribution of one right (a &ldquo;Right&rdquo;) for each outstanding share of Common Stock, par value
$0.0001 per share, of the Company to stockholders of record as of the close of business on March 31, 2021 (the &ldquo;Record Date&rdquo;).
Each Right entitles the registered holder to purchase from the Company one 0.00667 portion of a share of Series B Participating Preferred
Stock, par value $0.0001 per share (the &ldquo;Preferred Stock&rdquo;), of the Company at an exercise price of $50.00 (the &ldquo;Exercise
Price&rdquo;). The complete terms of the Rights are set forth in a Preferred Stock Rights Agreement (the &ldquo;Rights Agreement&rdquo;),
dated as of March 11, 2021, between the Company and American Stock Transfer &amp; Trust Company, LLC, as rights agent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Board of Directors adopted the Rights Agreement
to protect stockholders from coercive or otherwise unfair takeover tactics. In general terms, it works by imposing a significant penalty
upon any person or group that acquires 15% or more of the Company&rsquo;s Common Stock without the approval of the Board. As a result,
the overall effect of the Rights Agreement and the issuance of the Rights may be to render more difficult or to discourage a merger, tender
or exchange offer or other business combination involving the Company that is not approved by the Board. However, neither the Rights Agreement
nor the Rights should interfere with any merger, tender or exchange offer or other business combination approved by our Board. On April
20, 2022, our Board adopted resolutions, by unanimous written consent, pursuant to Section 35 of the BCA, in which it determined that
the Certificate of Designation of Series B Participating Preferred Stock was not filed with the Registrar of Corporations, in accordance
with the provisions of sections 35 and 5 of the BCA at the time the Certificate of Designation of Series B Participating Preferred Stock
was approved by the Board, and that it is in the best interests of the Corporation and its stockholders to correct the file the Certificate
of Designation of Series B Participating Preferred Stock with the Registrar of Corporations, to correct an administrative oversight. On
April 25, 2022, the Company filed the Certificate of Designation of Series B Participating Preferred Stock with the Registrar of Corporations
under the Company&rsquo;s former name, and on April 27, 2022, we filed the Amended and Restated Certificate of Designation of Series B
Participating Stock with the Registrar of Corporations reflecting the Company&rsquo;s current name.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Series C Convertible Preferred Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On September 1, 2021, our Board, acting by unanimous
written consent, in accordance with Section 35 of the BCA, duly adopted the resolutions creating a new series of Preferred Stock, designated
as &ldquo;Series C Convertible Preferred Stock&rdquo; and adopted the Certificate of Designations of the Series C Convertible Preferred
Stock (the &ldquo;Certificate of Designations of Series C&rdquo;) which authorized for issuance 150,000 shares of Series C Convertible
Preferred Stock and had the stated initial stated value of US$10.00 per share (the &ldquo;Series C Preferred&rdquo;). On September 1,
2021, the Company sold 150,000 shares of the Series C Preferred for total subscription proceeds of $1,500,000 to Sun Lei, our Chief Executive
Officer and a member of our board. Our Series C Convertible Preferred Stock features a stated value of $10.00 and is convertible to shares
of our Common Stock at any time after 6 months from the date of issue. On April 20, 2022, our Board adopted resolutions, by unanimous
written consent, pursuant to Section 35 of the BCA, in which it determined that the Certificate of Designation of Series C Preferred was
not filed with the Registrar of Corporations, in accordance with the provisions of sections 35 and 5 of the BCA at the time the Certificate
of Designation of Series C Preferred was approved by the Board, and that it is in the best interests of the Corporation and its stockholders
to correct the file the Certificate of Designation of Series C Preferred with the Registrar of Corporations, to correct an administrative
oversight. Pursuant to this unanimous written consent dated April 20, 2022, the Board of Directors ratified and confirmed to treat the
investor that purported to have been issued 150,000 shares of Series C economically, as if such holder (the &ldquo;Holder&rdquo;) has
been the holder of 150,000 shares of Series C Preferred since September 1, 2021, the date of the purported issuance of Series C Preferred,
rather than the date of the filing of the Certificate of Series C Preferred and the Amended and Restated Certificate of Series C Preferred
with the Registrar of Corporations. On April 25, 2022, the Company filed the Certificate of Designation of Series C Preferred with the
Registrar of Corporations under the Company&rsquo;s former name, and on April 27, 2022, we filed the Amended and Restated Certificate
of Designation of Series C Preferred with the Registrar of Corporations reflecting the Company&rsquo;s current name.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As stated in our Amended and Restated Certificate of Designation of
Series C Preferred, each share of Series C  Preferred is convertible into 5 shares of Common Stock, subject to adjustments resulting
from reverse stock splits. As a result of the 1-for-10 Reverse Stock Split, which became effective on April 26, 2023, two shares of the
Series C Preferred Stock is convertible into 1 share of Common Stock. Series C Preferred votes together with holders of Common Stock on
an as-if-converted basis, which is not exercisable for one year, has no special dividend rights, and ranks equally to our Common Stock
with respect to rights upon liquidation. All shares of Common Stock issuable upon conversion of the Series C Preferred are subject to
a one-year lock-up agreement running from the initial closing of the financing. Our offer and sale of the Series C Preferred was exempt
under Rule 506(b) under Regulation D, as it did not involve any general solicitation or advertising and was made to an accredited investor
within the meaning of Rule 501 under Regulation D.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Series D Convertible Preferred Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On October 18, 2021, our Board acting by unanimous written consent,
in accordance with Section 35 of the BCA, duly adopted the resolutions creating a new series of Preferred Stock, designated as &ldquo;Series
D Convertible Preferred Stock&rdquo; and adopted the Certificate of Designations of the Series D Convertible Preferred Stock (the &ldquo;Certificate
of Designations of Series D&rdquo;) which authorized for issuance 100,000 shares of Series D Convertible Preferred Stock and had the stated
initial stated value of US$39.00 per share (the &ldquo;Series D Preferred&rdquo;). On November 1, 2021, the Company offered and sold 100,000
shares of Series D Preferred to an accredited investor for the total gross proceeds of $3,900,000, in reliance upon Section 4(a)(2) of
the Securities Act. On April 20, 2022, our Board adopted resolutions, by unanimous written consent, pursuant to Section 35 of the BCA,
in which it determined that the Certificate of Designation of Series D Preferred was not filed with the Registrar of Corporations, in
accordance with the provisions of sections 35 and 5 of the BCA at the time the Certificate of Designation of Series D Preferred was approved
by the Board, and that it is in the best interests of the Corporation and its stockholders to correct the file the Certificate of Designation
of Series D Preferred with the Registrar of Corporations, to correct an administrative oversight. Pursuant to this unanimous written consent
dated April 20, 2022, the Board of Directors ratified and confirmed to treat the investor that purported to have been issued 100,000 shares
of Series D Preferred economically, as if such holder (the &ldquo;Holder&rdquo;) has been the holder of 100,000 shares of Series D Preferred
since November 1, 2021, the date of the purported issuance of Series D Preferred, rather than the date of the filing of the Certificate
of Series D Preferred and the Amended and Restated Certificate of Series D Preferred with the Registrar of Corporations. On April 25,
2022, the Company filed the Certificate of Designation of Series D Preferred with the Registrar of Corporations, and on April 27, 2022,
we filed the Amended and Restated Certificate of Designation of Series D Preferred with the Registrar of Corporations. As stated in the
Amended and Restated Certificate of Designation of Series D Preferred, shares of Series D Preferred vote together with holders of shares
of Common Stock on an as-if-converted basis; have no special dividend right, ranks equal to the Common Stock with respect to rights upon
liquidation and are convertible into shares of Common Stock on a 1 do 13 basis at any time following the issuance, subject to the adjustments
with respect to the reverse stock split, as a result of which each share of Series D Preferred Stock may be currently converted into 1.3
shares of Common Stock However, the conversion is limited to the extent that no conversion may occur if the number of shares of Common
Stock to be issued pursuant to such conversion, when aggregated with all other shares of Common Stock owned by the holder of such shares
at such time, would result in the holder beneficially owning (as determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended, and the rules thereunder) in excess of 9.99% of the then issued and outstanding shares of Common Stock. On May
2, 2022, the Holder converted 20,000 shares of Series D Preferred into 26,000 shares of Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Directors</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The business and affairs of the Company are managed
by or under the direction of our Board of Directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our directors are elected by the holders of the
shares representing a majority of the total voting power of the then-outstanding capital stock of the Company entitled to vote generally
in the election of directors (&ldquo;Voting Stock&rdquo;). Our Restated Articles provide that cumulative voting shall not be used to elect
directors. Each director will be elected to serve until the next annual meeting of shareholders and until his/her successor shall have
been duly elected and qualified, except in the event of his/her death, resignation, removal or the earlier termination of his/her term
of office.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Any director or the entire Board of Directors
may be removed at any time, with or without cause, by the affirmative vote of the holders of at least a majority of the total voting power
of the Voting Stock entitled to vote thereon or with cause by directors constituting at least two-thirds of the entire Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Vacancies in the Board of Directors occurring
by death, resignation, the creation of new directorships, the failure of the shareholders to elect the whole board at any annual election
of directors, or, except as herein provided, for any other reason, including removal of directors for cause, may be filled either by the
affirmative vote of a majority of the remaining directors then in office, although less than a quorum, at any special meeting called for
that purpose or at any regular meeting of the Board. Vacancies occurring by removal of directors without cause may be filled only by vote
of the shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Shareholder Meetings</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Annual stockholder meetings will be held at a
time and place selected by our board of directors. The meetings may be held in or outside of the Marshall Islands. Under our Restated
Articles, special meetings may be called by the board of directors, or by the secretary of the Company requested by stockholders representing
certain amount of voting power. Our board of directors shall give not less than 15 days and not more than 60 days prior written notice
of a shareholders&rsquo; meeting to each shareholder of record entitled to vote thereat and to each shareholder of record who, by reason
of any action proposed at such meeting would be entitled to have his/her shares appraised if such action were taken, and the notice shall
include a statement of that purpose and to that effect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our bylaws provide that a meeting of shareholders
is duly constituted if, at the commencement of the meeting, there are shareholders present in person or by proxy representing not less
than a majority of the votes of the shares issued and outstanding and entitled to vote on resolutions of shareholders to be considered
at the meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If a quorum is present, the affirmative vote of
a majority of the shares of stock represented at the meeting will be the act of the shareholders. At any meeting of shareholders, each
shareholder entitled to vote any shares on any manner to be voted upon at such meeting shall be entitled to one vote on such matter for
each such share. Any action required or permitted to be taken at a meeting, may be taken without a meeting if a consent in writing setting
forth the action so taken, is signed by all the shareholders entitled to vote with respect to the subject matter thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Dissenters&rsquo; Rights of Appraisal and
Payment.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under the BCA, our stockholders have the right
to dissent from various corporate actions, including any merger or sale of all or substantially all of our assets not made in the usual
course of our business, and receive payment of the fair value of their shares. However, the right of a dissenting stockholder to receive
payment of the fair value of his or her shares shall not be available for any shares of stock of the constituent corporation surviving
a merger if the merger did not require for its approval the vote of the stockholders of the surviving corporation. In the event of any
further amendment of our articles of incorporation, a stockholder also has the right to dissent and receive payment for his or her shares
if the amendment alters certain rights in respect of those shares. The dissenting stockholder must follow the procedures set forth in
the BCA to receive payment. In the event that we and any dissenting stockholder fail to agree on a price for the shares, the BCA procedures
involve, among other things, the institution of proceedings in the circuit court in the judicial circuit in the Marshall Islands in which
our Marshall Islands office is situated. The value of the shares of the dissenting stockholder is fixed by the court after reference,
if the court so elects, to the recommendations of a court-appointed appraiser.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Stockholders&rsquo; Derivative Actions</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under the BCA, any of our stockholders may bring
an action in our name to procure a judgment in our favor, also known as a derivative action, provided that the stockholder bringing the
action is a holder of common stock both at the time the derivative action is commenced and at the time of the transaction to which the
action relates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Indemnification of Officers and Directors</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The BCA authorizes corporations to limit or eliminate
the personal liability of directors and officers to corporations and their stockholders for monetary damages for breaches of directors&rsquo;
fiduciary duties. Our Restated Articles include a provision that eliminates the personal liability of directors for monetary damages for
actions taken as a director to the fullest extent permitted by law. We must indemnify our directors and officers to the fullest extent
authorized by law. We are also expressly authorized to advance certain expenses (including attorneys&rsquo; fees and disbursements and
court costs) to our directors and offices and carry directors&rsquo; and officers&rsquo; insurance providing indemnification for our directors,
officers and certain employees for some liabilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The limitation of liability and indemnification
provisions in our Restated Articles and bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their
fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers,
even though such an action, if successful, might otherwise benefit us and our stockholders. In addition, your investment may be adversely
affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification
provisions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><FONT STYLE="font-size: 10pt"><B><A NAME="g_051"></A>C.
Material Contracts</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have not entered into any material contracts
other than in the ordinary course of business and other than those described in Item 4 &ldquo;Information on the Company,&rdquo; Item
5 &ldquo;Operating and Financial Review and Prospects&mdash;F. Tabular Disclosure of Contractual Obligations,&rdquo; Item 7 &ldquo;Major
Shareholders and Related Party Transactions,&rdquo; or filed (or incorporated by reference) as exhibits to this annual report or otherwise
described or referenced in this annual report.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><FONT STYLE="font-size: 10pt"><B><A NAME="g_052"></A>D.
Exchange Controls</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Marshall Islands Exchange Controls</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under Marshall Islands law, there are currently
no restrictions on the export or import of capital, including foreign exchange controls or restrictions that affect the remittance of
dividends, interest or other payments to nonresident holders of our shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>BVI Exchange Controls</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There are no material exchange controls restrictions
on payment of dividends, interest or other payments to the holders of our common stock or on the conduct of our operations in the BVI,
where we were incorporated. There are no material BVI laws that impose any material exchange controls on us or that affect the payment
of dividends, interest or other payments to nonresident holders of our common stock. BVI law and our memorandum and articles of association
do not impose any material limitations on the right of non-residents or foreign owners to hold or vote our common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>PRC Exchange Controls</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Regulations on Foreign Currency Exchange</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under the PRC Foreign Currency Administration
Rules promulgated on January 29, 1996 and last amended on August 5, 2008 and various regulations issued by SAFE and other relevant PRC
government authorities, payment of current account items in foreign currencies, such as trade and service payments, payment of interest
and dividends can be made without prior approval from SAFE by following the appropriate procedural requirements. By contrast, the conversion
of RMB into foreign currencies and remittance of the converted foreign currency outside the PRC for the purpose of capital account items,
such as direct equity investments, loans and repatriation of investment, requires prior approval from SAFE or its local office.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On February 13, 2015, SAFE promulgated the Circular
on Simplifying and Improving the Foreign Currency Management Policy on Direct Investment, effective from June 1, 2015, which cancels the
requirement for obtaining approvals of foreign exchange registration of foreign direct investment and overseas direct investment from
SAFE. The application for the registration of foreign exchange for the purpose of foreign direct investment and overseas direct investment
may be filed with qualified banks, which, under the supervision of SAFE, may review the application and process the registration.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Circular of the SAFE on Reforming the Management
Approach regarding the Settlement of Foreign Capital of Foreign-invested Enterprise, or SAFE Circular 19, was promulgated on March 30,
2015 and became effective on June 1, 2015. According to SAFE Circular 19, a foreign-invested enterprise may, according to its actual business
needs, settle with a bank the portion of the foreign exchange capital in its capital account for which the relevant foreign exchange bureau
has confirmed monetary contribution rights and interests (or for which the bank has registered the account-crediting of monetary contribution).
For the time being, foreign-invested enterprises are allowed to settle 100% of their foreign exchange capitals on a discretionary basis;
a foreign-invested enterprise shall truthfully use its capital for its own operational purposes within the scope of business; where an
ordinary foreign-invested enterprise makes domestic equity investment with the amount of foreign exchanges settled, the invested enterprise
shall first go through domestic re-investment registration and open a corresponding Account for Foreign Exchange Settlement Pending Payment
with the foreign exchange bureau (bank) at the place of registration. The Circular of the SAFE on Reforming and Regulating Policies on
the Control over Foreign Exchange Settlement of Capital Accounts, or SAFE Circular 16, was promulgated and became effective on June 9,
2016. According to SAFE Circular 16, enterprises registered in PRC may also convert their foreign debts from foreign currency into Renminbi
on 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 self&mdash;discretionary basis, which applies to all
enterprises registered in the PRC. 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 and may not be used for investments
in securities or other investment with the exception of bank financial products that can guarantee the principal within the PRC unless
otherwise specifically provided. Besides, the converted Renminbi shall not be used to make loans for related enterprises unless it is
within the business scope or to build or to purchase any real estate that is not for the enterprise own use with the exception for the
real estate enterprise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On January 26, 2017, SAFE promulgated the Circular
on Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness and Compliance Verification, or SAFE Circular
3, which stipulates several capital control measures with respect to the outbound remittance of profits from domestic entities to offshore
entities, including (i) banks must check whether the transaction is genuine by reviewing board resolutions regarding profit distribution,
original copies of tax filing records and audited financial statements, and (ii) domestic entities must retain income to account for previous
years&rsquo; losses before remitting any profits. Moreover, pursuant to SAFE Circular 3, domestic entities must explain in detail the
sources of capital and how the capital will be used, and provide board resolutions, contracts and other proof as a part of the registration
procedure for outbound investment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Regulations on Foreign Exchange Registration
of Overseas Investment by PRC Residents</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">SAFE issued the Circular on Relevant Issues Relating
to Domestic Resident&rsquo;s Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37,
which became effective in July 2014, to replace the Circular of the State Administration of Foreign Exchange on Issues Concerning the
Regulation of Foreign Exchange in Equity Finance and Roundtrip Investments by Domestic Residents through Offshore Special Purpose Vehicles,
to regulate 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 or conduct round trip investment in China. SAFE Circular 37 defines a SPV as 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 onshore or offshore assets or interests, while &ldquo;round trip investment&rdquo; is defined as direct investment in
China by PRC residents or entities through SPVs, namely, establishing foreign-invested enterprises to obtain the ownership, control rights
and management rights. SAFE Circular 37 stipulates that, prior to making contributions into an SPV, PRC residents or entities be required
to complete foreign exchange registration with SAFE or its local branch. In addition, SAFE promulgated the Notice on Further Simplifying
and Improving the Administration of the Foreign Exchange Concerning Direct Investment in February 2015, which amended SAFE Circular 37
and became effective on June 1, 2015, requiring PRC residents or entities to register with qualified banks rather than SAFE in connection
with their establishment or control of an offshore entity established for the purpose of overseas investment or financing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">PRC residents or entities who had contributed
legitimate onshore or offshore interests or assets to SPVs but had not obtained registration as required before the implementation of
the SAFE Circular 37 must register their ownership interests or control in the SPVs with qualified banks. An amendment to the registration
is required if there is a material change with respect to the SPV registered, such as any change of basic information (including change
of the PRC residents, name and operation term), increases or decreases in investment amount, transfers or exchanges of shares, and mergers
or divisions. Failure to comply with the registration procedures set forth in SAFE Circular 37 and the subsequent notice, or making misrepresentation
on or failure to disclose controllers of the foreign-invested enterprise that is established through round-trip investment, may result
in restrictions being imposed on the foreign exchange activities of the relevant foreign-invested enterprise, 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. See &ldquo;Risk Factors&mdash;Risks Related to Doing Business in China&mdash;PRC regulations relating
to investments in offshore companies by PRC residents may subject our PRC-resident beneficial owners or our PRC subsidiary to liability
or penalties, limit our ability to inject capital into our PRC subsidiary or limit our PRC subsidiary&rsquo;s ability to increase their
registered capital or distribute profits.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Regulations on Stock Incentive Plans</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">SAFE promulgated the Notice on Issues Concerning
the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly Listed Company,
or the Stock Incentive Plan Notice, in February 2012, replacing the previous rules issued by SAFE in March 2007. Pursuant to the Stock
Incentive Plan Notice and other relevant rules and regulations, PRC residents participating in stock incentive plan in an overseas publicly-listed
company are required to register with SAFE or its local branches and follow certain other procedures. Participants of a stock incentive
plan who are PRC residents must conduct the SAFE registration and other procedures with respect to the stock incentive plan through a
qualified PRC agent, which could be a PRC subsidiary of the overseas publicly listed company or another qualified institution appointed
by the PRC subsidiary. In addition, the PRC agent is required to update the relevant SAFE registration should there be any material change
to the stock incentive plan, the PRC agent or other material changes. The PRC agent must, on behalf of the PRC residents who have the
right to exercise the employee stock options, apply to SAFE or its local branches for an annual quota for the payment of foreign currencies
in connection with the PRC residents&rsquo; exercise of the employee stock options. The foreign exchange proceeds received by the PRC
residents from the sale of shares under the stock incentive plans granted and dividends distributed by the overseas listed companies must
be remitted into the bank accounts in the PRC opened by the PRC agents prior to distribution to such PRC residents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We initially adopted an equity incentive plan
in 2018 under which we have the discretion to award incentives and rewards to eligible participants. On January 11, 2022, we terminated
the 2018 equity incentive plan and adopted the new equity incentive plan (the &ldquo;2022 Plan&rdquo;). On October 26, 2022, we terminated
the 2022 Plan and adopted the New 2022 EIP with 4,000,000 maximum authorized shares of Common Stock for issuance. We have advised the
recipients of awards under our equity incentive plan to handle relevant foreign exchange matters in accordance with the Stock Incentive
Plan Notice. However, we cannot guarantee that all employee awarded equity-based incentives can successfully register with SAFE in full
compliance with the Stock Incentive Plan Notice. See &ldquo;<I>Risk Factors&mdash;Risks Related to Doing Business in China</I>&rdquo;</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><A NAME="g_053"></A><FONT STYLE="font-size: 10pt"><B>E.
Taxation</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>The following is a general summary of the material
Marshall Islands, Hong Kong, BVI, PRC and U.S. federal income tax consequences relevant to an investment in our shares of common stock,
sometimes referred to collectively in this summary as our &ldquo;securities&rdquo;. The discussion is not intended to be, nor should it
be construed as, legal or tax advice to any particular prospective purchaser. The discussion is based on laws and relevant interpretations
thereof in effect as of the date of this Annual Report, all of which are subject to change or different interpretations, possibly with
retroactive effect. The discussion does not address United States state or local tax laws, or tax laws of jurisdictions other than the
Marshall Islands, Hong Kong, the BVI, the PRC and the United States. We recommend that you consult your own tax advisors with respect
to the consequences of acquisition, ownership and disposition of our securities.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Marshall Islands Taxation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following are the material Marshall Islands
tax consequences of our activities to us and to our stockholders of investing in our Common Stock. Under current Marshall Islands law,
we are not subject to tax on income or capital gains, and no Marshall Islands withholding tax or income tax will be imposed upon payments
of dividends by us to our stockholders or proceeds from the disposition of our Common Stock, provided such stockholders are not residents
in the Marshall Islands. There is no tax treaty between the United States and the Republic of the Marshall Islands.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>BVI Taxation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The BVI does not impose a withholding tax on dividends
paid to us by our BVI subsidiary, nor does the BVI levy any capital gains or income taxes on us or our BVI subsidiary. However, our BVI
subsidiary is required to pay the BVI government an annual license fee based on the number of shares it is authorized to issue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There is no income tax treaty or convention currently
in effect between the United States and the BVI.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Hong Kong Taxation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Hong Kong subsidiaries, under the current
laws of Hong Kong, are subject to profits tax of 16.5%. No provision for Hong Kong profits tax has been made as our Hong Kong subsidiaries
have no taxable income.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>PRC Taxation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are a holding company incorporated in the Marshall
Islands, which indirectly holds our equity interests in our PRC operating subsidiaries. The EIT Law and its implementation rules, both
of which became effective as of January 1, 2008, provide that a PRC enterprise is subject to a standard income tax rate of 25% and China-sourced
income of foreign enterprises, such as dividends paid by a PRC subsidiary to its overseas parent, will normally be subject to PRC withholding
tax at a rate of 10%, unless there are applicable treaties between the overseas parent&rsquo;s jurisdiction of incorporation and China
to reduce such rate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under the Arrangement between the Mainland and
the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to
Taxes on Income, or the Double Taxation Arrangement, effective as of January 1, 2007, such dividend withholding tax rate is reduced to
5% if a Hong Kong resident enterprise owns over 25% of the PRC company distributing the dividends. Under the aforesaid arrangement, any
dividends that our PRC operating subsidiaries pay to their Hong Kong holding companies may be subject to a withholding tax at the rate
of 5% if they are not considered to be a PRC &ldquo;resident enterprise&rdquo; as described below. However, if the Hong Kong holdings
companies are not considered to be the &ldquo;beneficial owner&rdquo; of such dividends under the Notice Regarding Interpretation and
Recognition of Beneficial Owners under Tax Treaties promulgated by the State Administration of Taxation on October 27, 2009 (and not a
PRC &ldquo;resident enterprise&rdquo;), such dividends would be subject to the withholding tax rate of 10%. The withholding tax rate of
5% or 10% applicable will have a significant impact on the amount of dividends to be received by us and ultimately by shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">According to the Notice Regarding Interpretation
and Recognition of Beneficial Owners under Tax Treaties, the term &ldquo;beneficial owner&rdquo; refers to a person who has the right
to own and dispose of the income and the rights or properties generated from the said income. The &ldquo;beneficial owner&rdquo; may be
an individual, a company or any other organization which is usually engaged in substantial business operations. A conduit company is not
a &ldquo;beneficial owner.&rdquo; The term &ldquo;conduit company&rdquo; refers to a company which is usually established for purposes
of dodging or reducing taxes, and transferring or accumulating profits. Such a company is only registered in the country of domicile to
satisfy the organizational form as required by law, but it does not engage in such substantial business operations as manufacturing, distribution
and management. As our Hong Kong holding companies are controlling companies and are not engaged in substantial business operations, they
could be considered as conduit companies by tax authorities and we do not expect them to be a beneficial owner.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition to the changes to the current tax
structure, under the EIT Law, an enterprise established outside of China with &ldquo;de facto management bodies&rdquo; within China is
considered a resident enterprise and will normally be subject to an EIT of 25% on its global income. The implementing rules define the
term &ldquo;de facto management bodies&rdquo; as &ldquo;an establishment that exercises, in substance, overall management and control
over the production, business, personnel, accounting, etc., of a Chinese enterprise.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">It remains unclear whether the PRC tax authorities
would require or permit our overseas registered entities to be treated as PRC resident enterprises. We do not currently consider our company
to be a PRC resident enterprise. However, if the PRC tax authorities determine that we are a &ldquo;resident enterprise&rdquo; for PRC
enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. First, we may be subject to the enterprise
income tax at a rate of 25% on our worldwide taxable income as well as PRC enterprise income tax reporting obligations. In our case, this
would mean that income such as interest on offering proceeds and non-China source income would be subject to PRC enterprise income tax
at a rate of 25%. Second, although under the EIT Law and its implementing rules dividends paid to us from our PRC subsidiaries would qualify
as &ldquo;tax-exempt income,&rdquo; we cannot guarantee that such dividends will not be subject to a 10% withholding tax, as the PRC foreign
exchange control authorities, which enforce the withholding tax, have not yet issued guidance with respect to the processing of outbound
remittances to entities that are treated as resident enterprises for PRC enterprise income tax purposes. Finally, it is possible that
future guidance issued with respect to the new &ldquo;resident enterprise&rdquo; classification could result in a situation in which a
10% withholding tax is imposed on dividends we pay to our non-PRC shareholders and with respect to gains derived by our non-PRC shareholders
from transferring our shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>U.S. Federal Income Taxation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following is a discussion of certain material
U.S. federal income tax consequences of the acquisition, ownership and disposition of our securities. It does not purport to be a comprehensive
description of all of the tax considerations that may be relevant to a particular person&rsquo;s situation. The discussion applies only
to holders that hold their securities as capital assets (generally property held for investment) within the meaning of Section 1221 of
the Internal Revenue Code of 1986, as amended, or the Code. This discussion is based on the Code, income tax regulations promulgated thereunder,
judicial positions, published positions of the Internal Revenue Service, or the IRS, and other applicable authorities, all as in effect
as of the date hereof and all of which are subject to change, possibly with retroactive effect. This discussion is general in nature and
is not exhaustive of all possible tax considerations, nor does the discussion address any state, local or foreign tax considerations or
any U.S. tax considerations (e.g., estate or gift tax) other than U.S. federal income tax considerations, that may be applicable to particular
holders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This discussion does not address all aspects of
U.S. federal income taxation that may be relevant in light of particular circumstances, nor does it address the U.S. federal income tax
consequences to persons who are subject to special rules under U.S. federal income tax law, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">banks, insurance companies or other financial institutions;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">persons subject to the alternative minimum tax;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">tax-exempt organizations;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">controlled foreign corporations, passive foreign investment companies and corporations that accumulate earnings to avoid United States federal income tax;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">certain former citizens or long-term residents of the United States;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">dealers in securities or currencies;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">traders in securities that elect to use a mark-to-market method of accounting for their securities holdings;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">persons that own, or are deemed to own, more than five percent of our capital stock;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">holders who acquired our stock as compensation or pursuant to the exercise of a stock option; or</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">persons who hold our shares as a position in a hedging transaction, &ldquo;straddle,&rdquo; or other risk reduction transaction.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For purposes of this discussion, a U.S. holder
is (i) an individual who is a citizen or resident of the United States for U.S. federal income tax purposes; (ii) a corporation, or other
entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States (or
treated as such under applicable U.S. tax laws), any state thereof, or the District of Columbia; (iii) an estate the income of which is
subject to U.S. federal income tax regardless of its source; or (iv) a trust if (a) a U.S. court is able to exercise primary supervision
over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust,
or (b) it has a valid election in effect under applicable law and regulations to be treated as a U.S. person for U.S. federal income tax
purposes. A non-U.S. holder is a holder that is neither a U.S. holder nor a partnership or other entity classified as a partnership for
U.S. federal income tax purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In the case of a partnership or entity classified
as a partnership for U.S. federal income tax purposes, the U.S. federal income tax treatment of a partner generally will depend on the
status of the partner and the activities of the partnership. Partners of partnerships should consult their tax advisors regarding the
U.S. federal income tax consequences to them of the merger or of the ownership and disposition of our shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As a result of consummation of the Share Exchange,
(i) we acquired substantially all the properties of KBS International, a U.S. corporation, and (ii) the former shareholders of KBS International
held at least 80 percent of our Common Stock by reason of having held stock of KBS International. Accordingly, under Section 7874 of the
Code, we are treated for U.S. federal tax purposes as a U.S. corporation and, among other consequences, are subject to U.S. federal income
tax on our worldwide income. This discussion assumes that Section 7874 of the Code continues to apply to treat us as a U.S. corporation
for all purposes under the Code. If, for some reason (e.g., future repeal of Section 7874 of the Code), we were no longer treated as a
U.S. corporation under the Code, the U.S. federal income tax consequences described herein could be materially and adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I><U>U.S. Federal Income Tax Consequences for U.S. Holders</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Distributions</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In the event that distributions are paid on our
common stock, the gross amount of such distributions will be included in the gross income of the U.S. holder as dividend income on the
date of receipt to the extent that the distribution is paid out of current or accumulated earnings and profits, as determined under U.S.
federal income tax principles. Such dividends will be eligible for the dividends-received deduction allowed to corporations in respect
of dividends received from other U.S. corporations. Dividends received by non-corporate U.S. holders, including individuals, may be subject
to reduced rates of taxation under current law. A U.S. holder may be eligible to claim a foreign tax credit with respect to any PRC withholding
tax imposed on dividends paid by us. However, the foreign tax credit rules are complex, and their application in connection with Section
7874 of the Code and the Agreement Between the Government of the United States of America and the Government of the People&rsquo;s Republic
of China for the Avoidance of Double Taxation and the Prevention of Tax Evasion with Respect to Taxes on Income, or the U.S.-PRC Tax Treaty,
is not entirely clear at this time. U.S. holders should consult their own tax advisors with respect to any benefits they may be entitled
to under the foreign tax credit rules and the U.S.-PRC Tax Treaty.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The extent that dividends paid on our Common
Stock exceed current and accumulated earnings and profits, the distributions will be treated first as a tax-free return of tax basis on
our Common Stock, and to the extent that the amount of the distribution exceeds tax basis, the excess will be treated as gain from the
disposition of those common stock. Because Section 7874 of the Code has applied to treat us as a U.S. corporation only since the consummation
of the Share Exchange in 2014, we may not be able to demonstrate to the IRS the extent to which a distribution on our common stock exceeds
our current and accumulated earnings and profits (as determined under U.S. federal income tax principles), in which case all of such distribution
will be treated as a dividend for U.S. federal income tax purposes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Sale or Other Disposition</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">U.S. holders of our Common Stock will recognize
taxable gain or loss on any sale, exchange, or other taxable disposition of common stock equal to the difference between the amount realized
for the common stock and the U.S. holder&rsquo;s tax basis in the common stock. This gain or loss generally will be capital gain or loss.
Under current law, non-corporate U.S. holders, including individuals, are eligible for reduced tax rates if the common stock has been
held for more than one year. The deductibility of capital losses is subject to limitations. A U.S. holder may be eligible to claim a foreign
tax credit with respect to any PRC withholding tax imposed on gain from the sale or other disposition of common stock. However, the foreign
tax credit rules are complex, and their application in connection with Section 7874 of the Code and the U.S.-PRC Tax Treaty is not entirely
clear at this time. U.S. holders should consult their own tax advisors with respect to any benefits they may be entitled to under the
foreign tax credit rules and the U.S.-PRC Tax Treaty.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Unearned Income Medicare Contribution</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Certain U.S. holders who are individuals, trusts
or estates are required to pay an additional 3.8% Medicare tax on, among other things, dividends on and capital gains from the sale or
other disposition of shares of stock. U.S. holders should consult their own advisors regarding the effect, if any, of this rule on their
ownership and disposition of our Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I><U>U.S. Federal Income Tax Consequences for
Non-U.S. Holders</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Distributions</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The rules applicable to non-U.S. holders for determining
the extent to which distributions on our Common Stock, if any, constitute dividends for U.S. federal income tax purposes are the same
as for U.S. holders.&nbsp;<I>See &ldquo;&ndash;U.S. Federal Income Tax Consequences for U.S. Holders&ndash; Distributions.&rdquo;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Any dividends paid to a non-U.S. holder by us
are treated as income derived from sources within the United States and generally will be subject to U.S. federal income tax withholding
at a rate of 30% of the gross amount of the dividends, or at a lower rate provided by an applicable income tax treaty if non-U.S. holders
provide proper certification of eligibility for the lower rate (usually on IRS Form W-8BEN or W-8BEN-E). Dividends received by a non-U.S.
holder that are effectively connected with such holder&rsquo;s conduct of a U.S. trade or business (and, if an income tax treaty applies,
are attributable to a permanent establishment maintained by the non-U.S. holder in the U.S.) are exempt from such withholding tax, provided
that applicable certification requirements are satisfied. In such case, however, non-U.S. holders will be subject to U.S. federal income
tax on such dividends, net of certain deductions, at the rates applicable to U.S. persons. In addition, corporate non-U.S. holders may
be subject to an additional branch profits tax equal to 30% or such lower rate as may be specified by an applicable tax treaty on dividends
received that are effectively connected with the conduct of a trade or business in the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If non-U.S. holders are eligible for a reduced
rate of U.S. withholding tax pursuant to an applicable income tax treaty, such non-U.S. holders may obtain a refund of any excess amounts
withheld by filing an appropriate claim for refund with the IRS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Sale or Other Disposition</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Except as described below for a reduced rate of
U.S. withholding tax pursuant to an applicable income tax treaty, any gain realized by a non-U.S. holder upon the sale or other disposition
of our Common Stock generally will not be subject to U.S. federal income tax unless:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">the gain is effectively connected with the conduct of a trade or business in the United States by such non- U.S. holder, and, if an income tax treaty applies, is attributable to a permanent establishment maintained by such non-U.S. holder in the U.S.;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">the non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of the disposition, and certain other conditions are met; or</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">We are or have been a &ldquo;U.S. real property holding corporation,&rdquo; or USRPHC, for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period during which the holder has held our Common Stock.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Non-U.S. holders whose gain is described in the
first bullet point above will be subject to U.S. federal income tax on the gain derived from the sale, net of certain deductions, at the
rates applicable to U.S. persons. Corporate non-U.S. holders whose gain is described in the first bullet point above may also be subject
to the branch profits tax described above at a 30% rate or lower rate provided by an applicable income tax treaty. Individual non-U.S.
holders described in the second bullet point above will be subject to a flat 30% U.S. federal income tax rate on the gain derived from
the sale, which may be offset by U.S.-source capital losses, even though such non-U.S. holders are not considered to be residents of the
United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A corporation will be a USRPHC if the fair market
value of its U.S. real property interests equals or exceeds 50 percent of the aggregate of its real property interests (U.S. and non-U.S.)
and its assets used or held for use in a trade or business. Because we do not currently own significant U.S. real property, we believe
that we are not currently and will not become a USRPHC. However, because the determination of whether we are a USRPHC depends on the fair
market value of our U.S. real property relative to the fair market value of our other business assets, there can be no assurance that
we will not become a USRPHC in the future. Even if we become a USRPHC, however, as long as our common stock are regularly traded on an
established securities market, such common stock will be treated as U.S. real property interests only if a non-U.S. holder actually or
constructively holds more than 5% of such regularly traded common stock at any time during the applicable period that is specified in
the Code.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Foreign Account Tax Compliance</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Foreign Account Tax Compliance provisions
of the Hiring Incentives to Restore Employment Act (generally referred to as &ldquo;FATCA&rdquo;), when applicable, will impose a U.S.
federal withholding tax of 30% on payments of dividends on, and (for dispositions after December 31, 2018) gross proceeds from dispositions
of, our common stock that are held through &ldquo;foreign financial institutions&rdquo; (which is broadly defined for this purpose and
in general includes investment vehicles) and certain other non-U.S. entities unless various U.S. information reporting and due diligence
requirements (generally relating to ownership by U.S. persons of certain interests in or accounts with those entities) have been satisfied
or an exemption applies. An intergovernmental agreement between the United States and an applicable foreign country may modify these requirements.
U.S. Holders should consult their tax advisers regarding the effect, if any, of the FATCA provisions on their particular circumstances.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Information Reporting and Backup Withholding</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Payments of dividends or of proceeds on the disposition
of stock made to a holder of our Common Stock may be subject to information reporting and backup withholding at a current rate of 24%
unless such holder provides a correct taxpayer identification number on IRS Form W-9 (or other appropriate withholding form) or establishes
an exemption from backup withholding, for example by properly certifying the holder&rsquo;s non-U.S. status on a Form W-8BEN, Form W-8BEN-E
or another appropriate version of IRS Form W-8. Payments of dividends to holders must generally be reported annually to the IRS, along
with the name and address of the holder and the amount of tax withheld, if any. A similar report is sent to the holder. Pursuant to applicable
income tax treaties or other agreements, the IRS may make these reports available to tax authorities in the holder&rsquo;s country of
residence.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Backup withholding is not an additional
tax; rather, the U.S. income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If
withholding results in an overpayment of taxes, a refund or credit may generally be obtained from the IRS, provided that the required
information is furnished to the IRS in a timely manner</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><A NAME="g_054"></A><FONT STYLE="font-size: 10pt"><B>F.
Dividends and Paying Agents</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><A NAME="g_055"></A><FONT STYLE="font-size: 10pt"><B>G.
Statement by Experts</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><A NAME="g_056"></A><FONT STYLE="font-size: 10pt"><B>H.
Documents on Display</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have filed this annual report on Form 20-F
with the SEC under the Exchange Act. Statements made in this report as to the contents of any document referred to are not necessarily
complete. With respect to each such document filed as an exhibit to this report, reference is made to the exhibit for a more complete
description of the matter involved, and each such statement shall be deemed qualified in its entirety by such reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are subject to the informational requirements
of the Exchange Act as a foreign private issuer and file reports and other information with the SEC. Reports and other information filed
by us with the SEC including this report, may be inspected and copied at the public reference room of the SEC at 100 F Street, N.E., Washington
D.C. 20549. You can also obtain copies of this report by mail from the Public Reference Section of the SEC, 100 F. Street, N.E., Washington
D.C. 20549, at prescribed rates. Additionally, copies of this material may be obtained from the SEC&rsquo;s Internet site at http://www.sec.gov.
The SEC&rsquo;s telephone number is 1-800-SEC-0330. In accordance with NASDAQ Stock Market Rule 5250(d), we will also post this annual
report on Form 20-F on our website at www.kbsfashion.com.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As a foreign private issuer, we are exempt from
the rules under the Exchange Act prescribing the furnishing and content of quarterly reports and proxy statements, and officers, directors
and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange
Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><A NAME="g_057"></A><FONT STYLE="font-size: 10pt"><B>I.</B></FONT> <FONT STYLE="font-size: 10pt"><B>Subsidiary Information</B></FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not applicable.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><A NAME="g_058"></A><B>ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Interest Rate Risk</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We deposit surplus funds with Chinese banks earning
daily interest. We do not invest in any instruments for trading purposes. Most of our outstanding debt instruments carry fixed rates of
interest. Our operations generally are not directly sensitive to fluctuations in interest rates and we currently do not have any long-term
debt outstanding. Management monitors the banks&rsquo; prime rates in conjunction with our cash requirements to determine the appropriate
level of debt balances relative to other sources of funds. We have not entered into any hedging transactions in an effort to reduce our
exposure to interest rate risk.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Foreign Exchange Risk</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">While our reporting currency is the U.S. dollar,
substantially all of our consolidated revenues and consolidated costs and expenses are denominated in RMB. Substantially all 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 the 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. Assets and liabilities are translated
at exchange rates at the balance sheet dates and revenue and expenses are translated at the average exchange rates and equity is translated
at historical exchange rates. Any resulting translation adjustments are not included in determining net income but are included in determining
other comprehensive income, a component of equity. An average appreciation (depreciation) of the RMB against the U.S. dollar of 5% would
increase (decrease) our comprehensive income by $3.0 million based on our outstanding revenues, costs and expenses, assets and liabilities
denominated in RMB as of December 31, 2019. As of December 31, 2020, our accumulated other comprehensive loss was $(3.5) million. We have
not entered into any hedging transactions in an effort to reduce our exposure to foreign exchange risk.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The value of RMB against the U.S. dollar and other
currencies is affected by, among other things, changes in China&rsquo;s political and economic conditions. Since July 2005, RMB has not
been pegged to the U.S. dollar. Although the People&rsquo;s Bank of China regularly intervenes in the foreign exchange market to prevent
significant short-term fluctuations in the exchange rate, RMB may appreciate or depreciate significantly in value against the U.S. dollar
in the medium to long term. Moreover, it is possible that in the future, PRC authorities may lift restrictions on fluctuations in RMB
exchange rate and lessen intervention in the foreign exchange market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Inflation</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Inflationary factors such as increases in the
cost of our product and overhead costs may adversely affect our operating results. Although we do not believe that inflation has had a
material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse
effect on our ability to maintain current levels of gross margin and selling, general and administrative expenses as a percentage of net
revenues if the selling prices of our products do not increase with these increased costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><A NAME="g_059"></A>ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN
EQUITY SECURITIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><A NAME="g_060"></A><FONT STYLE="font-size: 10pt"><B>A.
Debt Securities</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><A NAME="g_061"></A><FONT STYLE="font-size: 10pt"><B>B.
Warrants and Rights</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><A NAME="g_062"></A><FONT STYLE="font-size: 10pt"><B>C.
Other Securities</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><A NAME="g_063"></A><FONT STYLE="font-size: 10pt"><B>D.
American Depositary Shares</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We do not have any American Depositary Shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="g_064"></A><B>PART II</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><A NAME="g_065"></A><B>ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND
DELINQUENCIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">None.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><A NAME="g_066"></A><B>ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS
OF SECURITY HOLDERS AND USE OF PROCEEDS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">None.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><A NAME="g_067"></A><B>ITEM 15. CONTROLS AND PROCEDURES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><FONT STYLE="font-size: 10pt"><B><A NAME="g_068"></A>A.
Disclosure Controls and Procedures</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our management, with the participation of our
CEO and CFO, has evaluated the effectiveness of the Company&rsquo;s disclosure controls and procedures, as defined in Rule 13a-15(e) and
15d-15(e) of the Exchange Act, as of December 31, 2022.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The term &ldquo;disclosure controls and procedures&rdquo;
as defined in Rules 13a-15(e) and 15d-15(e) means controls and other procedures of the Company that are designed to ensure that information
required to be disclosed by a company in reports, such as this report, that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SEC rules and forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files
or submits under the Exchange Act is accumulated and communicated to the company&rsquo;s management, including its principal executive
and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any
controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives,
and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Based on that evaluation, our CEO and interim
CFO concluded that our disclosure controls and procedures were not effective as of December 31, 2022, due to a material weakness in our
internal control over financial reporting. Specifically, we currently lack sufficient accounting personnel with the appropriate level
of knowledge, experience and training in IFRS and SEC reporting requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><FONT STYLE="font-size: 10pt"><B><A NAME="g_069"></A>B.
Management&rsquo;s Annual Report on Internal Control Over Financial Reporting</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our management is responsible for establishing
and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is designed to provide
reasonable assurances regarding the reliability of financial reporting and the preparation of our consolidated financial statements in
accordance with IFRS. Our accounting policies and internal controls over financial reporting, established and maintained by management,
are under the general oversight of the Board&rsquo;s audit committee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our internal control over financial reporting
includes those policies and procedures that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the financial statements.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance
with the policies or procedures may deteriorate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Management assessed our internal control over financial reporting as
of December 31, 2022.The standard measures adopted by management in making its evaluation are the measures in the Internal-Control Integrated
Framework published by the Committee of Sponsoring Organizations of the Treadway Commission.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Based on management&rsquo;s assessment using the
COSO criteria, our CEO and CFO concluded that our internal control over financial reporting as of December 31, 2021 was ineffective.&nbsp;
We have taken, and are taking, certain actions to remediate the material weakness related to our lack of IFRS and SEC reporting experience.
We engaged a consultant with IFRS knowledge and experience to supplement our current internal accounting personnel and assist us in the
preparation of our financial statements to ensure that our financial statements are prepared in accordance with IFRS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company continues to make efforts to implementing
our existing and newly adopted procedures to improve our disclosure controls and internal controls over financing reporting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><A NAME="g_070"></A><FONT STYLE="font-size: 10pt"><B>C.
Attestation Report of the Registered Public Accounting Firm</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Because the Company is a non-accelerated filer,
this annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial
reporting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0in; text-indent: 0in; text-align: justify"><A NAME="g_071"></A><FONT STYLE="font-size: 10pt"><B>D.
Changes in Internal Controls over Financial Reporting</B></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Other than discussed above, there has been no
change to our internal control over financial reporting that occurred during the period covered by this annual report on Form 20-F that
has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><A NAME="g_072"></A><B>ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The audit committee of our board of directors
currently consists of three members, Mu Ruifeng, Jin Yan and Baojun Zhu. Our board of directors has determined that all of our audit committee
members are &ldquo;independent&rdquo; under the Exchange Act and have the requisite financial knowledge and experience to serve as members
of our audit committee. In addition, our board of directors has determined that audit committee financial expert is an &ldquo;audit committee
financial expert&rdquo; as defined in Item 16A of the Instructions to Form 20-F and meets NASDAQ&rsquo;s financial sophistication requirements
due to his current and past experience in various companies in which he was responsible for, amongst others, the financial oversight responsibilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><A NAME="g_073"></A>ITEM 16B. CODE OF ETHICS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On October 25, 2014, our Audit Committee adopted
a Code of Ethics that applies to all of the directors, officers and employees of the Company and its subsidiaries, including our principal
executive officer, principal financial officer and principal accounting officer. The Code of Ethics addresses, among other things, honesty
and ethical conduct, conflicts of interest, compliance with laws, regulations and policies, including disclosure requirements under the
federal securities laws, confidentiality, trading on inside information, and reporting of violations of the code. A copy of the Code of
Ethics is filed as Exhibit 11.1 to the annual report on Form 20-F filed on October 27, 2015. Copies of our Code of Ethics are available
in print, free of charge, upon request to&nbsp;JX Luxventure Limited<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65292;</FONT>Bin
Hai Da Dao No. 270<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65292;</FONT>Lang Qin Wan Guo Ji Du Jia Cun Zong He Lou<FONT STYLE="font-family: Times New Roman, Times, Serif">&#65292;</FONT>Xiu
Ying District, Haikou City, Hainan Province 570100, People&rsquo;s Republic of China.&nbsp;During the fiscal year ended December 31, 2022,
there were no waivers of our Code of Ethics.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><A NAME="g_074"></A><B>ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table sets forth the aggregate fees
by categories specified below in connection with services rendered by our principal external auditors for the periods indicated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Fiscal Year Ended <BR> December&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left; text-indent: -9pt; padding-left: 9pt">Audit Fees*</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">250,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt"></FONT>210,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  </TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">*</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">&ldquo;Audit Fees&rdquo; consisted of the aggregate fees billed for professional services rendered for the audit of our annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our Audit Committee pre-approves all auditing
services and permitted non-audit services to be performed for us by our independent auditor, including the fees and terms thereof (subject
to the de minimums exceptions for non-audit services described in Section 10A(i)(l)(B) of the Exchange Act that are approved by our Audit
Committee prior to the completion of the audit).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><A NAME="g_075"></A><B>ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS
FOR AUDIT COMMITTEES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Prior to July 10, 2017, in lieu of an audit
committee comprised of three independent directors, our audit committee was comprised of two independent members of our board of
directors, namely, John Sano and Matthew C. Los. On July 10, 2017, the board of directors appointed Ms. Yuet Mei Chan as an
independent director and a member of the audit committee. On October 21, 2020, John Sano and Matthew C. Los resigned from their
positions as independent directors of the Company and on October 25, 2020, Mr. Mu Ruifeng and Mr. Jin Yan were appointed as
independent directors of the Company and member of the Audit Committee of the Company. On May 2, 2022, Yuet Mei Chan resigned from
her position as independent director of the Company and on May 3, 2022, Mr. Baojun Zhu was appointed as independent directors of the
Company and a member of the Audit Committee of the Company. As a result, we are in full compliance with the Nasdaq listing rules for
the audit committee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><A NAME="g_076"></A><B>ITEM 16E. PURCHASES OF EQUITY SECURITIES BY
THE ISSUER AND AFFILIATED PURCHASERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There were no purchases of equity securities made
by or on behalf of us or any &ldquo;affiliated purchaser&rdquo; as defined in Rule 10b-18 of the Exchange Act during the period covered
by this Annual Report.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><A NAME="g_077"></A><B>ITEM 16F. CHANGE IN REGISTRANT&rsquo;S CERTIFYING
ACCOUNTANT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">None.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><A NAME="g_078"></A><B>ITEM 16G. CORPORATE GOVERNANCE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We were incorporated in the Republic of the Marshall
Islands (&ldquo;RMI&rdquo;) and our corporate governance practices are governed by applicable RMI law, our Restated Articles and bylaws.
In addition, because our Common Stock is listed on NASDAQ, we are subject to NASDAQ&rsquo;s corporate governance requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">NASDAQ Listing Rule 5615(a)(3) permits a foreign
private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that such foreign
private issuer discloses in its annual report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the
home country practice followed in lieu of such requirement. Our RMI counsel has provided a letter to NASDAQ indicating that we have elected
to follow home country practices in lieu of NASDAQ Listing Rule 5600 with the exception of those rules which are required to be followed
pursuant to the provisions of Nasdaq Listing Rule 5615(a)(3), and our practices with regards to these NASDAQ requirements are not prohibited
by the laws of the RMI. We currently follow our home country practice that (i) does not require us to hold an annual meeting of shareholders
no later than one year after the end of its fiscal year, (ii) does not require us to seek shareholder approval for the adoption of share
incentive plans; and (iii) does not require us to establish a compensation committee or nominating committee or nominating process. As
a result,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">in lieu of having a compensation committee under Nasdaq Listing Rule 5605(d), we currently do not have a compensation committee;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">in lieu of selecting or recommending director nominees for selection by either a majority of the independent directors or a nominating committee comprised solely of independent directors under Nasdaq Listing Rule 5605(e), we currently do not have a nominating committee or such nominating process;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">in lieu of holding a shareholder meeting each year under Nasdaq Listing Rule 5620(a), we did not hold an annual shareholder meeting in fiscal 2019; however, we may, hold annual shareholder meetings in the future if there are significant issues that require shareholders&rsquo; approvals; and</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">in lieu of obtaining shareholder approval under Nasdaq Listing Rule 5635(c) prior to the adoption of an agreement pursuant to which stock may be acquired by officers, directors, employees or consultants, our board of directors approves such adoption, including our 2018 equity incentive plan.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><A NAME="g_079"></A><B>ITEM 16H. MINE SAFETY DISCLOSURE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><A NAME="g_080"></A><B>ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS
THAT PREVENT INSPECTIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Not applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;<B>&nbsp;</B></P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><A NAME="g_081"></A><B>PART III</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><A NAME="g_082"></A><B>ITEM 17. FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have elected to provide financial statements
pursuant to Item 18.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>ITEM 18. FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The financial statements are filed as part of
this annual report beginning on page F-1.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><A NAME="g_084"></A><B>ITEM 19. EXHIBITS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 7pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="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: bottom; width: 9%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Exhibit
    No.</B></FONT></TD>
    <TD STYLE="vertical-align: top; width: 1%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; vertical-align: bottom; width: 90%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Description</B></FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.1</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><A HREF="https://www.sec.gov/Archives/edgar/data/1546383/000114420412057558/v326493_ex3-3.htm" STYLE="-sec-extract: exhibit"><FONT STYLE="font-size: 10pt">Amended
    and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.3 to the Amendment No. 4 to the registrant&rsquo;s
    Registration Statement on Form F-1 filed on October 24, 2012 (Commission File No. 333-180571)).</FONT></A></FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.2</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><A HREF="https://www.sec.gov/Archives/edgar/data/1546383/000114420415060877/v422619_ex1-2.htm" STYLE="-sec-extract: exhibit"><FONT STYLE="font-size: 10pt">Articles
    of Amendment to the Amended and Restated Articles of Incorporation, filed with the Office of the Registrar of Corporations of Republic
    of the Marshall Islands on October 31, 2014 (incorporated by reference to Exhibit 1.2 to the Annual Report on Form 20-F filed by
    the registrant on October 27, 2015)</FONT></A></FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.3</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><A HREF="https://www.sec.gov/Archives/edgar/data/1546383/000114420417005951/v458403_ex99-1.htm" STYLE="-sec-extract: exhibit"><FONT STYLE="font-size: 10pt">Articles
    of Amendment to the Amended and Restated Articles of Incorporation, filed with the Office of the Registrar of Corporations of Republic
    of the Marshall Islands on February 3, 2017 (incorporated by reference to Exhibit 99.1 to the Report of Foreign Private Issuer on
    Form 6-K furnished by the registrant on February 3, 2017)</FONT></A></FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.4</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1546383/000121390022026185/f20f2021ex1-4_jxluxventure.htm">Articles of Amendment to the Amended and Restated Articles of Incorporation, filed with the Office of the Registrar of Corporations of Republic of the Marshall Islands on June 21, 2021 (incorporated by reference to Exhibit 1.4 to the Annual Report on Form 20-F filed by the registrant on May 13, 2022)</A></FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.5</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><A HREF="https://www.sec.gov/Archives/edgar/data/1546383/000121390021051732/ea148493ex3-1_jxluxventure.htm" STYLE="-sec-extract: exhibit"><FONT STYLE="font-size: 10pt">Articles
    of Amendment to the Amended and Restated Articles of Incorporation, filed with the Office of the Registrar of Corporations of Republic
    of the Marshall Islands on October 4, 2021 (incorporated by reference to Exhibit 3.1 to the Report of Foreign  Private Issuer
    on Form 6-K filed by the registrant on October 7, 2021)</FONT></A></FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">1.6</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><A HREF="http://www.sec.gov/Archives/edgar/data/1546383/000121390023032367/ea177441ex3-1_jxluxventure.htm">Articles
    of Amendment to the Amended and Restated Articles of Incorporation, filed with the Office of the Registrar of Corporations of
    Republic of the Marshall Islands on April 25, 2023 (incorporated by reference to Exhibit 3.1 to the Report of Foreign Private Issuer
    on Form 6-K filed by the registrant on April 25, 2023)</A></FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.7</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><A HREF="https://www.sec.gov/Archives/edgar/data/1546383/000114420415060877/v422619_ex1-3.htm" STYLE="-sec-extract: exhibit"><FONT STYLE="font-size: 10pt">By-laws
    as amended on September 22, 2014 (incorporated by reference to Exhibit 1.3 to the Annual Report on Form 20-F filed by the registrant
    on October 27, 2015)</FONT></A></FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.1</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><A HREF="https://www.sec.gov/Archives/edgar/data/1546383/000114420415060877/v422619_ex2-2.htm" STYLE="-sec-extract: exhibit"><FONT STYLE="font-size: 10pt">Specimen
    of Common Stock Certificate (incorporated by reference to Exhibit 2.2 to the Annual Report on Form 20-F filed by the registrant on
    October 27, 2015)</FONT></A></FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.2</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1546383/000121390022026185/f20f2021ex2-2_jxluxventure.htm">Certificate of Designation, Preferences and Rights of Series A Convertible Preferred Stock, filed with the Office of the Registrar of Corporations of Republic of the Marshall Islands on April 25, 2022 (incorporated by reference to Exhibit 2.2 to the Annual Report on Form 20-F filed by the registrant on May 13, 2022)</A></FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.3</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1546383/000121390022026185/f20f2021ex2-3_jxluxventure.htm">Certificate of Designation, Preferences and Rights of Series B Participating Preferred Stock , filed with the Office of the Registrar of Corporations of Republic of the Marshall Islands on April 25, 2022 (incorporated by reference to Exhibit 2.3 to the Annual Report on Form 20-F filed by the registrant on May 13, 2022)</A></FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.4</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1546383/000121390022026185/f20f2021ex2-4_jxluxventure.htm">Certificate of Designation, Preferences and Rights of Series C Convertible Preferred Stock, filed with the Office of the Registrar of Corporations of Republic of the Marshall Islands on April 25, 2022 (incorporated by reference to Exhibit 2.4 to the Annual Report on Form 20-F filed by the registrant on May 13, 2022)</A></FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.5</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1546383/000121390022026185/f20f2021ex2-5_jxluxventure.htm">Certificate of Designation, Preferences and Rights of Series D Convertible Preferred Stock, filed with the Office of the Registrar of Corporations of Republic of the Marshall Islands on April 25, 2022 (incorporated by reference to Exhibit 2.5 to the Annual Report on Form 20-F filed by the registrant on May 13, 2022)</A></FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.6</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1546383/000121390022026185/f20f2021ex2-6_jxluxventure.htm">Amended and Restated Certificate of Designation, Preferences and Rights of Series A Convertible Preferred Stock, filed with the Office of the Registrar of Corporations of Republic of the Marshall Islands on April 27, 2022 (incorporated by reference to Exhibit 2.6 to the Annual Report on Form 20-F filed by the registrant on May 13, 2022)</A></FONT><P STYLE="margin: 0pt 0"></P></TD></TR>
  <TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.7</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1546383/000121390022026185/f20f2021ex2-7_jxluxventure.htm">Amended and Restated Certificate of Designation, Preferences and Rights of Series B Participating Preferred Stock, filed with the Office of the Registrar of Corporations of Republic of the Marshall Islands on April 27, 2022 (incorporated by reference to Exhibit 2.7 to the Annual Report on Form 20-F filed by the registrant on May 13, 2022)</A></FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.8</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1546383/000121390022026185/f20f2021ex2-8_jxluxventure.htm">Amended and Restated Certificate of Designation, Preferences and Rights of Series C Convertible Preferred Stock, filed with the Office of the Registrar of Corporations of Republic of the Marshall Islands on April 27, 2022 (incorporated by reference to Exhibit 2.8 to the Annual Report on Form 20-F filed by the registrant on May 13, 2022)</A></FONT><P STYLE="margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT></P></TD></TR>
  <TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.9</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1546383/000121390022026185/f20f2021ex2-9_jxluxventure.htm">Amended and Restated Certificate of Designation, Preferences and Rights of Series D Convertible Preferred Stock, filed with the Office of the Registrar of Corporations of Republic of the Marshall Islands on April 27, 2022 (incorporated by reference to Exhibit 2.9 to the Annual Report on Form 20-F filed by the registrant on May 13, 2022)</A></FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.10</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1546383/000121390022026185/f20f2021ex2-10_jxluxventure.htm">Second Amended and Restated Certificate of Designation, Preferences and Rights of Series A Convertible Preferred Stock, filed with the Office of the Registrar of Corporations of Republic of the Marshall Islands on May 10, 2022 (incorporated by reference to Exhibit 2.10 to the Annual Report on Form 20-F filed by the registrant on May 13, 2022)</A></FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.11*</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><A HREF="f20f2022ex2-11_jxluxventure.htm"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Description of Securities</FONT></A></TD></TR>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.1</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1546383/000121390022039086/ea162786ex10-1_jxluxventure.htm">English Translation of the Employment Agreement between the registrant and Sun Lei, Chief Executive Officer, dated July 12, 2022 (incorporated by reference to Exhibit 10.1 of the Report of Foreign Private Issuer on Form 6-K filed by the registrant on July 12, 2022)</A></FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.2</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-left: -0.125in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1546383/000121390022064861/ea167290ex10-1_jxluxventure.htm">Stock Purchase Agreement between the registrant and Shenzhen Zhongjiyingfeng Investment Co., Ltd. dated October 19, 2022 (incorporated by reference to Exhibit 10.1 of the Report of Foreign Private Issuer on Form 6-K filed by the registrant on October 19, 2022)</A></FONT></TD></TR>

<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.3</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none"><A HREF="http://www.sec.gov/Archives/edgar/data/1546383/000121390022064861/ea167290ex10-2_jxluxventure.htm">Purchase Note related to the Stock Purchase Agreement between the registrant and Shenzhen Zhongjiyingfeng Investment Co., Ltd. dated October 19, 2022 (incorporated by reference to Exhibit 10.2 of the Report of Foreign Private Issuer on Form 6-K filed by the registrant on October 19, 2022)</A></FONT></TD></TR>

  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>


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    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="width: 9%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.4</FONT></TD>
    <TD STYLE="text-align: justify; width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify; width: 90%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none"><A HREF="http://www.sec.gov/Archives/edgar/data/1546383/000121390022064861/ea167290ex10-3_jxluxventure.htm">Pledge and Security Agreement between the registrant and Shenzhen Zhongjiyingfeng Investment Co., Ltd. dated October 19, 2022 (incorporated by reference to Exhibit 10.3 of the Report of Foreign Private Issuer on Form 6-K filed by the registrant on October 19, 2022)</A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.5</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="https://www.sec.gov/Archives/edgar/data/1546383/000121390022006622/ea155237ex99-1_jxluxven.htm" STYLE="-sec-extract: exhibit">2022
    Equity Incentive Plan (incorporated by reference to Exhibit 99.1 to the Registration Statement on Form S-8 filed by the registrant
    on February 11, 2022)</A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.6</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><A HREF="http://www.sec.gov/Archives/edgar/data/1546383/000121390022068287/ea167708ex10-1_jxluxventure.htm">The new 2022 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Report of Foreign Private Issuer on Form 6-K filed by the registrant on November 1, 2022)</A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.7</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><A HREF="https://www.sec.gov/Archives/edgar/data/1546383/000121390021015280/ea137580ex4-1_kbsfashion.htm" STYLE="-sec-extract: exhibit"><FONT STYLE="font-size: 10pt">Rights
    Agreement between KBS Fashion Group Limited and American Stock Transfer&ensp;&amp; Trust Company, LLC, as rights agent, dated March
    11, 2021 (incorporated by reference to Exhibit 4.1 to the Report of Foreign Private Issuer on Form 6-K filed by the registrant on
    March 15, 2021)</FONT></A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.8</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><A HREF="https://www.sec.gov/Archives/edgar/data/1546383/000121390020044436/ea132213ex10-1_kbsfashion.htm" STYLE="-sec-extract: exhibit"><FONT STYLE="font-size: 10pt">Share
    Exchange Agreement, by and among, KBS Fashion Group Limited, Flower Crown Holding and the shareholders of Flower Crown Holding, dated
    December 21, 2020 (incorporated by reference to Exhibit 10.1 to the Report of Foreign Private Issuer on Form 6-K/A filed by the registrant
    on December 28, 2020)</FONT></A></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.9</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><A HREF="https://www.sec.gov/Archives/edgar/data/1546383/000121390020044436/ea132213ex10-2_kbsfashion.htm" STYLE="-sec-extract: exhibit"><FONT STYLE="font-size: 10pt">Stock
    Purchase Agreement, by and between KBS Fashion Group Limited and Sun Lei, dated December 21, 2020 (incorporated by reference to Exhibit
    10.2 to the Report of Foreign Private Issuer on Form 6-K/A filed by the registrant on December 28, 2020)</FONT></A></FONT></TD></TR>

<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="width: 9%"><FONT STYLE="font-size: 10pt">4.9</FONT></TD>
    <TD STYLE="width: 1%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 90%; text-align: justify"><A HREF="https://www.sec.gov/Archives/edgar/data/1546383/000121390021018151/ea138457ex10-1_kbsfashion.htm" STYLE="-sec-extract: exhibit"><FONT STYLE="font-size: 10pt">English Translation of Cross-Border Payment Agreement between Flower Crown (Hainan) Cross-Border E-Commerce Co., Ltd and Hainan New Generation Technology Co., Ltd., dated December 25, 2020 (incorporated by reference to Exhibit 10.1 to the Report of Foreign Private Issuer on Form 6-K filed by the registrant on March 29, 2021)</FONT></A></TD></TR>
  <TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">8.1*</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="f20f2022ex8-1_jxluxventure.htm"><FONT STYLE="font-size: 10pt">List of the registrant&rsquo;s subsidiaries</FONT></A></TD></TR>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">10.1</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="https://www.sec.gov/Archives/edgar/data/1546383/000121390021021141/ea139307ex10-3_kbsfashion.htm" STYLE="-sec-extract: exhibit"><FONT STYLE="font-size: 10pt">Form of Lock-up Agreement with holder of Series A Convertible Preferred Stock (incorporated by reference to the Report of Foreign Private Issuer on Form 6-K filed by the registrant on April 12, 2021)</FONT></A></TD></TR>
  <TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">10.2</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="https://www.sec.gov/Archives/edgar/data/1546383/000121390021021141/ea139307ex10-1_kbsfashion.htm" STYLE="-sec-extract: exhibit"><FONT STYLE="font-size: 10pt">English Translation of Digital RMB Acceptance Agreement (incorporated by reference to the Report of Foreign Private Issuer on Form 6-K filed by the registrant on April 12, 2021)</FONT></A></TD></TR>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">10.3</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="https://www.sec.gov/Archives/edgar/data/1546383/000121390021018151/ea138457ex10-1_kbsfashion.htm" STYLE="-sec-extract: exhibit"><FONT STYLE="font-size: 10pt">English Translation of Cross-Border Payment Agreement (incorporated by reference to the Report of Foreign Private Issuer on Form 6-K filed by the registrant on March 29, 2021)</FONT></A></TD></TR>
  <TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">10.4</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="https://www.sec.gov/Archives/edgar/data/1546383/000121390022012338/ea156864ex10-1_jxluxventure.htm" STYLE="-sec-extract: exhibit"><FONT STYLE="font-size: 10pt">Strategic Cooperation Framework Agreement on Cross-border Supply Chain of Duty-free Merchandise (incorporated by reference to Exhibit 10.1 to the Report of Foreign Private Issuer on Form 6-K filed by the registrant on March 15, 2022)</FONT></A></TD></TR>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">10.5</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-left: -0.125in; text-align: justify"><A HREF="https://www.sec.gov/Archives/edgar/data/1546383/000121390022017706/ea157916ex10-1_jxluxventure.htm" STYLE="-sec-extract: exhibit"><FONT STYLE="font-size: 10pt">Framework Agreement on Strategic Cooperation executed by and between Jin Xuan Luxury Tourism (Hainan) Digital Technology Co., Ltd., a subsidiary of&nbsp;the registrant, and&nbsp;Ragdoll International Trading Co., Ltd. dated March 31, 2022 (incorporated by reference to Exhibit 10.1 of the Report of Foreign Private Issuer on Form 6-K filed by the registrant on April 4, 2022)</FONT></A></TD></TR>

<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.6</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="http://www.sec.gov/Archives/edgar/data/1546383/000121390022029168/ea160510ex10-1_jxluxvent.htm"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">English
    Translation of </FONT><FONT STYLE="font-size: 10pt">Group Airline Ticket Framework Agreement by and between Beijing Heyang
    International Travel Service Co., Ltd., a registrant&rsquo;s subsidiary, and Tianjin China Travel International Travel Service Co.,
    Ltd. dated May 21, 2022 (incorporated by reference to Exhibit 10.1 of the Report of Foreign Private Issuer on Form 6-K furnished May
    24, 2022)</FONT></A></TD></TR>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.7</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="http://www.sec.gov/Archives/edgar/data/1546383/000121390022034162/ea161539ex10-1_jxluxventure.htm"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">English Translation of </FONT><FONT STYLE="font-size: 10pt">Framework Agreement on Strategic Cooperation by and between Jin Xuan Luxury Tourism (Hainan) Digital Technology Co., Ltd., a subsidiary of the registrant and Hainan Douxing Cultural Media Co., Ltd. dated June 17, 2022 (incorporated by reference to Exhibit 10.1 of the Report of Foreign Private Issuer on Form 6-K furnished June 24, 2022)</FONT></A></TD></TR>
  <TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.8</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="http://www.sec.gov/Archives/edgar/data/1546383/000121390022041499/ea163317ex10-1_jxluxven.htm"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">English Translation of the Cooperation Agreement by and between </FONT><FONT STYLE="font-size: 10pt">Jin Xuan (Hainan) Holding Co., Ltd., a subsidiary of the Company, and Kaiwo International Trading Co. Ltd. dated July 26, 2022 (incorporated by reference to Exhibit 10.1 of the Report of Foreign Private Issuer on Form 6-K furnished July 26, 2022</FONT></A></TD></TR>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.9</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="http://www.sec.gov/Archives/edgar/data/1546383/000121390022060997/ea166624ex10-1_jxluxven.htm"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">English Translation of Strategic Cooperation Agreement by and between </FONT><FONT STYLE="font-size: 10pt">Flower Crown (China) Holding Group Co., Ltd. (&ldquo;JXFC&rdquo;), a subsidiary of the registrant and with&nbsp;Hainan Hang Seng Zhongli Commercial Holding Co., Ltd.&nbsp; dated October 3, 2022 (incorporated by reference to Exhibit 10.1 of the Report of Foreign Private Issuer on Form 6-K furnished October 3, 2022</FONT></A></TD></TR>

<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="width: 9%"><FONT STYLE="font-size: 10pt">11.1</FONT></TD>
    <TD STYLE="text-align: justify; width: 1%">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 90%"><A HREF="https://www.sec.gov/Archives/edgar/data/1546383/000114420415060877/v422619_ex11-1.htm" STYLE="-sec-extract: exhibit"><FONT STYLE="font-size: 10pt">Code of Ethics, adopted on October 25, 2014 (incorporated by reference to Exhibit 11.1 to the Annual Report on Form 20-F filed by the registrant on October 27, 2015)</FONT></A></TD></TR>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">12.1/12.2*</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="f20f2022ex12-1_jxluxventure.htm"><FONT STYLE="font-size: 10pt">Certifications of Chief Executive Officer and Chief Financial Officer
    Pursuant to Rule 13a-14(a) or Rule 15d-1(a)</FONT></A></TD></TR>
  <TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">13.1/13.2*</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="f20f2022ex13-1_jxluxventure.htm"><FONT STYLE="font-size: 10pt">Certifications of Chief Executive Officer and Chief Financial Officer
    Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002</FONT></A></TD></TR>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">15.1*</FONT></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="f20f2022ex15-1_jxluxventure.htm"><FONT STYLE="font-size: 10pt">Consent from Onestop Assurance PAC, Independent Registered Public Accounting Firm</FONT></A></TD></TR>
  <TR STYLE="vertical-align: top; background-color: White">
    <TD>15.2*</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify"><A HREF="f20f2022ex15-2_jxluxventure.htm">Consent from WWC, P.C., Independent Registered Public Accounting Firm</A></TD></TR>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">101.INS**</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Inline XBRL Instance Document.</FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">101.SCH</FONT>**</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Inline XBRL Taxonomy Extension Schema Document.</FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">101.CAL</FONT>**</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Inline XBRL Taxonomy Extension Calculation Linkbase Document.</FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">101.DEF</FONT>**</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Inline XBRL Taxonomy Extension Definition Linkbase Document.</FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">101.LAB</FONT>**</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Inline XBRL Taxonomy Extension Label Linkbase Document.</FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">101.PRE</FONT>**</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Inline XBRL Taxonomy Extension Presentation Linkbase Document.</FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">104</FONT>**</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">*</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Filed herewith.</FONT></TD></TR>
  </TABLE>
<P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in; text-align: left">**</TD><TD STYLE="text-align: justify">Filed by amendment.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SIGNATURE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The registrant hereby certifies that it meets
all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this report on its
behalf.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 60%"><FONT STYLE="font-size: 10pt">Date: May 12, 2023</FONT></TD>
    <TD STYLE="width: 40%"><FONT STYLE="font-size: 10pt"><B>JX Luxventure Limited</B></FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid"><P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif">/s/ Sun Lei</P></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Sun Lei</P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Chief Executive Officer</P></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>JX Luxventure Limited</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the years ended December 31, 2022, 2021, and
2020</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(Stated in US dollars)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">CONTENTS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR>
    <TD STYLE="vertical-align: top; width: 90%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; vertical-align: bottom; width: 9%; text-align: center"><FONT STYLE="font-size: 10pt"><B>PAGES</B></FONT></TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#b_001">REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</A></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">F-2</TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#f_001"><FONT STYLE="font-size: 10pt">CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS</FONT></A></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt">F-6</FONT></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#f_002"><FONT STYLE="font-size: 10pt">CONSOLIDATED STATEMENTS OF FINANCIAL POSITION</FONT></A></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt">F-7</FONT></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#f_003"><FONT STYLE="font-size: 10pt">CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY</FONT></A></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt">F-8</FONT></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#f_004"><FONT STYLE="font-size: 10pt">CONSOLIDATED STATEMENTS OF CASH FLOWS</FONT></A></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt">F-9</FONT></TD></TR>
  <TR STYLE="background-color: White">
    <TD STYLE="vertical-align: top; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD></TR>
  <TR STYLE="background-color: rgb(204,238,255)">
    <TD STYLE="vertical-align: top; text-align: justify"><A HREF="#f_005"><FONT STYLE="font-size: 10pt">NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</FONT></A></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center"><FONT STYLE="font-size: 10pt">F-10 - F-47</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><A NAME="b_001"></A>Report of Independent Registered Public Accounting
Firm</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">To the shareholders and board of directors
of JX Luxventure Limited.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><B><I>Opinion on the Financial Statements</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif">We
have audited the accompanying consolidated balance sheets of JX Luxventure Limited (the &ldquo;Company&rdquo;) as of December 31, 2022
and 2021, the related consolidated statements of operation and comprehensive loss, stockholders&rsquo; equity, and cash flows, </FONT>for
each of the two years in the period ended <FONT STYLE="font-family: Times New Roman, Times, Serif">December 31, 2022, and the related
notes (collectively referred to as the &ldquo;financial statements&rdquo;). In our opinion, the financial statements present fairly, in
all material respects, the financial positions of the Company as of December 31, 2022 and 2021, and the results of its operation and its
cash flows </FONT>for each of the two years in the period ended <FONT STYLE="font-family: Times New Roman, Times, Serif">December 31,
2022, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><B><I>Basis for Opinion</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">These financial statements
are the responsibility of the Company&rsquo;s management. Our responsibility is to express an opinion on the Company&rsquo;s financial
statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)
(&ldquo;PCAOB&rdquo;) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">We conducted our audits
in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance
about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required
to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness
of the Company&rsquo;s internal control over financial reporting. Accordingly, we express no such opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Our audits included performing
procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management,
as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for
our opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B><I>Critical Audit
Matter</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">The critical audit matters
communicated below are matters arising from the current period audit of the financial statements that was communicated or required to
be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements
and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not
alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter
below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><B><I>Revenue Recognition
</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As described in Note 7 and Note 8 to the financial
statements, the company shifted to tourism industry through acquisition of Flower Crown and disposition of menswear business. Compared
with last year, revenue from Tourism industry increased by 53% from 51.8 million to 79.1 million this year. For it&rsquo;s tourism business,
the Company determines itself as principal and recognizes revenue for the gross proceeds received from customers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Significant judgment is exercised by the Company
in determining itself as principal and recognize revenue for the gross proceeds received from customers, includes the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">&#9679;</TD><TD STYLE="text-align: justify">The Company controls the ticket before transferring of the ticket
(the right) to the customer (the online platform), because the Company need to secure the seat from the airline by making a full payment
to the airline before obtaining a contract with a customer.</TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">&#9679;</TD><TD STYLE="text-align: justify">The Company has the ability to direct the use of the ticket
and obtains the remaining benefits or taking the loss from the ticket by reselling the ticket or using the ticket itself.</TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">&#9679;</TD><TD STYLE="text-align: justify">The Company&rsquo;s responsibility is to make sure passengers
can take the flight as their wishes.</TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">&#9679;</TD><TD STYLE="text-align: justify">The Company also has inventory risk because the Company makes
full payment to the airlines to secure the right before obtaining a contract with the customer to purchase the ticket.</TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">&#9679;</TD><TD STYLE="text-align: justify">Other than the air ticket itself, the Company also provide financing
or guarantee function to the customer, which are not provided by the airline.</TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Given these factors and due to the volume of transactions,
the related audit effort in evaluating management's judgments in determining itself as principal and recognize revenue for the gross proceeds
received from customers were extensive and required a high degree of auditor judgment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our principal audit procedures related to the
Company's revenue recognition included the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">&#9679;</TD><TD STYLE="text-align: justify">We tested the timing of the Company making a full payment of
airline tickets recorded in system to determine if the company purchased the ticket before transferring the ticket (the flight) to the
customer.</TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">&#9679;</TD><TD STYLE="text-align: justify">We evaluated management's significant accounting policies related
to these tickets selling for reasonableness.</TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">&#9679;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">We
tested a sample of flight information in sales report and compared to publicly available information to determine the authenticity of
the transaction.</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0in; margin-bottom: 0in; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">&#9679;</TD><TD STYLE="text-align: justify">We tested the mathematical accuracy of management's calculations
of revenue and the associated timing of revenue recognized in the financial statements.</TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">/s/&nbsp;Onestop Assurance PAC</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">We have served as the Company&rsquo;s auditor
since 2022.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Singapore</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">May 12, 2023</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">PCAOB ID number: 6732</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT>&nbsp;</FONT></P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><IMG SRC="fin_001.jpg" ALT=""></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<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"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">To:</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Board of Directors and Stockholders of</FONT></TD>
</TR><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">KBS
Fashion Group Limited</FONT></TD></TR>
     </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Opinion
on the Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have audited the accompanying consolidated statements of financial position of KBS Fashion Group Limited (the Company) as of December
31, 2020 and 2019, and the related consolidated statements of comprehensive loss, changes in stockholders&rsquo; equity, and cash flows
for each of the years in the three-year period ended December 31, 2020, and the related notes (collectively referred to as the financial
statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company
as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the three-year period
ended December 31, 2020, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards
Board.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Basis
for Opinion</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
financial statements are the responsibility of the Company&rsquo;s management. Our responsibility is to express an opinion on the Company&rsquo;s
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits,
we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion
on the effectiveness of the Company&rsquo;s internal control over financial reporting. Accordingly, we express no such opinion.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Critical
Audit Matters</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated
or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial
statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters
does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit
matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><IMG SRC="fin_002.jpg" ALT=""></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Impairment
Assessment of Trade Receivables</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
described in Notes 4 and 26, the Company extends unsecured credit to its customers. The Company recognizes a loss allowance on outstanding
trade receivables based on lifetime ECLs at each reporting date. The assessment of loss allowance requires significant judgement. Addressing
the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated
financial statements. The audit engagement team performed extended procedures, which includes, among others, obtaining an understanding
of the management&rsquo;s assessment process, evaluating the relevant inputs and factors used during the process, and testing the reasonableness
of the loss allowance.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Impairment
Assessment of Non-Financial Assets</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
described in Notes 4 and 6, the Company is required to test certain non-financial assets for impairment based on recoverability. The
recoverable amount is determined based on the cash-generating-unit (CGU) to which the asset belongs. For each reporting period, management
reviews the recoverable amount using discounted cash flows and determine if impairment is required. The assessment of the impairment
requires significant judgement. Addressing the matter involved performing procedures and evaluating audit evidence in connection with
forming our overall opinion on the consolidated financial statements. The audit engagement team performed extended procedures, which
includes, among others, obtaining an understanding of the management&rsquo;s assessment process, evaluating the reasonableness of the
relevant inputs and factors used in calculating the projections, and testing the accuracy of the assessment output.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
WWC, P.C.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">WWC,
P.C.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certified
Public Accountants</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have served as the Company&rsquo;s auditor from 2016 to 2021.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">San
Mateo, California</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">May
17, 2021</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><IMG SRC="fin_003.jpg" ALT=""></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><A NAME="f_001"></A><B>JX Luxventure limited</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Consolidated Statements of Comprehensive Loss</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the years ended December 31, 2022, 2021, 2020</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(Stated in U.S. Dollars)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Year ended December&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Notes</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 52%">Revenue</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: center">&nbsp;</TD><TD STYLE="width: 9%; text-align: center">8</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">79,874,727</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">54,040,948</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">1,335,374</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in">Cost of sales</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center">9</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(78,410,244</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(53,193,237</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,168,808</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">1,464,483</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">847,711</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">166,566</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left">Other income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">10</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,636</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34,793</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,122</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left">Other losses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">11</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(98,650</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(17,325</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left">Distribution and selling expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">12</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(721,388</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,353,843</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left">Administrative expenses</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center">13</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(56,043,741</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(6,858,210</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,164,981</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="padding-left: 0.125in; font-weight: bold; text-align: left">(Loss)/profit from operations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">(55,382,660</TD><TD STYLE="font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">(7,346,874</TD><TD STYLE="font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">(995,293</TD><TD STYLE="font-weight: bold; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left">Finance costs</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">14</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; font-weight: bold; text-align: left">(Loss)/profit before tax</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(55,382,660</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,346,874</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(995,293</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left">Income tax income/(expense)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center">15</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(621</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(5,495</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; font-weight: bold; text-align: left">Loss before discontinued operations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">16</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(55,383,281</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,352,369</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(995,293</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Discontinued operation:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left">Discontinued operation loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8,915,414</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(29,863,114</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,672,124</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">Loss on disposal of discontinued operation</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(9,193,736</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; font-weight: bold; text-align: left">Loss for the year</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(73,492,431</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(37,215,483</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,667,417</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; font-weight: bold; text-align: left">Other comprehensive loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.25in; text-align: left">- currency translation differences</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(402,573</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,438,756</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,641,747</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Total comprehensive loss for the year</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(73,895,004</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(35,776,727</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(2,025,670</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Loss per share of common stock attributable to the Company</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD>- Basic</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">19</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(43.7</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(82.3</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(20.9</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>- Diluted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">19</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(43.7</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(82.3</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(20.9</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Weighted average shares outstanding:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>- Basic</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">19</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,681,547</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">452,345</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">271,253</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD>- Diluted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">19</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,681,547</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">452,345</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">271,253</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">The accompanying notes are an integral part of
these consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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


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<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">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><A NAME="f_002"></A><B>JX Luxventure limited</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Consolidated Statements of Financial Position</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As at December 31, 2022, and 2021</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(Stated in U.S. Dollars)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">As of December&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Notes</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">Non-current assets</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left; text-indent: -9pt; padding-left: 18pt">Property, plant and equipment-net</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: center">&nbsp;</TD><TD STYLE="width: 9%; text-align: center">20</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">2,789,704</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">3,798,612</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Investment property-net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">20</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,364,527</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Prepayments and premiums under operating leases</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">21</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,324,695</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Land use rights</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">24</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">380,091</TD><TD STYLE="text-align: left">&nbsp;</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: 18pt">Long-term receivable</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center">22</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">7,000,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 18pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">9,789,704</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">13,867,925</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -9pt; padding-left: 9pt">Current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -9pt; padding-left: 18pt">Inventories</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">25</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">444,551</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,163,896</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Trade receivables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">26</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,736,851</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Other receivables and prepayments</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">26</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,501,106</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,328,122</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Prepayments and premiums under operating leases</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">21</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">82,714</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 18pt">Cash and cash equivalents</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center">27</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">520,916</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">12,914,914</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 18pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">6,466,573</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">24,226,497</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 18pt">Total assets</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">16,256,277</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">38,094,422</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -9pt; padding-left: 9pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -9pt; padding-left: 9pt">Current liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Short term bank loans</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">30</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,180,656</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Trade and other payables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">28</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,319,076</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,355,123</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Due to related parties</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">29</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,611,097</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">467,568</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Contract liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">218,734</TD><TD STYLE="text-align: left">&nbsp;</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: 18pt">Income tax payable</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">212</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 18pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,930,385</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">7,222,081</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -9pt; padding-left: 18pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 18pt">Total liabilities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,930,385</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">7,222,081</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -9pt; padding-left: 9pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-indent: -9pt; padding-left: 9pt">Equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -9pt; padding-left: 18pt">Share capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">32</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,063</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">590</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Series A equity interest with preferential rights</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,240,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,240,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Series C equity interest with preferential rights</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,500,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,500,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Series D equity interest with preferential rights</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,120,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,120,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -9pt; padding-left: 18pt">Share premium</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">32</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">77,959,554</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,719,794</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Other reserve</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">33</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,269,108</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">184,272</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Statutory surplus reserve</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">33</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,084,836</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Retained profits / (accumulated deficit)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">33</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(77,451,517</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,959,086</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 18pt">Foreign currency translation reserve</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center">33</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(317,316</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(2,018,065</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 18pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">12,325,892</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">30,872,341</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 18pt">Total liabilities and equity</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">16,256,277</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">38,094,422</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">The accompanying notes are an integral part of
these consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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


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<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">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><A NAME="f_003"></A>JX Luxventure limited</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Consolidated Statements of Changes in Equity</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the years ended December 31, 2022, 2021, 2020</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(Stated in U.S. Dollars)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">Share<BR>

    capital</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">Preferred&nbsp;A
    <BR> equity interest</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">Preferred
    C<BR> equity interest</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">Preferred
    D <BR> equity interest</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">Share<BR>
    premium</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">Other<BR>
    reserve</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">Statutory<BR>
    surplus<BR>
    reserve</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">Retained<BR>
    earnings</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">Foreign<BR>
    currency<BR>
    translation<BR>
    reserve</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">Total<BR>
    equity</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">Note&nbsp;32</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">Note 32</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">Note 32</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">Note 32</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">Note 32</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">Note 33</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">Note 33</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">Note 33</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">Note 33</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt; width: 30%; font-weight: bold; text-indent: -9pt; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Balance at December
    31, 2019</FONT></TD><TD STYLE="padding-bottom: 4pt; width: 0.5in; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; width: 0.5in; font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; width: 7%; font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">259</FONT></TD><TD STYLE="padding-bottom: 4pt; width: 0.5in; font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt; width: 0.5in; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; width: 0.5in; font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; width: 7%; font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="padding-bottom: 4pt; width: 0.5in; font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt; width: 0.5in; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; width: 0.5in; font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; width: 7%; font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="padding-bottom: 4pt; width: 0.5in; font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt; width: 0.5in; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; width: 0.5in; font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; width: 7%; font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="padding-bottom: 4pt; width: 0.5in; font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt; width: 0.5in; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; width: 0.5in; font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; width: 7%; font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">9,199,779</FONT></TD><TD STYLE="padding-bottom: 4pt; width: 0.5in; font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt; width: 0.5in; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 4pt; width: 0.5in; font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; width: 7%; font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">184,272</FONT></TD><TD STYLE="padding-bottom: 4pt; width: 0.5in; font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt; width: 0.5in; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 4pt; width: 0.5in; font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; width: 7%; font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">6,084,836</FONT></TD><TD STYLE="padding-bottom: 4pt; width: 0.5in; font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt; width: 0.5in; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 4pt; width: 0.5in; font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; width: 7%; font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">46,073,808</FONT></TD><TD STYLE="padding-bottom: 4pt; width: 0.5in; font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt; width: 0.5in; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 4pt; width: 0.5in; font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; width: 7%; font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">(7,098,568</FONT></TD><TD STYLE="padding-bottom: 4pt; width: 0.5in; font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 4pt; width: 0.5in; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 4pt; width: 0.5in; font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; width: 7%; font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">54,444,386</FONT></TD><TD STYLE="padding-bottom: 4pt; width: 0.5in; font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Shares issued for stock based compensation</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">56</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">1,332,698</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">1,332,754</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Shares issued for acquisition of
    subsidiary</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">26</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">780,166</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">780,192</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Loss for the year</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(5,667,417</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(5,667,417</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt; text-align: left; text-indent: -9pt; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Other comprehensive loss for the
    year</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">3,641,747</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">3,641,747</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt; font-weight: bold; text-indent: -9pt; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Balance at December 31, 2020</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">341</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">11,312,643</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">184,272</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">6,084,836</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">40,406,391</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">(3,456,821</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">54,531,662</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Shares issued for stock based compensation</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">130</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">4,407,724</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">4,407,854</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Shares issued for shareholders&rsquo;
    loan</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">67</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">809,485</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">809,552</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -9pt; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Preferred shares issued</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">1,500,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">1,500,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">3,900,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">6,900,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Preferred shares converted into common
    stock</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">52</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(260,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(780,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">1,039,948</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Declared dividend of right</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">7,149,994</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(7,149,994</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Loss for the year</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(37,215,483</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(37,215,483</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt; text-align: left; text-indent: -9pt; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Other comprehensive loss for the
    year</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">1,438,756</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">1,438,756</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt; font-weight: bold; text-indent: -9pt; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Balance at December 31, 2021</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">590</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">1,240,000</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">1,500,000</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">3,120,000</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">24,719,794</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">184,272</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">6,084,836</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">(3,959,085</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">(2,018,065</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">30,872,341</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Shares issued for stock based compensation</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">5,473</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">53,239,760</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">53,245,233</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -9pt; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Disposal of subsidiaries</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">6,084,836</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(6,084,836</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">2,103,322</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">2,103,322</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Loss for the year</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(73,492,431</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(73,492,431</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Other comprehensive loss for the
    year</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(402,573</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(402,573</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt; font-weight: bold; text-indent: -9pt; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Balance at December 31, 2022</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">6,063</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">1,240,000</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">1,500,000</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">3,120,000</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">77,959,554</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">6,269,108</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">(77,451,517</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">(317,316</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 4pt double; text-align: right"><FONT STYLE="font-size: 8pt">12,325,892</FONT></TD><TD STYLE="padding-bottom: 4pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
  </TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">The accompanying notes are an integral part of
these consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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


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<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; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><A NAME="f_004"></A><B>JX Luxventure limited </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Consolidated Statements of Cash Flows</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the years ended December 31, 2022, 2021, 2020</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(Stated in U.S. Dollars)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Year ended December 31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">OPERATING ACTIVITIES</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left; text-indent: -9pt; padding-left: 18pt">Loss for the year</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">(73,492,431</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">(37,215,483</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">(5,667,417</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Adjustments for:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Share-based compensation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">53,245,233</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,407,853</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">700,250</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Finance cost</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">58,726</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">62,383</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Interest income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(22</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(33,717</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(54,544</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Depreciation of property, plant and equipment &amp; investment property</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">729,393</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">757,516</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">771,130</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Amortization of intangible assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,477</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,958</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,980</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Amortization of prepayments and premiums paid under operating leases</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">66,748</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">81,474</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">94,699</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Provision/ (reversal) of inventory obsolescence</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">204,392</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,283</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(42,884</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Bad debt provision of trade receivables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,991,808</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,076,620</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,334,410</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Loss/(gain) on disposal of property, plant and equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">402</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">97,378</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">45,807</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Provision of impairment loss in property, plant and equipment &amp; investment property</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,944,979</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</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: 18pt">loss on disposal of subsidiary</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">9,193,736</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(30,642</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">Operating cash flows before movements in working capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,053,264</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(22,839,055</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,742,186</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -9pt; padding-left: 18pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">(Increase)/ decrease in trade and other receivables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(545,788</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,284,084</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,492,940</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">(Increase)/ decrease in inventories</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">438,849</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">547,593</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(267,472</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Prepayments and premiums paid under operating leases</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,267</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,411</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">210,901</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Increase/ (decrease) in trade and other payables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">262,510</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">515,003</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(579,948</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Increase/ (decrease) in income tax payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(56,451</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(175,469</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(92,321</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 18pt">(Increase)/ decrease in deferred tax assets</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">17,463,604</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,556,824</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">NET CASH USED IN OPERATING ACTIVITIES</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(4,957,411</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(7,775,819</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(6,520,790</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: -9pt; padding-left: 18pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -9pt; padding-left: 9pt">INVESTING ACTIVITIES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Interest received</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33,717</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">54,544</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Cash from acquisition of subsidiaries</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">561,424</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Cash increase/ (decrease) due to disposal of a subsidiary</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(9,442,759</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,612</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Proceeds on disposal of property, plant and equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,400</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,704</TD><TD STYLE="text-align: left">&nbsp;</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: 18pt">Purchase of property, plant and equipment</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,008</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(3,324,900</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(24,198</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">NET CASH FROM INVESTING ACTIVITIES</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(9,443,746</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(3,279,171</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">607,474</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -9pt; padding-left: 9pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -9pt; padding-left: 9pt">FINANCING ACTIVITIES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Interest paid</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(58,726</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(62,383</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">New bank loans raised</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,173,882</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -9pt; padding-left: 18pt">Repayment of borrowings</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,173,882</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 18pt">Advance from related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,220,098</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">117,697</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">909,237</TD><TD STYLE="text-align: left">&nbsp;</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: 18pt">Preferred stock subscription</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">6,900,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">NET CASH FROM FINANCING ACTIVITIES</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,220,098</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">6,958,971</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">846,854</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -9pt; padding-left: 9pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 9pt">NET DECREASE IN CASH AND CASH EQUIVALENTS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(12,181,059</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,096,019</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,066,462</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: -9pt; padding-left: 27pt">Effects of currency translation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(212,939</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">389,643</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,067,274</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">12,914,914</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">16,621,290</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">20,620,478</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt; text-indent: -9pt; padding-left: 9pt">CASH AND CASH EQUIVALENTS AT END OF YEAR</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">520,916</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">12,914,914</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">16,621,290</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Cash flows of discontinued operation are presented
in Note 17.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">The accompanying notes are an integral part of
these consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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


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<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; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><A NAME="f_005"></A>JX Luxventure limited</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Notes to Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">1.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">GENERAL INFORMATION</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">On January 26, 2012, Acquisition Investments
Corp (&ldquo;Company&rdquo;) was organized as a blank check company pursuant to the laws of the Republic of the Marshall Islands for the
purpose of acquiring through a merger, capital stock exchange, asset acquisition, stock purchase, or similar acquisition transaction,
one or more operating businesses or assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">On March 24, 2014, the Company entered
into a Share Exchange Agreement and Plan of Liquidation (the &ldquo;Agreement&rdquo;) among KBS International Holdings, Inc. (&ldquo;KBS&rdquo;),
a Nevada corporation, Hongri International Holdings Ltd (&ldquo;Hongri&rdquo;), a company organized under the laws of the British Virgin
Islands, and Cheung So Wa and Chan Sun Keung, the principal shareholders of KBS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">On August 1, 2014, the share exchange
was completed. The acquisition was accounted for as a reverse merger and recapitalization where the Company, the legal acquirer is the
accounting acquiree, and KBS, the legal acquiree, was the accounting acquirer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Description of Subsidiaries:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Hongri International Holdings Limited
(the &ldquo;Hongri&rdquo;), formerly known as Wah Ying International Investment Inc., was incorporated in the British Virgin Islands (the
&ldquo;BVI&rdquo;) on July 8, 2008 as a limited liability company with authorized share capital of $50,000, divided into 50,000 common
shares with $1 par value. Up through December 31, 2010, 10,000 common shares had been issued at par. On January 27, 2011, the Company
issued an additional 10,000 common shares for cash consideration at $77 per share. The principal activity of the Company is investment
holding. Hongri a directly wholly owned subsidiary of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">France Cock (China) Limited (&ldquo;France
Cock&rdquo;) was incorporated in Hong Kong on September 21, 2005 as a limited liability company with authorized capital of HK$10,000,
divided into 10,000 common shares with par value of HK$1. The capital has been fully paid up. The principal activity of France Cock is
the holding of intellectual property rights such as trademarks. France Cock owns the Company&rsquo;s trademarks, including &ldquo;KBS&rdquo;
and &ldquo;Kabiniao&rdquo;. France Cock is a directly wholly owned subsidiary of Hongri.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Roller Rome Limited (&ldquo;Roller Rome&rdquo;)
was incorporated in the BVI on March 28, 2006 as a limited liability company with authorized share capital of $50,000, divided into 50,000
common shares with par value of $1. The principal activity of Roller Rome is the provision of design and development services for sports
apparel. Roller Rome is a directly wholly owned subsidiary of Hongri.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></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; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Vast Billion Investment Limited (&ldquo;Vast
Billion&rdquo;) was incorporated in Hong Kong on November 25, 2010 as a limited liability company with authorized share capital of HK$10,000
divided into 10,000 ordinary shares with HK$1par value. One ordinary share has been issued at par. Vast Billion is an investment holding
company, and is a directly wholly owned subsidiary of Hongri.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Hongri (Fujian) Sports Goods Co. Ltd.
(&ldquo;Hongri Fujian&rdquo;) was established in the People&rsquo;s Republic of China (the &ldquo;PRC&rdquo;) on November 17, 2005 with
a registered and paid up capital of RMB 5,000,000. On March 24, 2011, Hongri Fujian increased registered capital from RMB 70,000,000 to
RMB75,000,000. As of September 30, 2011, the paid up capital was RMB 39,551,860. Hongri Fujian is engaged in the design, manufacture,
marketing, and sale of apparel in the PRC. Hongri Fujian is a directly wholly owned subsidiary of Vast Billion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Anhui Kai Xin Apparel Company Limited
(&ldquo;Anhui Kai Xin&rdquo;) was established in the PRC on March 16, 2011 with a registered and paid up capital of RMB 1,000,000. Anhui
Kai Xin is a wholly owned subsidiary of Hongri Fujian. Anhui Kai Xin provides contracting manufacturing services for companies in the
sports apparel business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">On October 19, 2022, the Company sold
Hongri International Holding Limited to third party and from thereon, Hongri, France Cock, Roller Rome, Vast Billion, Hongri Fujian, Anhui
Kai Xin are no longer the subsidiaries of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Flower Crown Holding is a company incorporated
on August 7, 2020 in the Cayman Islands. It has 50,000 shares issued and outstanding with a par value of $1. It is wholly owned by KBSF
Fashion Group Limited.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Flower Crown (China) Holding Group Co.,
Limited (&ldquo;Flower Crown HK&rdquo;) was incorporated in Hong Kong on May 24, 2018. It has a total of 10,000 shares issued and outstanding
with a par value of $1. It is wholly owned by Flower Crown Holding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Kim Hyun Technology (Tianjin) Co., Ltd.
(&ldquo;Kim Hyun Tianjin&rdquo;) was incorporated on July 23, 2020 in the PRC, as a wholly foreign-owned enterprise. Kim Hyun Tianjin
is 100% owned by Flower Crown HK. The total investment is RMB10,000,000, the registered capital is RMB10,000,000 and the present shareholder
shall pay up the registered capital prior to July 21, 2050. Kim Hyun Tianjin provides consulting in connection with information technology.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Jin Xuan (Hainan) Holding Co., Ltd (&ldquo;JX
Hainan&rdquo;) was incorporated in November 11, 2021. It has a registered capital of USD30,000,000. It is 100% owned by Flower Crow HK.
Its business scope ranges from import &amp; export to manufacturing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Jin Xuan Luxury Tourism (Hainan) Digital
Technology Co., Ltd. (&ldquo;Jin Xuan Luxury Tourism&rdquo;) was incorporated in the PRC on August 4, 2016. It is 100% owned by JX Hainan
.. It has a registered capital of RMB20,000,000 and present shareholder shall pay up the registered capital prior to August 4, 2046. It
operates Luxventure social platform and on-line activities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Beijing Heyang International Travel Service
Co., Ltd. (&ldquo;Heyang Travel&rdquo;) was incorporated in the PRC on March 29, 2018. It is 100% owned by Jin Xuan Luxury Tourism. It
has a registered capital of RMB5,000,000 and the shareholder shall pay up the registered capital prior to August 1, 2060. Heyang Travel
engages in tourism business and selling carrier services.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></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; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">2.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">GROUP ORGANIZATION AND BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Effective December 13, 2021, the Company
reorganized its corporate subsidiary structure in the PRC under Flower Crown Holding. As a result of the Flower Crown Holding&rsquo;s
China subsidiaries restructuring, the Company no longer operated those entities through a VIE structure and became the indirect sole shareholder
of JX Hainan Digital and Beijing Heyang.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The Group structure as at the reporting
date is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><IMG SRC="image_009.jpg" ALT="">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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


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<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; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">3.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (&ldquo;IFRS&rdquo;)</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">For the year ended December 31, 2022
the Company has consistently adopted all the new and revised standards, amendments and interpretations (collectively IFRSs) issued by
the International Accounting Standards Board (&ldquo;IASB&rdquo;) and the IFRS Interpretations Committee (formerly known as &ldquo;International
Financial Reporting Interpretations Committee&rdquo; (&ldquo;IFRIC&rdquo;)) of the IASB that are effective for financial year beginning
on January 1, 2022 in the preparation of the consolidated financial statements throughout the year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">For the year ended December 31, 2022,
the following new and revised standards, amendments or interpretations that have become effective during the reporting period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px">&nbsp;</TD>
    <TD STYLE="width: 28px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">IFRS Accounting Taxonomy 2021&mdash;Update 1 Disclosure of Accounting Policies and Definition of Accounting Estimates</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify; text-indent: 2.5pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px">&nbsp;</TD>
    <TD STYLE="width: 28px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">IFRS Accounting Taxonomy 2021&mdash;Update 2 Technology Update</FONT></TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">IFRS Accounting Taxonomy 2021&mdash;Update 3 Initial Application of IFRS 17 and IFRS 9&mdash;Comparative Information</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The adoption of the above new and revised
standards had no significant financial effect on these financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The following new standards and amendments
to standards have not come into effect for the financial year beginning January 1, 2022, and have not been early adopted by the Company
in preparing these consolidated financial statements. None of these new standards and amendments to standards is expected to have a significant
effect on the consolidated financial statements of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px">&nbsp;</TD>
    <TD STYLE="width: 28px; text-align: justify"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Lease Liability in a Sale and Leaseback Amendments to IFRS 16</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px">&nbsp;</TD>
    <TD STYLE="width: 28px; text-align: justify"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Non-current Liabilities with Covenants</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify; text-indent: 2.5pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 36pt"></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">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">4.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">SIGNIFCANT ACCOUNTING POLICIES</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The principal accounting policies adopted
in the preparation of the financial statements are set out below. The policies have been consistently applied to all the years presented,
unless otherwise stated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Basis of preparation</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The consolidated financial statements
have been prepared on the historical cost basis and in accordance with IFRS as issued by the IASB. The principal accounting policies are
set out below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The consolidated financial statements
incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). Control is achieved where
the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Where necessary, adjustments are made
to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">All intra-group transactions, balances,
income and expenses are eliminated on consolidation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Foreign currencies</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Functional and presentation currency</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Items included in the financial statements
are measured using the currency of the primary economic environment in which the entity operates (the &ldquo;functional currency&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The Group conducts its business predominately
in the PRC and hence its functional currency is the Renminbi (RMB).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Translation from RMB to USD found place
at the following rates:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Period end rates</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Average rates</B></FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">December 31, 2020</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 20%; text-align: center"><FONT STYLE="font-size: 10pt">USD 1.00= RMB 6.5277</FONT></TD>
    <TD STYLE="vertical-align: top; width: 1%; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 1%; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 20%; text-align: center"><FONT STYLE="font-size: 10pt">USD 1.00=RMB 6.9001</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD></TR>
  <TR STYLE="background-color: white">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">December 31, 2021</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt">USD 1.00= RMB 6.3524</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt">USD 1.00=RMB 6.4491</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
  <TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">December 31, 2022</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt">USD 1.00= RMB 6.8987</FONT></TD>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt">USD 1.00=RMB 6.7347</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></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; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Translation from HKD to USD found place
at the following rates:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Period end rates</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Average rates</B></FONT></TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">December 31, 2020</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 20%; text-align: center"><FONT STYLE="font-size: 10pt">USD 1.00= HKD 7.7525</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 20%; text-align: center"><FONT STYLE="font-size: 10pt">USD 1.00=HKD 7.7558</FONT></TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD></TR>
  <TR STYLE="background-color: white">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">December 31, 2021</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt">USD 1.00= HKD 7.7991</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt">USD 1.00=HKD 7.7731</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
  <TR STYLE="background-color: #CCEEFF">
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">December 31, 2022</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt">USD 1.00= HKD 7.7970 </FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"><FONT STYLE="font-size: 10pt">USD 1.00=HKD 7.8305</FONT></TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The results and financial positions in
functional currency are translated into the presentation currency, USD, of the Company as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">(1)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">(2)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions);</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">(3)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Share equity, share premium and dividends are translated at historical exchange rates; and</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">(4)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">All resulting exchange differences are recognized in foreign currency translation reserve, a separate component of equity.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">All financial information presented in
USD has been rounded to the nearest dollar, except when otherwise indicated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Segment reporting</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Operating segments, and the amounts of
each segment item reported in the financial statements, are identified from the financial information provided regularly to the Group&rsquo;s
most senior executive management for the purposes of allocating resources to, and assessing the performance of, the Group&rsquo;s various
lines of business and geographical locations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Individually material operating segments
are not aggregated for financial reporting purposes unless the segments have similar economic characteristics and are similar in respect
of the nature of products and services, the nature of production processes, the type or class of customers, the methods used to distribute
the products or provide the services, and the nature of the regulatory environment. Operating segments which are not individually material
may be aggregated if they share a majority of these criteria. The Group&rsquo;s five segments are wholesale, retail, contract manufacturing,
tourism service and cross-border e-commerce.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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


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    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<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; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Revenue recognition</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><I>Revenue from contracts with
customers</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Revenue from contracts with customers
is recognized when control of goods or services is transferred to the customers at an amount that reflects the consideration to which
the Company expects to be entitled in exchange for those goods or services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">When the consideration in a contract
includes a variable amount, the amount of consideration is estimated to which the Company will be entitled in exchange for transferring
the goods or services to the customer. The variable consideration is estimated at contract inception and constrained until it is highly
probable that a significant revenue reversal in the amount of cumulative revenue recognized will not occur when the associated uncertainty
with the variable consideration is subsequently resolved. Currently, the Company&rsquo;s contracts do not include such variable amount.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">When the contract contains a financing
component which provides the customer a significant benefit of financing the transfer of goods or services to the customer for more than
one year, revenue is measured at the present value of the amount receivable, discounted using the discount rate that would be reflected
in a separate financing transaction between the Company and the customer at contract inception. When the contract contains a financing
component which provides the Company a significant financial benefit for more than one year, revenue recognized under the contract includes
the interest expense accreted on the contract liability under the effective interest method. For a contract where the period between the
payment by the customer and the transfer of the promised goods or services is one year or less, the transaction price is not adjusted
for the effects of a significant financing component, using the practical expedient in IFRS 15. Currently, the Company&rsquo;s contract
with its customers do not include financial benefit for more than one year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.4pt; text-align: justify; text-indent: 0.55pt">Nature and timing
of satisfaction of performance obligations for each of the revenue streams are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><I><U>Revenue from the sale of goods</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Performance obligation is satisfied at
the point in time when control of the asset is transferred to the customer, generally on delivery and acceptance of the goods. The Company
presents revenues from such transactions on a gross basis in the consolidated statements of comprehensive loss, as the Company acts as
a principal to take inventory risks of these goods.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><I><U>Revenue from the sale of packaged
group tour service</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Performance obligation is satisfied when
the tour service is completed, generally when the tour group successfully returned from the tour destination to the place of origination.
The Company presents revenues from such transactions on a gross basis in the consolidated statements of comprehensive loss, as the Company
acts as a principal to provide a package of tourism services and take a full obligation to provide such services even if the suppliers
are not able to deliver service.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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


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    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<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; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><I><U>Revenue from reselling of air-ticket</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The Company is a reseller of air-ticket,
it provides value add services to its customers including guaranteed flight replacement and other financial benefits. The revenue is recognized
when performance obligation has been satisfied, which could be significantly after the ticket sale. The Company recognizes gross revenue
with an expense from the cost of purchasing from the supplier.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><I><U>Other income</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Interest income is recognized on an accrual
basis using the effective interest method by applying the rate that exactly discounts the estimated future cash receipts over the expected
life of the financial instrument or a shorter period, when appropriate, to the net carrying amount of the financial asset.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt">Rental income is recognized
on a time proportion basis over the lease terms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Dividend income is recognized when the
shareholders&rsquo; right to receive payment has been established, it is probable that the economic benefits associated with the dividend
will flow to the Company and the amount of the dividend can be measured reliably.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Value added tax (VAT)</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Current standard Output VAT in effect
is 13% and 6% of product sales and taxable services revenue, respectively, according to existing tax laws. The remaining balance of output
VAT, after subtracting the deductible input VAT of the period, is VAT payable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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">Type of revenue</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Standard VAT rate in effect for revenues</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 88%; text-align: left">Product sales</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">13</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Services rendered</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6</TD><TD STYLE="text-align: left">%</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Borrowing costs</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Borrowing costs directly attributable
to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time
to get ready for their intended use or sale, are added to the cost of those assets until such time as the assets are substantially ready
for their intended use or sale.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">All other borrowing costs are recognized
in profit or loss in the period in which they are incurred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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


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    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Retirement benefit costs</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Pursuant to the relevant regulations
of the PRC government, the Group&rsquo;s subsidiaries located in the PRC participate in a local municipal government retirement benefits
scheme (the &ldquo;Scheme&rdquo;), whereby they contribute a prescribed percentage of the basic salaries of their employees to the Scheme
to fund their retirement benefits. Once the Scheme has been funded via contributions by the Group&rsquo;s participating subsidiaries,
the local municipal government takes responsibility for the retirement benefits obligations of all existing and future retired employees
of those subsidiaries located in the PRC; accordingly, the only obligation of the Group with respect to the Scheme is to pay the on-going
required contributions as long as the employees maintain employment with the Group. There are no provisions under the Scheme whereby forfeited
contributions may be used to reduce future contributions. These plans are considered defined contribution plans. The Group has no legal
or constructive obligations to pay further contributions after its payment of the fixed contributions into the pension schemes. Contributions
to pension schemes are recognized as an expense in the period in which the related service is performed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Taxation</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The tax expense for the period comprises current and deferred tax.
Tax is recognized in the income statement, except to the extent that it relates to items recognized in other comprehensive income or directly
in equity. In this case the tax is also recognized in other comprehensive income or directly in equity, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The current income tax charge is calculated
on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Group operates and
generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable
tax regulation is subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to
the tax authorities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Deferred tax is recognized on temporary
differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax
bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences.
Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits
will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not
recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of
other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Deferred tax liabilities are recognized
for taxable temporary differences associated with investments in subsidiaries, except where the Group is able to control the reversal
of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax
assets arising from deductible temporary differences associated with such investments are only recognized to the extent that it is probable
that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected
to reverse in the foreseeable future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The carrying amount of deferred tax assets
is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits
will be available to allow all or part of the asset to be recovered.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Deferred tax assets and liabilities are
measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax
rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax
liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting
period, to recover or settle the carrying amount of its assets and liabilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

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


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<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 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Deferred income tax assets and liabilities
are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred
income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different
taxable entities where there is an intention to settle the balances on a net basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Current and deferred tax are recognized
in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which
case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively. Where current
tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the
business combination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Store pre-opening cost</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Store pre-opening cost was the start-up
activity costs incurred prior to opening a new store, mainly including leasing, leasehold improvements, payroll and supplies. The accounting
policies for leasing and leasehold improvements were as below. Other store pre-opening costs were directly charged to expenses when occurred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Leasing</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">IFRS 16 Leases requires lessees to recognize
assets and liabilities for most leases based on a &lsquo;right-of-use model&rsquo; which reflects that, at the commencement date, a lessee
has a financial obligation to make lease payments to the lessor for its right to use the underlying asset during the lease term. The lessor
conveys that right to use the underlying asset at lease commencement, which is the time when it makes the underlying asset available for
use by the lessee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">IFRS 16 defines a lease term as the noncancellable
period for which the lessee has the right to use an underlying asset including optional periods when an entity is reasonably certain to
exercise an option to extend (or not to terminate) a lease.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Under IFRS 16 lessees may also elect not to recognize assets and liabilities
for leases with a lease term of 12 months or less. In such cases a lessee recognizes the lease payments in profit or loss on a straight-line
basis over the lease term. The exemption is required to be applied by class of underlying assets. Lessees can also make an election for
leases for which the underlying asset is of low value. This election can be made on a lease-by-lease basis. For leases where the Group
is the lessee, the lease term is either cancelable or no longer than 12 months, so the Group has elected not to record the leased assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Lessor accounting under IFRS 16 is substantially
unchanged from IAS 17. Lessors continue to classify leases as either operating or finance leases using similar principles as in IAS 17.
IFRS 16 did not have any significant impact on leases where the Group is the lessor.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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


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<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; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Leasehold improvements</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Leasehold improvements, principally comprising
costs of office buildings and shops renovation, are held for administrative and selling purposes. Leasehold improvements are initially
measured at cost and amortized systematically over its useful life.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Property, plant and equipment</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Property, plant and equipment (&ldquo;PPE&rdquo;)
including buildings held for use in the production or supply of goods or services, or for administrative purposes other than construction
in progress are stated at cost less subsequent accumulated depreciation and accumulated impairment losses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Depreciation is provided to write off
the cost of items of property, plant and equipment other than construction in progress over their estimated useful lives and after taking
into account of their estimated residual value, using the straight-line method.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Construction in progress includes property,
plant and equipment in the course of construction for production or for its own use purposes. Construction in progress is carried at cost
less any recognized impairment loss. Construction in progress is classified to the appropriate category of property, plant and equipment
when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the
assets are ready for their intended use.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">An item of property, plant and equipment
is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain
or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount
of the item) is included in profit or loss in the period in which the item is de-recognized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Investment properties</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Investment properties are land and buildings
which are owned or held under a leasehold interest to earn rental income and/or for capital appreciation. These include land and buildings
held for a currently undetermined future use. Such properties are stated at cost less accumulated depreciation and any impairment losses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Any gains or losses on the retirement or disposal of an investment
property are recognized in the income statement in the year of the retirement or disposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Depreciation is calculated on the straight-line
basis to depreciate the cost of each item of investment properties over the estimated useful life of 20 years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>The Group as lessor</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Rental income from operating leases is
recognized in profit or loss on a straight-line basis over the term of the relevant lease.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

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


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<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 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Land use rights</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Land use rights are stated at cost less
accumulated amortization and accumulated impairment losses. Cost represents consideration paid for the rights to use the land on which
various plants and buildings are situated for periods varying from 20 to 50 years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Amortization of land use rights is calculated
on a straight-line basis over the period of the land use rights.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Inventories</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Inventories, comprising of raw materials
and merchandise inventories, are stated at the lower of cost and net realizable value. Costs of inventories are determined using the weighted
average method. Net realizable value represents the estimated selling price for inventories less all estimated costs of completion and
costs necessary to make the sale.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Cash and cash equivalents</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Cash and cash equivalents includes cash
on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three
months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Share-based compensation expenses</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">All share-based awards granted to employees, which are common shares,
are measured at fair value on shares issuance date, and are recognized as an employee benefits expense, with a corresponding increase
in equity. Share-based compensation expenses are recognized over the period during which the employees provide the relevant services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Financial instruments &ndash; investments
and other financial assets</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 36pt"><I>Initial recognition and
measurement</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Financial assets are classified, at initial
recognition, as subsequently measured at amortized cost, fair value through other comprehensive income, and fair value through profit
or loss.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The classification of financial assets
at initial recognition depends on the financial asset&rsquo;s contractual cash flow characteristics and the Group&rsquo;s business model
for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Group
has applied the practical expedient of not adjusting the effect of a significant financing component, the Group initially measures a financial
asset at its fair value, plus in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables
that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction
price determined under IFRS 15 in accordance with the policies set out for &ldquo;Revenue recognition&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">In order for a financial asset to be
classified and measured at amortized cost or fair value through other comprehensive income, it needs to give rise to cash flows that are
solely payments of principal and interest (&ldquo;SPPI&rdquo;) on the principal amount outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The Group&rsquo;s business model for
managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines
whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">All regular way purchases and sales of
financial assets are recognized on the trade date, that is, the date that the Group commits to purchase or sell the asset. Regular way
purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established
by regulation or convention in the marketplace.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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


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<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; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><I>Subsequent measurement</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The subsequent measurement
of financial assets depends on their classification as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><I>Financial assets at amortized
cost (debt instruments)</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The Group measures
financial assets at amortized cost if both of the following conditions are met:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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: 48px"></TD><TD STYLE="width: 28px; text-align: left"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">The financial asset is held
within a business model with the objective to hold financial assets in order to collect contractual cash flows.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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: 48px"></TD><TD STYLE="width: 28px; text-align: left"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">The contractual terms of the
financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount
outstanding.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Financial assets at amortized cost are
subsequently measured using the effective interest method and are subject to impairment. Gains and losses are recognized in the income
statement when the asset is derecognized, modified or impaired.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><I>Financial assets at fair
value through other comprehensive income (debt instruments)</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The Group measures debt instruments
at fair value through other comprehensive income if both of the following conditions are met:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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: 48px"></TD><TD STYLE="width: 28px; text-align: left"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">The financial asset is held
within a business model with the objective of both holding to collect contractual cash flows and selling.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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: 48px"></TD><TD STYLE="width: 28px; text-align: left"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">The contractual terms of the
financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount
outstanding.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">For debt instruments at fair value through
other comprehensive income, interest income, foreign exchange revaluation and impairment losses or reversals are recognized in the income
statement and computed in the same manner as for financial assets measured at amortized cost. The remaining fair value changes are recognized
in other comprehensive income. Upon derecognition, the cumulative fair value change recognized in other comprehensive income is recycled
to the income statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><I>Financial assets at fair
value through other comprehensive income (equity investments)</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Upon initial recognition, the Group
can elect to classify irrevocably its equity investments as equity investments designated at fair value through other comprehensive income
when they meet the definition of equity under HKAS 32 Financial Instruments: Presentation and are not held for trading. The classification
is determined on an instrument-by-instrument basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Gains and losses on these financial
assets are never recycled to the income statement. Dividends are recognized as other income in the income statement when the right of
payment has been established, it is probable that the economic benefits associated with the dividend will flow to the Group and the amount
of the dividend can be measured reliably, except when the Group benefits from such proceeds as a recovery of part of the cost of the financial
asset, in which case, such gains are recorded in other comprehensive income. Equity investments designated at fair value through other
comprehensive income are not subject to impairment assessment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><I>Financial assets at fair
value through profit or loss</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Financial assets at fair value through
profit or loss include financial assets held for trading, financial assets designated upon initial recognition at fair value through profit
or loss, or financial assets mandatorily required to be measured at fair value. Financial assets are classified as held for trading if
they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives,
are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets with cash flows
that are not solely payments of principal and interest are classified and measured at fair value through profit or loss, irrespective
of the business model. Notwithstanding the criteria for debt instruments to be classified at amortized cost or at fair value through other
comprehensive income, as described above, debt instruments may be designated at fair value through profit or loss on initial recognition
if doing so eliminates, or significantly reduces, an accounting mismatch.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Financial assets at fair value through
profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognized in the income
statement. This category includes derivative financial instruments and structured bank deposits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">A derivative embedded in a hybrid contract,
with a financial liability or non-financial host, is separated from the host and accounted for as a separate derivative if the economic
characteristics and risks are not closely related to the host; a separate instrument with the same terms as the embedded derivative would
meet the definition of a derivative; and the hybrid contract is not measured at fair value through profit or loss. Embedded derivatives
are measured at fair value with changes in fair value recognized in the income statement. Reassessment only occurs if there is either
a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification
of a financial asset out of the fair value through profit or loss category.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">A derivative embedded within a hybrid
contract containing a financial asset host is not accounted for separately. The financial asset host together with the embedded derivative
is required to be classified in its entirety as a financial asset at fair value through profit or loss.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Financial instruments &ndash;
impairment of financial assets </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The Group recognizes an allowance for
ECLs for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual
cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation
of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>General approach</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">ECLs are recognized in two stages. For
credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit
losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which
there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected
over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">At each reporting date, the Group assesses
whether the credit risk on a financial instrument has increased significantly since initial recognition. When making the assessment, the
Group compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring
on the financial instrument as at the date of initial recognition and considers reasonable and supportable information that is available
without undue cost or effort, including historical and forward-looking information.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The Group considers a financial asset
in default when contractual payments are 120 days past due. However, in certain cases, the Group may also consider a financial asset to
be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts
in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable
expectation of recovering the contractual cash flows.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Debt instruments at fair value through
other comprehensive income and financial assets at amortized cost are subject to impairment under the general approach and they are classified
within the following stages for measurement of ECLs except for trade receivables which apply the simplified approach as detailed below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Stage 1 &ndash; Financial instruments
for which credit risk has not increased significantly since initial recognition and for which the loss allowance is measured at an amount
equal to 12-month ECLs</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Stage 2 &ndash; Financial instruments
for which credit risk has increased significantly since initial recognition but that are not credit-impaired financial assets and for
which the loss allowance is measured at an amount equal to lifetime ECLs</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Stage 3 &ndash; Financial assets that
are credit-impaired at the reporting date (but that are not purchased or originated credit-impaired) and for which the loss allowance
is measured at an amount equal to lifetime ECLs</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Simplified approach</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">For trade receivables that do not contain
a significant financing component or when the Group applies the practical expedient of not adjusting the effect of a significant financing
component, the Group applies the simplified approach in calculating ECLs. Under the simplified approach, the Group does not track changes
in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision
matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic
environment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">For trade receivables that contain a
significant financing component and lease receivables, the Group chooses as its accounting policy to adopt the simplified approach in
calculating ECLs with policies as described above.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Financial instruments &ndash;
derecognition of financial assets </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">A financial asset (or, where applicable,
a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Group&rsquo;s
consolidated statement of financial position) when:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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: 48px"></TD><TD STYLE="width: 28px; text-align: left"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">the rights to receive cash
flows from the asset have expired; or</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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: 48px"></TD><TD STYLE="width: 28px; text-align: left"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">the Group has transferred its
rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay
to a third party under a &ldquo;pass-through&rdquo; arrangement; and either (a) the Group has transferred substantially all the risks
and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset,
but has transferred control of the asset.</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">When the Group has transferred its rights
to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained
the risk and rewards of ownership of the asset. When it has neither transferred nor retained substantially all the risks and rewards of
the asset nor transferred control of the asset, the Group continues to recognize the transferred asset to the extent of the Group&rsquo;s
continuing involvement. In that case, the Group also recognizes an associated liability. The transferred asset and the associated liability
are measured on a basis that reflects the rights and obligations that the Group has retained.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Continuing involvement that takes the
form of a guarantee over the transferred asset is measured at the lower of the original amount of the asset and the maximum amount of
consideration that the Group could be required to repay.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Financial instruments &ndash;
financial liabilities</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><I>Initial recognition and
measurement</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">All financial liabilities are recognized
initially at fair value and, in the case of loans and borrowings, net of directly attributable transaction costs. The Group&rsquo;s financial
liabilities include trade payables, other payables, financial liabilities included in accruals and interest-bearing bank borrowings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><I>Subsequent measurement</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">After initial recognition, interest-bearing
loans and borrowings are subsequently measured at amortized cost, using the effective interest rate method unless the effect of discounting
would be immaterial, in which case they are stated at cost. Gains and losses are recognized in the income statement when the liabilities
are derecognized as well as through the effective interest rate amortization process.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Amortized cost is calculated by taking
into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective
interest rate amortization is included in finance costs in the income statement.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Financial instruments &ndash;
derecognition of financial liabilities</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">A financial liability is derecognized
when the obligation under the liability is discharged or cancelled, or expires.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">When an existing financial liability
is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as a derecognition of the original liability and a recognition of a new liability,
and the difference between the respective carrying amounts is recognized in the income statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Financial instruments &ndash;
offsetting financial instruments </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Financial assets and financial liabilities
are offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset
the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Capital and Reserves</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Share capital represents the nominal
value of shares that have been issued by the Group. Share capital is determined using the nominal value of shares that have been issued.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Retained profits include all current
and prior period results as determined in the combined statement of comprehensive income.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Foreign currency translation reserve
arising on the translation are included in the currency translation reserve.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">In accordance with the relevant laws
and regulations of PRC, the subsidiaries of the Group established in PRC are required to transfer 10% of its annual statutory net profit
(after offsetting any prior years&rsquo; losses) to the statutory reserve. When the balance of such reserve reaches 50% of the subsidiary&rsquo;s
share capital, any further transfer of its annual statutory net profit is optional. Such reserve may be used to offset accumulated losses
or to increase the registered capital of the subsidiary subject to the approval of the relevant authorities. However, except for offsetting
prior years&rsquo; losses, such statutory reserve must be maintained at a minimum of 25% of the share capital after such usage. The statutory
reserves are not available for dividend distribution to the shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">All transactions with owners of the
Group are recorded separately within equity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Earnings/(loss) per share</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Basic earnings per share (&ldquo;EPS&rdquo;)
are computed by dividing income attributable to holders of common shares by the weighted average number of common shares outstanding during
the year. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised
or converted into common shares. Potential dilutive securities are excluded from the calculation of diluted EPS in loss periods as their
effect would be anti-dilutive.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The preparation of financial statements
in conformity with IFRS requires management to exercise judgment in the process of applying the Group&rsquo;s accounting policies and
requires the use of accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of financial statements and reported amount of revenue and expenses during the reporting
period. The following estimates that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities
within the next financial year are disclosed below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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"><FONT STYLE="font-size: 10pt">5.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">SIGNIFICANT MANAGEMENT JUDGEMENT
IN APPLYING ACCOUNTING POLICIES</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Allowance for Bad and Doubtful debts</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Allowances for bad and doubtful debts
are based on an assessment of the recoverability of trade and other receivables. Allowances are applied to trade and other receivables
where events or changes in circumstances indicate that the balances may not be collectible. The identification of bad and doubtful debts
requires the use of judgment and estimates, where the expected outcome is different from the original estimate, such difference will impact
carrying value of trade and other receivables and doubtful debt expenses in the period in which such estimate has been charged.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Impairment Losses</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Impairment losses are based on an assessment
of the investment or long-lived assets&rsquo; ability to generate future cash flows when there is evidence that these assets may be impaired.
The calculation of the amount of impairment loss are based on estimates made by management when applying broad accounting principles governing
the accounting for these assets. The determination of these estimates requires judgment by management. The final outcome may differ from
the original estimates made by management, which may impact the carrying value of the assets which management has determined to be impaired
and charged to the Company&rsquo;s profit loss during the period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Provisions</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Provisions for legal claims, service warranties and make good obligations
are recognized when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow
of resources will be required to settle the obligation, and the amount can be reliably estimated. Provisions are not recognized for future
operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined
by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any
one item included in the same class of obligations may be small.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Provisions are measured at the present
value of management<FONT STYLE="font-family: Times New Roman, Times, Serif">&rsquo;</FONT>s best estimate of the expenditure required
to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax
rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the
provision due to the passage of time is recognized as interest expense.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Income Tax</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The Group has exposure to income taxes
in numerous jurisdictions. Significant judgment is involved in determining the Group&rsquo;s provision for income taxes. There are certain
transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group
recognizes liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome
of these matters is different from the amounts that were initially recognized, such differences will impact the income tax and differed
tax provisions in the period in which such determination is made. The carrying amount of the Group&rsquo;s income tax payable as at December
31, 2022 and 2021 amounted to $212 and zero respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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"><FONT STYLE="font-size: 10pt">6.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">KEY SOURCES OF ESTIMATION UNCERTAINTY</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">In the application of the Group&rsquo;s
accounting policies, which are described in Note 4, management is required to make estimates and assumptions about the carrying amounts
of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual results may differ from these estimates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the
revision affects only that period or in the period of the revision and future periods if the revision affects both current and future
periods.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The following are the key assumptions
concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk
of causing a material adjustment to the carrying amounts of assets within the next financial year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Depreciation of building, machinery
and equipment</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">As described in Note 4, the Group reviews
the estimated useful lives and residual values of property, plant and equipment at the end of each reporting period. The cost of building,
machinery and equipment is depreciated on a straight-line basis over the assets&rsquo; estimated useful lives. Management estimates the
useful lives of these buildings, machinery and equipment to be within 5 to 20 years. These are the common life expectancies applied in
the same industry. Changes in the expected level of usage and technological developments could impact the economic useful lives and the
residual values of these assets, therefore future depreciation charges could be revised.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Impairment of non-financial assets</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Property, plant and equipment are tested
for impairment whenever there is any objective evidence or indication that these assets may be impaired.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">For the purpose of impairment testing,
the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset
basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, the
recoverable amount is determined for the cash-generating-unit (&ldquo;CGU&rdquo;) to which the asset belongs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">If the recoverable amount of the asset
(or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The difference between the carrying
amount and recoverable amount is recognized as an impairment loss in the income statement, unless the asset is carried at revalued amount,
in which case, such impairment loss is treated as a revaluation decrease.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">An impairment loss for an asset other
than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the asset&rsquo;s recoverable amount
since the last impairment loss was recognized. The carrying amount of this asset is increased to its revised recoverable amount, provided
that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation)
had no impairment loss been recognized for the asset in prior years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">A reversal of impairment loss for an
asset other than goodwill is recognized in the income statement, unless the asset is carried at revalued amount, in which case, such reversal
is treated as a revaluation increase.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">During the years ended December 31,
2022, 2021, and 2020, the Company recognized impairment losses of $nil, $nil, and $nil, respectively, for its prepayments for acquisition
of land use rights. During the years ended December 31, 2022, 2021, and 2020, the Company recognized impairment losses of $nil, $nil,
and $nil, respectively, for its related prepayments for construction on such land. The impairment reflects the current reduction in the
value of the investment as a result of the delay in time to complete the construction projects and delay in procurement of legal certificates
that would lead to the assets being put into service that would give rise to expected future profitability which at December 31, 2020,
has been temporarily postponed beyond the next operating period. The impairment losses charged to the prepayments has brought the carrying
values to their respective recoverable amount in its fair value less costs to sell.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">During the years ended December 31,
2022, 2021, and 2020, the Company recognized impairment losses of $nil, $ nil, and $nil, respectively, for a part of its factory plant
in Anhui that is not currently in use. The impairment reflects the current reduction in the value of the carrying cost as a result of
the company&rsquo;s evaluation of the recoverability of its investment. The impairment losses charged to the factory plant has brought
the carrying values to their respective recoverable amount in its fair value less costs to sell.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">For the prepayment for acquisition of
land use rights, the Company provided an estimate of its fair value based on the market value substitution rule. The estimated fair value
belongs to Level 2 of the fair value hierarchy because the input is determined through quoted prices of similar assets without an actively
quoted market. Using the market approach, the Company compares the price of the land use right that the Company intended to acquire with
the price of similar land use rights in the same geographical area, adjusted by factors such as price index, frequency of actual transactions
conducted, environmental conditions, etc. Significant assumptions used in this estimation include the ability to legally obtain such land
use rights, the usage of land as industrial use, the date of transaction at year end, etc. As a result, the Company provided an estimate
in the amount of $5,154,034. Finally, the fair value is reduced by estimated costs to sell which include, but not limited to, legal costs,
stamp duty, similar transaction tax, etc. in the amount of $379,971. The net value is then compared to the carrying value, and the difference
is recorded as impairment loss in the amount of $1,317,295 in 2015. In 2016, since there was no progress in regards to the acquisition
of land use rights, the Company provided further impairment to bring the carrying value down to $0 as management is unable to assert the
recoverability of such asset.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">For the prepayment for construction,
the Company provided an estimate of its fair value based on the time value approach. The estimated fair value belongs to Level 3 of the
fair value hierarchy because the input is not easily observable. Using this approach, the Company calculates the time value of money of
the amount prepaid based on the Company&rsquo;s weighted average cost of capital (&ldquo;WACC&rdquo;) in order to arrive at its fair value.
The Company uses this approach to determine its recoverable amount because such prepayments are not readily resalable, and the ability
to realize this amount is contingent upon the Company&rsquo;s ability to successfully acquire the land use right as mentioned above. Significant
assumptions used in this estimation include using the WACC, which is comprised of the Company&rsquo;s metrics of return of equity, return
of debt, the relevant weights of the returns of equity and debt, and tax rate, in determining the fair value. As a result, as at December
31, 2015, the Company provided an estimate in the amount of $7,160,523. Since this asset is not resalable, the company estimated costs
to sell for this asset in the amount of $0. The net value is then compared to the carrying value, and the difference is recorded as impairment
loss in the amount of $1,248,039 in 2015. In 2017, since there was no progress in regards to the construction, the Company provided further
impairment to bring the carrying value down to $0 as management is unable to assert the recoverability of such asset.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">For the factory plant, the Company provided
an estimate of its fair value based on the time value approach. The estimated fair value belongs to Level 3 of the fair value hierarchy
because the input is not easily observable. Using this approach, the Company calculates the time value of money of the amount recoverable
based on the Company&rsquo;s weighted average cost of capital (&ldquo;WACC&rdquo;) in order to arrive at its fair value. The Company uses
this approach to determine its recoverable amount because a part of the factory plant is not readily resalable. Significant assumptions
used in this estimation include using the WACC, which is comprised of the Company&rsquo;s metrics of return of equity, return of debt,
the relevant weights of the returns of equity and debt, and tax rate, in determining the fair value. As a result, as at December 31, 2018,
the Company recorded as impairment loss in the amount of $13,311,557 in 2018, which brings the carrying value of the part of the factory
plant not in use down to $0 as management is unable to assert the recoverability of such asset.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">During the year ended December 31, 2021,
the Company recognized impairment loss of $2,673,131 and $48,859 for Investment property and property, plants and buildings, respectively.
The Company further recognized impairment loss of $ 222,989 for the two land use rights which the two properties were built on. The impairment
reflects the current reduction in the value of the carrying cost as a result of the company&rsquo;s evaluation of the recoverability of
its investment. The impairment losses charged to the two pieces of properties and land use rights has brought the carrying values to their
respective recoverable amount in its fair value less costs to sell.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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"><FONT STYLE="font-size: 10pt">7.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">SEGMENT REPORTING</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Management currently identifies the
Group&rsquo;s three sales models as operating segments, which are tourism products, technology and cross board merchandise. Apart from
the above two business segments, two segments were discontinued in 2022, which are wholesale and retail of menswear and subcontracting
of menswear. The segment presentation is in accordance with management&rsquo;s expectation of future business developments. These operating
segments are monitored and strategic decisions are made on the basis of segmental gross margins.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>



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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Tourism products</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Technology</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Cross- board merchandise</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Consolidated</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center">For the year ended</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center">For the year ended</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center">For the year ended</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center">For the year ended</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">December&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; border-bottom: Black 1.5pt solid; font-weight: bold">By business</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>

<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; width: 28%">Sales to external customers</TD><TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">79,092,342</TD><TD STYLE="width: 0.5in; text-align: left">&nbsp;</TD><TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">51,818,166</TD><TD STYLE="width: 0.5in; text-align: left">&nbsp;</TD><TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">991,929</TD><TD STYLE="width: 0.5in; text-align: left">&nbsp;</TD><TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">782,302</TD><TD STYLE="width: 0.5in; text-align: left">&nbsp;</TD><TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">-</TD><TD STYLE="width: 0.5in; text-align: left">&nbsp;</TD><TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">-</TD><TD STYLE="width: 0.5in; text-align: left">&nbsp;</TD><TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">83</TD><TD STYLE="width: 0.5in; text-align: left">&nbsp;</TD><TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">2,222,782</TD><TD STYLE="width: 0.5in; text-align: left">&nbsp;</TD><TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">343,445</TD><TD STYLE="width: 0.5in; text-align: left">&nbsp;</TD><TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">79,874,727</TD><TD STYLE="width: 0.5in; text-align: left">&nbsp;</TD><TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">54,040,948</TD><TD STYLE="width: 0.5in; text-align: left">&nbsp;</TD><TD STYLE="width: 0.5in">&nbsp;</TD>
    <TD STYLE="width: 0.5in; text-align: left">&nbsp;</TD><TD STYLE="width: 6%; text-align: right">1,335,374</TD><TD STYLE="width: 0.5in; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in">Segment revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">79,092,342</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">51,818,166</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">991,929</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">782,302</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">83</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,222,782</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">343,445</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">79,874,727</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">54,040,948</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,335,374</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in">Segment gross margins</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">704,391</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">541,889</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">96,578</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">760,028</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">64</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">305,822</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">69,988</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,464,483</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">847,711</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">166,566</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in">Reconciling items</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(56,847,143</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8,194,585</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,161,859</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-indent: -0.125in; text-align: left">Loss&nbsp;&nbsp;before tax</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(55,382,660</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,346,874</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(995,293</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in">Income tax income/(expense)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(621</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,495</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in">Loss for the continuing business</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(55,383,281</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,352,369</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(995,293</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in">Discontinued operation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">(18,109,150</P>
</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(29,863,116</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,672,124</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-indent: -0.125in">Loss for the year</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">(73,492,431</P>
</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(37,215,483</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,667,417</TD><TD STYLE="text-align: left">)</TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="22" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">As of December 31,&nbsp;2022</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Wholesale and Retail</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Subcontracting</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Tourism products</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">cross-board<BR> merchandise and technology</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Unallocated</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Consolidated</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 28%; font-weight: bold; text-align: justify">Current assets</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">369,770</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">2,792,929</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">303,874</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">3,466,573</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: justify; padding-bottom: 1.5pt">Non-current assets</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,310</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,788,394</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">10,000,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">12,789,704</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: justify; padding-bottom: 4pt">Total assets</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">371,080</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">5,581,323</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">10,303,874</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">16,256,277</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: justify; padding-bottom: 1.5pt">Current liabilities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">711,992</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">899,130</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,319,263</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,930,385</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: justify; padding-bottom: 4pt">Total liabilities</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">711,992</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">899,130</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,319,263</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">3,930,385</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="22" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">As of December 31,&nbsp;2021</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Wholesale and Retail</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Subcontracting</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Tourism products</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">cross-board<BR> merchandise      </TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Unallocated</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Consolidated</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 28%; font-weight: bold; text-align: justify">Current assets</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">18,640,119</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">2,610,448</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">450,129</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">2,809,431</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">(283,630</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">24,226,497</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: justify; padding-bottom: 1.5pt">Non-current assets</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,410,407</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">8,111,375</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">674</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,345,469</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">13,867,925</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: justify; padding-bottom: 4pt">Total assets</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">21,050,526</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">10,721,823</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">450,803</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">6,154,900</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(283,630</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">38,094,422</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: justify; padding-bottom: 1.5pt">Current liabilities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,384,019</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,481,508</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">303,749</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">424,534</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,628,272</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">7,222,082</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: justify; padding-bottom: 4pt">Total liabilities</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">3,384,019</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,481,508</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">303,749</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">424,534</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,628,272</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">7,222,082</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Geographical information</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The Group&rsquo;s operations are located
in the PRC and all of the Group&rsquo;s revenue is derived from sales to customers in the PRC. Hence, no analysis by geographical area
of operations is provided.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Information about major customers
</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Major distributors that make up 10%
or more of revenue are as below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Year ended December&nbsp;31,</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: justify">Customer A</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">74,340,429</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">41,767,780</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Customer B</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">*</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,439,831</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Customer C</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">*</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">*</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">991,928</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: justify; padding-bottom: 4pt">Total revenue</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">79,874,727</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">54,040,948</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,335,374</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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">The revenue of this customer is not over 10% of total revenue
of the Company.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify"><U>Information about major suppliers</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Major suppliers that make up 10% or
more of purchases are as below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Year ended December&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: justify">Supplier A</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">354,710</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Supplier B</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">483,879</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Supplier C</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,586,155</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Supplier D</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,562,686</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,551,014</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Supplier E</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,496,731</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 4pt">Total purchase</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">78,902,955</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">53,168,205</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,430,207</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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"><FONT STYLE="font-size: 10pt">8.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">REVENUE</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Year ended December&nbsp;31,</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: justify">Travel service</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">79,092,342</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">51,818,166</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">991,929</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Technology</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">782,302</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Cross-board products</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">83</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,222,782</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">343,445</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 4pt">Total</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">79,874,727</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">54,040,948</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,335,374</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Revenues are recognized at a point in
time and denominated only in USD.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>


<!-- Field: Page; Sequence: 148; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->28<!-- Field: /Sequence --></FONT></P></DIV>
    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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"><FONT STYLE="font-size: 10pt">9.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">COST OF REVENUE</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Cost of revenue for our cross-board
business comprise the cost of products purchased and surcharges on purchase cost. Cost of revenue for our travel services comprise the
cost of air-tickets brought from airline or the cost of services provided from local travel firms or persons.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Cost of sales for our retail and wholesale
of garment business comprises of purchasing materials, labor costs for personnel employed in production, depreciation of non-current assets
used for production purpose, outsourced manufacturing cost, taxes and surcharges, and water and electricity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The following table shows a breakdown
of cost of sales of all business for the periods presented for each category:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Year ended December&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2020</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: justify">Changes in inventories of finished goods and work in progress</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">(494,357</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">83,112</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">(261,691</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Materials consumed in production</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#12288;</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Purchases of finished goods</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">201,734</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,808,963</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,430,208</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Outsourced service cost</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">78,701,221</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">51,276,130</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Taxes and surcharges *</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,646</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">25,032</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">291</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">78,410,244</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">53,193,237</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,168,808</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; width: 0px">&nbsp;</TD>
    <TD STYLE="text-align: justify; width: 24px"><FONT STYLE="font-size: 10pt">*</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-size: 10pt">Tax and surcharges are mainly Urban Maintenance and Construction Tax (7% of Valued Added Tax payment amount), Extra Charges of Education Fund (3% of Valued Added Tax payment amount) and Local Surcharge for Education Fund (2% of Valued Added Tax payment amount).</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<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"><FONT STYLE="font-size: 10pt">10.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">OTHER INCOME</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Year ended December&nbsp;31,</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2020</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: justify">Government grant</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">1,592</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Interest income on bank deposits</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">199</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Other</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">15,023</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">34,789</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,923</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">16,636</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">34,793</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">3,122</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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"><FONT STYLE="font-size: 10pt">11.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">OTHER LOSSES</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Year ended December&nbsp;31,</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2020</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: justify">Bad debt provision of trade receivables</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">(53,991</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Impairment of long-lived assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(39,778</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(12,500</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Others</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(4,881</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(4,825</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(98,650</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(17,325</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

<!-- Field: Page; Sequence: 149; Value: 1 -->
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    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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"><FONT STYLE="font-size: 10pt">12.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">DISTRIBUTION AND SELLING EXPENSES</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Year ended December&nbsp;31,</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2020</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: justify">Outsourced service fee</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">403,458</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">1,212,403</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Advertisement</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">140,704</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Others</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">317,930</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">736</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">721,388</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,353,843</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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"><FONT STYLE="font-size: 10pt">13.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">ADMINISTRATIVE EXPENSE</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Year ended December&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: justify">Labor</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">53,550,086</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">3,155,246</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">832,534</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Audit fee</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">247,782</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">200,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">114,400</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Professional and other service fee</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">969,072</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,666,804</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">74,252</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Design fee</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,039</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Depreciation and amortization charges</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">299,547</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,603</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Decoration</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">133,502</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">155,665</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,275</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Rental</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,661</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">65,724</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Travelling and entertainment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">89,272</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">203,634</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,242</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Others</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">749,819</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">389,534</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">89,239</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">56,043,741</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">6,858,210</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,164,981</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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"><FONT STYLE="font-size: 10pt">14.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">FINANCE COSTS</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
  <TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Year ended December&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 64%; text-align: left">Interest expenses on bank borrowings</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right"></TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt; text-align: left">wholly repayable within one year</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">As the bank loans were disposed along with the
discontinued operation in 2022, the interest expenses in connection with the bank loans are reclassified as discontinued operations.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<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"><FONT STYLE="font-size: 10pt">15.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">INCOME TAX (INCOME)/ EXPENSE</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Year ended December&nbsp;31,</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2020</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left">PRC enterprises income tax:</TD><TD STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: justify">Current tax</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">621</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">5,495</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Deferred tax</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">621</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">5,495</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Jin Xuan Luxury Tourism, Flower Crown
China and Heyang Travel are located in PRC and subject to the applicable enterprise income tax rate of 25%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">KBS Fashion Group Limited was incorporated
in the Marshall Island, and, under the current laws of the Marshall Island, is not subject to income taxes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Flower Crown Holding was incorporated
in the Cayman Islands, and, under the current laws of the Cayman Islands, is not subject to income taxes.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The tax charge for the Company can be
divided into non-PRC entities and PRC entities. As for the non-PRC entities, all the entities are expense center and not subject to any
tax and also no deferred tax assets are considered. The loss for the non-PRC for the year ended December 31, 2022 is $4,386,002. PRC entities
are operating entities and may be subject to income tax and deferred tax are considered. In 2022, menswear business was disposed and the
temporary difference and deferred tax were reversed accordingly.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The following is the analysis of the
deferred tax balances for financial reporting purposes:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">2022</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">2021</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">2020</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Temporary difference</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Deferred tax assets</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Temporary difference</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Deferred tax assets</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Temporary difference</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Deferred tax assets</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; width: 28%; text-align: left">Beginning of the year</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">78,622,365</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">63,509,644</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">16,960,839</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">59,616,758</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">14,330,463</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Bad Debt provisions charged to profit or loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,064,120</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,516,030</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,334,410</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">583,603</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Inventory provision charged to profit or loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,283</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">321</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Impairment charged to profit or loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,944,979</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">736,245</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; text-align: left">Tax loss carried forward</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,687,686</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">421,922</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,102,339</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,529,706</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,227,296</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,556,824</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in">Allowance</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(421,922</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(21,245,906</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in">Reverse</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(75,924,049</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in">Effect of translation</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">502,765</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">489,949</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; text-align: left">End of the year</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,386,002</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">78,622,365</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">63,509,644</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,960,839</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  </TABLE>


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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<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"><FONT STYLE="font-size: 10pt">16.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">(LOSS)/PROFIT FOR THE YEAR
(continuing business)</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">Profit for the year has been arrived
at after charging:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Year ended December&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2020</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: justify">Cost of inventories recognized as expenses</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">78,408,598</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">53,168,205</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">1,168,517</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Taxes and surcharges</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,646</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">25,032</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">291</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">78,410,244</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">53,193,237</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,168,808</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Depreciation of property, plant and equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">299,547</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,932</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Amortization of land use rights and trademarks</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Amortization of prepayments and premiums under operating leases</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Provision (Reversal) of inventory obsolescence</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">39,778</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Provision of bad debt allowance</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">53,991</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Provision of impairment loss in property</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">393,316</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">21,932</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 8pt"></FONT></P>

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<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"><FONT STYLE="font-size: 10pt">17.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">DISCONTINUED OPERATIONS</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">On October 19, 2022, the Company
entered into a stock purchase agreement with a Purchaser and closed the transaction pursuant to the terms of the Stock Purchase Agreement,
resulting in the Company&rsquo;s sale of 20,000 shares of common stock (the &ldquo;Shares&rdquo;) in Hongri International Holding Limited
(&ldquo;Hongri&rdquo;), constituting all of the issued and outstanding capital stock in Hongri, in consideration for $10,000,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The subsidiary was sold on October 19,
2022 with effect from November 1, 2022 and is reported in the current period as a discontinued operation. Financial information relating
to the discontinued operation for the period to the date of disposal is set out below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: justify; width: 0.5in"></TD><TD STYLE="text-align: justify; width: 0.25in">a)</TD><TD STYLE="text-align: justify">Financial performance and cash flow information</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Year ended December&nbsp;31,</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2020</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: justify">Revenue</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">1,887,410</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">4,960,693</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">9,540,775</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Cost of revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,183,080</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,228,577</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,208,923</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,486,626</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,353,466</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,533,339</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Other income/expenses - net</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(5,133,118</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(8,778,160</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(2,027,461</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">Profit before tax</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8,915,414</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(12,399,510</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,228,948</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Income tax</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(17,463,604</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,556,824</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Profit after tax</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8,915,414</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(29,863,114</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,672,124</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Net cash from operating activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,733,104</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,872,380</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,901,544</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Net cash from investing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,926</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(8,494</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Net cash from financing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Net cash decrease of disposed subsidiaries</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,733,104</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,874,306</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,910,038</TD><TD STYLE="text-align: left">)</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="text-align: justify; width: 0.5in"></TD><TD STYLE="text-align: justify; width: 0.25in">b)</TD><TD STYLE="text-align: justify">Details of sale of the subsidiary</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 88%; text-align: justify">Fair value of the consideration</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">10,000,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Net asset of the disposed asset</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(15,166,042</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">Loss on sale before reclassification of foreign currency translation reserve</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,166,042</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Reclassification of foreign currency translation reserve</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(4,027,694</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">Loss on disposal of discontinued operations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(9,193,736</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Carrying amount of the investment cost of the
disposed assets:</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 88%; text-align: justify">Cash</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">8,695,890</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Trade receivables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,335,650</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Other current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">97,966</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Investment property-net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,390,022</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Other long-term assets</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,890,967</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Total assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,410,495</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Short-term loan</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,087,154</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Tax payables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,775,363</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Other liabilities</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,381,936</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">Total liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,244,453</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 4pt">Net assets</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">15,166,042</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="background-color: White; text-align: justify; padding-bottom: 4pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="background-color: White; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="background-color: White; text-align: left">&nbsp;</TD><TD STYLE="background-color: White; text-align: right">&nbsp;</TD><TD STYLE="background-color: White; padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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"><FONT STYLE="font-size: 10pt">18.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">DIRECTORS&rsquo; EMOLUMENTS</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 36pt; text-align: justify">The emoluments paid or payable to the
directors of the Company were as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Year ended December&nbsp;31,</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2020</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1.5pt; font-weight: bold; text-align: justify"><U>Salaries</U></TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: justify">Yan Keyan</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">597,669</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">306,466</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Sun Lei</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,470,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">772,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Li Huidan</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">228,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">772,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Mu Ruifeng</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">228,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Jin Yan</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">228,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Lixia Tu</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">237,880</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">John Sano</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,350</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Themis Kalapotharakos</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">82,800</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Matthew Los</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">82,800</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Zhongmin Zhang</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,350</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Yuet Mei Chan</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">10,350</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,154,000</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,141,669</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">740,996</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-decoration: underline; font-weight: bold; text-align: justify">Social Welfare</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">Yan Keyan</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,242</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">432</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,242</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">432</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

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


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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"><FONT STYLE="font-size: 10pt">19.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">LOSS PER SHARE</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">For the years ended December&nbsp;31,</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2022</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2021</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">2020</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: justify">Basic Loss Per Share Numerator</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: justify; padding-bottom: 4pt">Profit for the year attributable to owners of the Company</TD><TD STYLE="width: 1%; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; width: 1%; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; width: 9%; text-align: right">(73,492,431</TD><TD STYLE="width: 1%; padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="width: 1%; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; width: 1%; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; width: 9%; text-align: right">(37,215,483</TD><TD STYLE="width: 1%; padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="width: 1%; padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; width: 1%; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; width: 9%; text-align: right">(5,667,417</TD><TD STYLE="width: 1%; padding-bottom: 4pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: justify">Diluted Loss Per Share Numerator</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 4pt">Profit for the year attributable to owners of the Company</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(73,492,431</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(37,215,483</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(5,667,417</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: justify">Basic Loss Per Share Denominator</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Original shares:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,899,893</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,408,646</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,591,299</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-style: italic; text-align: justify">Additions from actual events:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 1.5pt">- Issuance of common stock, weighted</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">10,915,573</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,115,699</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">121,229</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 4pt">Basic weighted average shares outstanding</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">16,815,466</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">4,524,345</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,712,528</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: justify">Diluted Loss Per Share Denominator</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Basic weighted average shares outstanding</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,815,466</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,524,345</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,712,528</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-style: italic; text-align: justify">Dilutive shares: Potential additions from dilutive events:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">- Exercise of investor warrants*</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 4pt">Diluted Weighted Average Shares Outstanding:</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">16,815,466</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">4,524,345</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,712,528</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: justify">Loss Per Share**</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">- Basic</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(43.7</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(82.3</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(20.9</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">- Diluted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(43.7</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(82.3</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(20.9</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: justify">Weighted Average Shares Outstanding**</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">- Basic</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,681,547</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">452,345</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">271,253</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">- Diluted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,681,547</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">452,345</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">271,253</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  </TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; width: 0px"></TD>
    <TD STYLE="text-align: justify; width: 24px"><FONT STYLE="font-size: 10pt"><I>*</I></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><I>There were no potential dilutive additions to diluted weighted shares outstanding as a result of the loss during the periods presented.</I></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>**</I></FONT></TD>
    <TD STYLE="text-align: justify; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>The Company took a 1:10 reverse stock split on April 26, 2023, as a result, the basic and diluted shares and per share number for all years presented here are adjusted retrospectively. </I></FONT></TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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"><FONT STYLE="font-size: 10pt">20.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">PROPERTY, PLANT AND EQUIPMENT</FONT></TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Owner-occupied Property</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<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; padding-left: 0.125in; text-indent: -0.125in; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Plant</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Machinery</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Office <BR> equipment</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Motor <BR> vehicles</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Furniture <BR> and <BR> fixtures</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Leasehold <BR> improvements-<BR> factories and <BR> offices</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Leasehold <BR> improvements-<BR> shops</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center; font-weight: bold">&nbsp;</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; text-align: center; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; font-weight: bold; text-align: justify">COST</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; width: 20%; text-align: justify">At December 31, 2020</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">7,191,993</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">45,324</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">137,150</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">33,800</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">160,979</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">896,680</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">269,029</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">8,734,955</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; text-align: justify">Additions</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,311,212</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,332</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">999,829</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,526</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,324,899</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; text-align: justify">Disposals</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(45,876</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(20,638</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(34,211</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,591</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(907,602</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(272,306</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,282,224</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; text-align: justify">Reclassification to investment property</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,487,395</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,487,395</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-indent: -0.125in; text-align: justify">Translation adjustment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">150,063</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">552</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,642</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,632</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,455</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,922</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,277</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">188,543</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; text-align: justify; padding-bottom: 1.5pt">At December 31, 2021</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">4,165,873</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">131,486</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,015,050</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">166,369</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">5,478,778</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; text-align: justify">Additions</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,008</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,008</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; text-align: justify">Disposals</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,716,185</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(118,285</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(156,406</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,990,876</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; text-align: justify">Translation adjustment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(289,116</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,601</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(80,387</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(9,481</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(386,585</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-indent: -0.125in; text-align: justify; padding-bottom: 1.5pt">At December 31, 2022</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,160,573</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">5,600</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">934,663</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,489</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,102,326</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>

<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; font-weight: bold; text-align: justify">DEPRECIATION&nbsp;AND IMPAIRMENT</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; width: 20%; text-align: justify">At December 31, 2020</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">(4,459,340</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">(45,324</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">(135,065</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">(30,609</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">(159,973</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">(798,006</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">(269,029</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">(5,897,346</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; text-align: justify">Provided for the year</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(186,439</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(773</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(20,856</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(57</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(9,118</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(217,243</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-indent: -0.125in; text-align: justify">Eliminated&nbsp;upon&nbsp;disposal of assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">45,876</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,171</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,982</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,263</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">816,842</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">272,305</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,185,439</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; text-align: justify">Depreciation&nbsp;reclassified to investment property</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,602,628</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,602,628</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; text-align: justify">Impairment&nbsp;reclassified&nbsp;to investment property</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,792,237</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,792,237</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; text-align: justify">Impairment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(48,859</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(48,859</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-indent: -0.125in; text-align: justify; padding-bottom: 1.5pt">Translation adjustment</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(74,928</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(552</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(3,462</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(691</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(4,395</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(9,718</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(3,276</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(97,022</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; text-align: justify; padding-bottom: 1.5pt">At December 31, 2021</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,374,701</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(121,129</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(21,174</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(163,162</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,680,166</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="padding-left: 0.125in; text-indent: -0.125in; text-align: justify">Provided for the year</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(70,084</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,817</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(227,388</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(258</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(299,547</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; text-align: justify">Disposal of subsidiaries</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,296,658</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">113,591</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">153,845</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,564,095</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; text-align: justify; padding-bottom: 1.5pt">Translation adjustment</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">79,710</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">6,935</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">7,083</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">9,270</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">102,998</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; text-align: justify; padding-bottom: 1.5pt">At December 31, 2022</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(68,418</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">))</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(2,419</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(241,479</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(304</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(312,622</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="padding-left: 0.125in; text-indent: -0.125in; text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; font-weight: bold; text-align: justify">CARRYING AMOUNT</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; text-align: justify; padding-bottom: 4pt">At December 31, 2021</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,791,172</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">10,357</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">993,876</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">3,207</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">3,798,612</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-indent: -0.125in; text-align: justify; padding-bottom: 4pt">At December 31, 2022</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,092,155</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">3,181</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">693,184</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,185</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,789,704</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B></B></P>

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



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Depreciation is provided on straight-line
basis for all property, plant and equipment over their estimated useful lives of the assets as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Useful life</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Residual Value</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; width: 45%">Plant</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 43%; text-align: center">30 years</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 10%; text-align: center">5%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in">Machinery</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">5 years</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">10%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Office equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">3 years</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">5%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Motor vehicles</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">4 years</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">5%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Furniture and fixtures</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">3 years</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">5%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Leasehold improvements-factories and offices</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Shorter of estimated useful life of 5 years or lease term</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">10%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Leasehold improvements-shops</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Shorter of estimated useful life of 5 years or lease term</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Nil</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; text-align: left">Distributor shops&rsquo; furniture and fixtures</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1.5 years</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Nil</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Plant and building include buildings
owned by the Company are set out below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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; white-space: nowrap; font-weight: bold">Location</TD><TD STYLE="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; white-space: nowrap; font-weight: bold; text-align: center">Description</TD><TD STYLE="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; white-space: nowrap; font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>Gross
    area (m<SUP>2</SUP>)</B></FONT></TD><TD STYLE="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Jinxi Town, Longshan Road, Taihu City, Anhui Province, the PRC</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: left"><FONT STYLE="font-size: 10pt">Dormitory</FONT></TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">8,573</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Jinxi Town, Longshan Road, Taihu City, Anhui Province, the PRC</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Factory</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,292</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">8-101 Bojingwan Beiyuan, Hexi District, Tianjing, the PRC</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt">Office</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">242</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The first two buildings were disposed
along with the menswear business in 2022.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Investment Properties</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">As at December 31, 2021, fair value
approximated carry amounts, being the initial cost to acquire these investment properties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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">COST</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 88%; text-align: left">Opening balance at 1 January</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">24,118,655</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Acquisitions</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Capitalized subsequent expenditure</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Classified as held for sale or disposals</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Transfer (to)/from inventories and owner-occupied property</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,487,395</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Translation adjustment</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">748,918</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Closing balance at 31 December</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">30,354,968</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<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">DEPRECIATION AND IMPAIRMENT</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 88%; text-align: left">Opening balance at 1 January</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">(15,844,460</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Provided for the year</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(540,273</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Eliminated upon disposal of assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Impairment for the year</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,673,131</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Transfer to/(from) inventories and owner-occupied property</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,394,864</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Translation adjustment</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(537,712</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">Closing balance at 31 December</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">(22,990,440</TD><TD STYLE="padding-bottom: 4pt; text-align: left">)</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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

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    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->35<!-- Field: /Sequence --></FONT></P></DIV>
    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<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">CARRYING AMOUNT</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 88%; text-align: left">Closing balance at 31 December</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">7,364,527</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">21.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">PREPAYMENTS AND PREMIUMS UNDER OPERATING LEASES</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <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">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 88%">At January 1, 2021</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">2,419,900</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left">additions for the year</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,411</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left">charge for the year</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(81,474</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">translation adjustment</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">65,572</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt">At December 31, 2021</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,407,409</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left">additions for the year</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left">charge for the year</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; padding-bottom: 1.5pt">disposed</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,407,409</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt">At December 31, 2022</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Analyzed for reporting purposes as:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">As at December&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Current asset</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">82,714</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Non-current asset</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,324,695</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,407,409</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">22.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">LONG TERM RECEIVABLE</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On October 19, 2022, the Company entered
into a stock purchase agreement with a Purchaser and closed the transaction pursuant to the terms of the Stock Purchase Agreement, resulting
in the Company&rsquo;s sale of 20,000 shares of common stock (the &ldquo;Shares&rdquo;) in Hongri International Holding Limited (&ldquo;Hongri&rdquo;),
constituting all of the issued and outstanding capital stock in Hongri, in consideration for $10,000,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Purchaser issued to the Company
a 5% promissory note in the principal amount of $10,000,000, in payment of the Purchase Price (the &ldquo;Note&rdquo;). The Note is payable
in four installments, on the following dates and in the following amounts: (a) $1,000,000, together with an accrued interest, is payable
on or before November 19, 2022; (b) $2,000,000, together with an accrued interest, is payable on or before April 19, 2023; (c) $3,000,000,
together with an accrued interest, is payable on or before April 19, 2024, and (d) the remaining $4,000,000, together with an accrued
interest, is payable on or before October 19, 2024. As the 5% interest rate is very close to the market rate, the management assessed
the fair value of the note receivable is $10 million as of December 31, 2022.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Analyzed for reporting purposes as:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>As at December&nbsp;31,</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>2022</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: black 1.5pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>2021</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="width: 76%; padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt">Current portion</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">3,000,000</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-bottom: 1.5pt; padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt">Non-current portion</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">7,000,000</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: #CCEEFF">
    <TD STYLE="padding-bottom: 4pt; padding-left: 9pt; text-indent: -9pt"><FONT STYLE="font-size: 10pt">&nbsp;Total receivable</FONT></TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 4.5pt double">&nbsp;</TD>
    <TD STYLE="border-bottom: black 4.5pt double; text-align: right"><FONT STYLE="font-size: 10pt">10,000,000</FONT></TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: black 4.5pt double">&nbsp;</TD>
    <TD STYLE="border-bottom: black 4.5pt double; text-align: right"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">As of April 24, 2023, the first two
instalments of the principal amount $3,000,000 have been collected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">23.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">PREPAYMENT FOR ACQUISITION OF LAND USE RIGHT</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On September 2, 2010, Hongri Fujian
entered into an agreement with a third party, Taihu Weiqi Sports Apparel Co., Ltd., to acquire a land use right in relation to the development
of factories in Anhui Kaixin for a total consideration of $6,340,456. As of December 31, 2015, the transaction has not been completed
yet due to disputes between the original owner of the land and the government regarding the compensation for vacating the premises. In
relation to this dispute, the Company expected that the project would be delayed or, in the worst case, be terminated. Accordingly, the
Company provided a provision of impairment loss against the carrying value for such prepayment. The detail estimation of such provision
is explained in note 6.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The assets were disposed along with
the menswear business in 2022, no more assets as of December 31, 2022.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">24.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">LAND USE RIGHTS</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <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">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold"><U>COST</U></TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 88%">At January 1, 2021</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">734,990</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left">additions for the year</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</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">translation adjustment</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">20,277</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt">At December 31, 2021</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">755,267</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left">additions for the year</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Disposed due to discontinued operation</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(755,267</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="padding-bottom: 4pt">At December 31, 2022</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-decoration: underline; font-weight: bold">AMORTIZATION</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD>At January 1, 2021</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(130,020</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">charge for the year</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(14,958</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in">impairment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(222,989</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">translation adjustment</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(7,209</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt">At December 31, 2021</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(375,176</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="padding-left: 0.125in; text-align: left">charge for the year</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; text-align: left; padding-bottom: 1.5pt">Disposed due to discontinued operation</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">375,176</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt">At December 31, 2022</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-decoration: underline; font-weight: bold; text-align: left">CARRYING AMOUNTS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt">At December 31, 2021</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">380,091</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt">At December 31, 2022</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The amounts represent the prepayment
of rentals for land use right (industrial use) situated in the PRC. The land use rights have the term of 50 years.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">25.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">INVENTORIES</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">As at December&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Raw materials</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">773,180</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Merchandised goods</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">483,384</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">392,018</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Provision for obsolete inventories</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(38,833</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(1,302</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">444,551</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,163,896</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">26.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">TRADE RECEIVABLES, OTHER RECEIVABLES AND PREPAYMENTS</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">As at December&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Trade receivables</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">37,487</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">18,952,763</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Bad debt provision for trade receivables</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(37,487</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">(11,215,912</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="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">7,736,851</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">As at December&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Other receivables</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">318,643</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">344,437</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Long-term receivable to be collected within 1 year</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt">Prepayments</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,182,463</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,983,685</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">5,501,106</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,328,122</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The fair value of trade and other receivables
have not been disclosed as, due to their short duration, management considers the carrying amounts recognized in the consolidated statements
of financial position to be reasonable approximation of their fair values.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Prepayments include advances to suppliers,
prepaid expenses and prepaid income tax.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->37<!-- Field: /Sequence --></FONT></P></DIV>
    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Before accepting any new customer, the
Group assesses the potential customer&rsquo;s credit quality and defined credit limits by customer. Limits attributed to customers are
reviewed once a year. The aging analysis of trade receivables is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">As at December&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%">Current</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">2,629,433</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Past due for less than 4 months</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,411,252</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Past due for more than 4 months</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">37,487</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">14,912,078</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">37,487</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">18,952,763</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The provision for doubtful debts is
recorded using a provision account unless the Group is satisfied that recovery is remote, in which case the unrecovered loss is written
off against trade receivables and the provision for doubtful debts directly. The Group does not hold any collateral over these balances.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The movement in the provision for doubtful
debts during the year is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%">As at January 1</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">11,215,912</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">4,923,646</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Provision provided in the year</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">37,487</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,076,620</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Reverse due to disposal of subsidiaries</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(11,215,912</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Translation adjustment</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">215,646</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 4pt">As at December 31</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">37,487</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">11,215,912</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">27.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">CASH AND CASH EQUIVALENTS</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">&#8239;As at December&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Cash on hand</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">9,470</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Bank deposits</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">243,530</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,905,444</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Other monetary funds</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">277,386</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">520,916</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">12,914,914</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<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; text-align: center"></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">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">As at December&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%">Renminbi</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">520,883</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">12,914,834</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Hong Kong Dollars</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">80</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">United States Dollars</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">520,916</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">12,914,914</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Cash and cash equivalents comprise cash
held by the Group and short-term deposits with an original maturity of three months or less. Bank deposits as at December 31, 2022 carry
interest at market rates which ranged from 0.30% to 0.40% (2020: 0.30%-0.40%) per annum. Majority of our cash is deposited with financial
institution in the PRC. Remittance of funds out of the PRC is subject to the exchange restrictions imposed by the PRC government.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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

<!-- Field: Page; Sequence: 158; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1.5pt solid"><P STYLE="text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-<!-- Field: Sequence; Type: Arabic; Name: PageNo -->38<!-- Field: /Sequence --></FONT></P></DIV>
    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">28.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">TRADE AND OTHER PAYABLES</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">As at December&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Trade payables</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">670,965</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">297,033</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Employee benefits payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,925</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">148,232</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Accrual and other payables</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">632,186</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">1,811,262</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Subtotal financial liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,319,076</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,256,527</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Other taxes payable</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">3,098,596</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,319,076</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">5,355,123</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The fair value of trade and other payables
have not been disclosed as, due to their short duration, management considers the carrying amounts recognized in the consolidated statements
of financial position to be reasonable approximation of their fair values.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Trade payables comprise amounts outstanding
for trade purchase. The average credit period is 30 days from the time when the services are rendered by or goods received from suppliers.
The aging analysis of trade payables is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">As at December&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%">Current</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">294,938</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Past due for less than 4 months</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">431,202</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,046</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Past due for over 4 months</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">239,763</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">49</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">670,965</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">297,033</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company was granted a credit term
of 30 days. The balances past due were mainly for the Company&rsquo;s high bargaining power.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">29.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">RELATED PARTIES PAYABLE</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">(1)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Nature of relationship with related parties</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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: 35%"><FONT STYLE="font-size: 10pt"><B>Name</B></FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; width: 64%"><FONT STYLE="font-size: 10pt"><B>Relationship with the Group</B></FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">Yan, Keyan</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">EX-chairman of the Board of Directors and interim Chief Financial Officer</FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">Sun, Lei</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Chief Executive Officer and Co-chairman of the Board of Directors</FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">Li Huidan</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Co-Chairman of the Board of Directors</FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 10pt">Mu Ruifeng</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Director</FONT></TD></TR>
  <TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-size: 10pt">Jin Yan</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Director</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">(2)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Significant balances between the Group and the above related parties:</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">As at December&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1.5pt solid; font-weight: bold">Name</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Nature</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 55%; text-align: left">Yan, Keyan</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; text-align: center"><FONT STYLE="font-size: 10pt">Borrowing of funds</FONT></TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">36,697</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Li, Huidan</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,122,697</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Sun, Lei</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt">Borrowing of funds</FONT></TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">488,400</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">430,871</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">2,611,097</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">467,568</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Related parties payables were unsecured,
non-interest bearing and repayment on demand.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(3) Significant related parties transactions
between the Group and the above related parties:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">During 2022, the Company issued 1,000,000
shares to Sun Lei for her compensation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">During 2022, the Company issued 300,000
shares to 3 Directors for their compensation as below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<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; white-space: nowrap; font-weight: bold">Name</TD><TD STYLE="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; white-space: nowrap; font-weight: bold; text-align: center">Shares issued</TD><TD STYLE="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; white-space: nowrap; font-weight: bold; text-align: center">Value</TD><TD STYLE="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Mu Ruifeng</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">100,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">228,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Jin Yan</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">228,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">&nbsp;Li Huidan</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">100,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">228,000</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">300,000</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">684,000</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">30.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">SHORT-TERM BANK LOANS</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">As at December&nbsp;31,</TD><TD STYLE="padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1.5pt">&nbsp;</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">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left; padding-bottom: 1.5pt">Secured bank borrowings</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 1%; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 1%; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; width: 9%; text-align: right">1,180,656</TD><TD STYLE="width: 1%; padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4pt">Carrying amount repayable within 1 year</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">1,180,656</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 24px">&nbsp;</TD>
    <TD STYLE="width: 24px"><FONT STYLE="font-size: 10pt">31.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">RIGHTS &nbsp;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On March 12, 2021, the Company announced
the authorization and declaration of a dividend distribution of one right for each outstanding share of common stock, par value $0.0001
per share, of the Company to stockholders of record as of the close of business on March 31, 2021. Each Right will entitle the holder
to purchase, for the Exercise Price of $50, 0.00667 of a share of Preferred Stock having economic and other terms similar to that of one
share of Common Stock. This portion of a share of Preferred Stock is intended to give the stockholder approximately the same dividend,
voting and liquidation rights as would one share of Common Stock, and should approximate the value of one share of Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">If an Acquiring Person obtains beneficial
ownership of 15 percent or more of the Common Stock, then each Right will entitle the holder thereof to purchase, for the Exercise Price,
a number of shares of Common Stock (or, in certain circumstances, cash, property or other securities of the Company) having a then-current
market value of twice the Exercise Price. All Rights that are or, under certain circumstances specified in the Rights Agreement, were
beneficially owned by an Acquiring Person or certain of its transferees will be void.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">In general, if anyone acquires 15% or
more of the common stock of the Company, the Rights will give rights holders, other than the Acquiring Person, to buy common stock at
lower price to significantly dilute the Acquiring Person. The Board adopted the Rights Agreement to protect stockholders from coercive
or otherwise unfair takeover tactics. In general terms, it works by imposing a significant penalty upon any person or group that acquires
15 percent or more of the shares of Common Stock without the approval of the Board. As a result, the overall effect of the Rights Agreement
and the issuance of the Rights may be to render more difficult or discourage a merger, tender or exchange offer or other business combination
involving the Company that is not approved by the Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">As of December 31, 2022, there are 4,233,272
rights issued and outstanding. The number of the rights since issued has not been changed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company classified the Rights as
permanent equity in the consolidated balance sheets because they are convertible to preferred B share which are further convertible to
common stock of the Company. The Preferred Shares are recorded initially at fair value, net of issuance costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The fair value of the rights was determined
using a Black-Scholes model. This model requires the input of highly subjective assumptions, including price volatility of the underlying
stock. Changes in the subjective input assumptions can materially affect the estimate of fair value of the rights and the Company&rsquo;s
results of operations could be impacted. This model is dependent upon several variables such as the instrument&rsquo;s expected term,
expected strike price, expected risk-free interest rate over the expected instrument term, the expected dividend yield rate over the expected
instrument term, and the expected volatility of the Company&rsquo;s stock price over the expected term. The expected term represents the
period of time that the instruments granted are expected to be outstanding. The expected strike price is based upon a weighted average
probability analysis of the strike price changes expected during the term as a result of the down round protection. The risk-free rates
are based on U.S. Treasury securities with similar maturities as the expected terms of the options at the date of valuation. Expected
dividend yield is based on historical trends. The Company measures volatility using the volatility rates of market index.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The inputs to the model were as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<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="white-space: nowrap; text-align: center">&nbsp;</TD><TD STYLE="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; white-space: nowrap; font-weight: bold; text-align: center">December&nbsp;31,<BR> 2021</TD><TD STYLE="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 88%">Exercise price</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">50</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Dividend yield</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Risk-free rate</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.54</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Expected term (in years)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Expected volatility</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">79.68</TD><TD STYLE="text-align: left">%</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">32.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">SHARE CAPITAL AND SHARE PREMIUM</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The details of the Group&rsquo;s share
capital are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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="white-space: nowrap; text-align: center">&nbsp;</TD><TD STYLE="white-space: nowrap; text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; white-space: nowrap; font-weight: bold; text-align: center">Number of<BR> shares</TD><TD STYLE="white-space: nowrap; text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="white-space: nowrap; text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; white-space: nowrap; font-weight: bold; text-align: center">Share<BR> capital</TD><TD STYLE="white-space: nowrap; text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="white-space: nowrap; text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center; font-weight: bold">Share<BR> premium</TD><TD STYLE="white-space: nowrap; text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-indent: -9pt; padding-left: 9pt">Shares outstanding as December 31, 2020</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">3,408,646</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">341</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">11,312,643</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -9pt; padding-left: 9pt">Issuance of shares</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,491,247</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">249</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,257,155</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Issuance of rights</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">7,149,995</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Shares outstanding as December 31, 2021</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">5,899,893</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">590</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">24,719,793</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1.5pt; text-indent: -9pt; padding-left: 9pt">Issuance of shares</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">54,733,443</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">5,473</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">53,239,760</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -9pt; padding-left: 9pt">Shares outstanding as December 31, 2022</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,633,336</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,063</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">72,959,554</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  </TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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="white-space: nowrap; text-indent: -0.125in; padding-left: 0.125in; text-align: center">&nbsp;</TD><TD STYLE="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; white-space: nowrap; font-weight: bold; text-align: center">Number of<BR> shares</TD><TD STYLE="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; white-space: nowrap; font-weight: bold; text-align: center">Share<BR> capital</TD><TD STYLE="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; white-space: nowrap; font-weight: bold; text-align: center">Share<BR> premium</TD><TD STYLE="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in; width: 64%">Authorized Common shares of US$0.0001 as at December 31, 2022</TD><TD STYLE="text-indent: -0.125in; padding-left: 0.125in; width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">150,000,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">15,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in">Issue and fully paid common shares of US$0.0001 as at December 31, 2020</TD><TD STYLE="text-indent: -0.125in; padding-left: 0.125in">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,408,646</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">341</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">11,312,643</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in">Issue and fully paid common shares of US$0.0001 as at December 31, 2021</TD><TD STYLE="text-indent: -0.125in; padding-left: 0.125in">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,899,893</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">590</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">24,719,794</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.125in; padding-left: 0.125in">Issue and fully paid common shares of US$0.0001 as at December 31, 2022</TD><TD STYLE="text-indent: -0.125in; padding-left: 0.125in">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,633,336</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,063</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">72,959,554</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><U>Preferred Stock</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company is authorized to issue 5,000,000
preferred shares with a par value of $0.0001 per share with such designation, rights and preferences as may be determined by the Company&rsquo;s
board of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On April 8, 2021, the Company issued
1,500,000 shares of our newly-designated Series A Convertible Preferred Stock to a single investor for total subscription proceeds of
$1,500,000. Each Series A Convertible Preferred Stock features a stated value of $1.00 and is convertible to 1 share of our common stock
at any time after 6 months from the date of issue. All shares of common stock issuable upon conversion of the Series A Preferred Stock
are subject to a two-year lock-up agreement running from the initial closing of the financing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On September 1, 2021, the Company issued
150,000 shares of our newly-designated Series C Convertible Preferred Stock to Sun Lei, our Chief Executive Officer for total subscription
proceeds of $1,500,000 of a private offering. A Series C Convertible Preferred Stock features a stated value of $10.00 and is convertible
to shares of our common stock on a 1 do 5 basis at any time after 6 months from the date of issue. Series C Convertible Preferred Stock
votes together without common stock on an as-if-converted basis, which is not exercisable for one year, has no special dividend rights,
and ranks equally to our common stock with respect to rights upon liquidation. All shares of common stock issuable upon conversion of
the Series C Preferred Stock are subject to a one-year lock-up agreement running from the initial closing of the financing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On November 1, 2021, the &ldquo;Company
closed the private placement offering (the &ldquo;Offering&rdquo;) of its newly-designated Series D Convertible Preferred Stock, par value
$0.0001 per share (&ldquo;Series D Convertible Preferred Stock&rdquo;), in which the Company issued 100,000 shares of Series D Convertible
Preferred Stock (the &ldquo;Shares&rdquo;) for the total gross proceeds of $3,900,000. As stated in the Certificate of Designation, shares
of Series D Convertible Preferred Stock vote together with holders of shares of common stock, par value $0.0001 per share (the &ldquo;Common
Stock&rdquo;) of the Company on an as-if-converted basis; have no special dividend right, ranks equal to the Common Stock with respect
to rights upon liquidation and are convertible into shares of Common Stock on a 1 do 13 basis at any time following the issuance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Holders of Series A, C and D Convertible
Preferred Stock converted certain preferred stock to common stock during 2021. Following table shows the changes of the preferred stock
during 2021:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<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">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Preferred A</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Preferred C</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Preferred D</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">shares</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Amount $</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Shares</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: center">Amount $</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Shares</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; text-align: center; font-weight: bold">Amount $</TD><TD STYLE="text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>At December 31, 2020</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.125in; width: 28%; text-align: left">New issued during the year</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">1,500,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">1,500,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">150,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">1,500,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">100,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">3,900,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 0.125in; text-align: left">Converted to common stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(260,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(260,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(20,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(780,000</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD>At December 31, 2021</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,240,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,240,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">150,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,500,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">80,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,120,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Changes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD>At December 31, 2022</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,240,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,240,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">150,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,500,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">80,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,120,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  </TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company classified all Preferred
Shares as permanent equity in the consolidated balance sheets because they are not redeemable and convertible to common stock of the Company.
The Preferred Shares are recorded initially at fair value, net of issuance costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><U>Common Stock</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company is authorized to issue 150,000,000
shares of common stock with a par value of $0.0001 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On February 12, 2021, the Company granted
an aggregate of 674,626 shares of common stock to Mr. Yan Keyan, Co-Chairman of the Board to repurchase his loan to the Company with value
of $809,551<FONT STYLE="font-family: Times New Roman, Times, Serif">.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On March 4, 2021, the Company issued
150,000 shares to employee for service to the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On June 4, 2021, the Company issued
16,621 shares for a legal service to the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On September 7, 2021, the Company issued
650,000 registered shares of common stock pursuant to Equity Incentive Plan to the executive officers, directors and certain employees
as compensations for their services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On October 1, 2021, the Company issued
360,000 shares to employees for their services to the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On December 8, 2021, the Company issued
120,000 shares to employees for their compensation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On October 19, 2021 and November 15,
2021, the Company issued 260,000 shares each for Preferred A shares and Preferred D shares conversion, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">During 2021, all common shares were issued
to employees, Directors and executives for their compensations and there is no vesting period. The fair value was determined based on
the market price on the date of grant. All compensations are recorded as general and administrative expenses with a corresponding increase
in equity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On April 19 and 21, 2022, the Company
issued 520,000 shares each to employees for their services to the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On May 6, 2022, the Company issued 200,000
shares to an employee for his compensation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On May 6, 2022, the Company issued 500,000
shares to three board members in leu of their compensation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On May 16, 2022, the Company issued
3,400,000 shares to employees for their compensation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">On May 26, 2022, the Company issued
1,000,000 shares to Sun Lei for her compensation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">From June to September 2022, the Company
issued 8,800,000 shares to employees and cancelled 6,519 shares for their compensation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">From November to December 2022, the
Company issued 39,999,962 shares to employees for their compensation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">During
2022, all common shares were issued to employees, Directors and executives for their compensations and there is no vesting period. The
fair value was determined based on the market price on the date of grant. All compensations are recorded as general and administrative
expenses with a corresponding increase in equity.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">33.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">RESERVE</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><U>Statutory surplus reserve</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">As stipulated by the relevant laws and
regulations applicable to China&rsquo;s foreign investment enterprises, the Company&rsquo;s PRC subsidiaries are required to maintain
a statutory surplus reserve which is non-distributable. Appropriations to such reserve are made out of net profit after tax of the statutory
financial statements of the PRC subsidiaries at the amounts determined by their respective boards of directors annually up to 50% of authorized
capital, but must not be less than 10% of the net profit after tax.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The statutory surplus reserve can be
used for making up losses of the group entities in Mainland China, if any. The statutory surplus reserve may also be used to increase
capital or to meet unexpected or future losses. The statutory surplus reserve is non-distributable other than upon liquidation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The statutory surplus reserve of the
Group amounts to nil and $6,084,836 at December 31, 2022 and 2021, respectively. The statutory surplus reserve of the Group as at December
31, 2021 is related to Hongri Fujian and Anhui Kaixin, which were both disposed in 2022.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"></P>

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    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><U>Revaluation reserve</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Revaluation reserve as of December 31,
2022 and 2021 are nil and $184,272, respectively. The balance as of December 31, 2021 is comprised of the surplus or deficit arising from
the revaluation of the Company&rsquo;s fixed assets of Hongri Fujian and Anhui Kaixin, which were both disposed in 2022.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><U>Retained profits/ (accumulated deficits)</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The retained profits/(accumulated deficits)
comprise the cumulative net gains and losses recognized in the Company&rsquo;s income statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><U>Foreign currency translation reserve
(other comprehensive income)</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Foreign currency translation reserve
represents the foreign currency translation difference arising from the translation of the financial statements of companies within the
Group from their functional currency to the Group&rsquo;s presentation currency.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">34.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">RISK MANAGEMENT AND FAIR VALUES</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">1.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Capital risk</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">The Group manages its capital to ensure
that entities in the Group will be able to continue as a going concern while maximizing the return to owners through the optimization
of the debt and equity balance. The Group&rsquo;s overall strategy remains unchanged during the year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">The capital structure of the Group
consisted of borrowings net of bank balances and cash, and equity attributable to owners of the Company comprising issued share capital
and various reserves.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">The directors of the Company review
the capital structure regularly. As part of this review, the Group considers the cost of capital and the risks associated with each class
of capital, and will balance its overall capital through the payment of dividends, new share issues as well as the issue of new debt or
the redemption of existing debt.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">The Group monitors capital using the
Gearing Ratio, which is net debt divided by total equity. Net debt represents borrowings less cash and cash equivalents. The Company met
its objective by minoring borrowing activities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">The Company and its subsidiaries are
not subject to externally imposed capital requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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="white-space: nowrap; text-align: center">&nbsp;</TD><TD STYLE="white-space: nowrap; text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center; font-weight: bold">December&nbsp;31,<BR> 2022</TD><TD STYLE="white-space: nowrap; text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="white-space: nowrap; text-align: center; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; white-space: nowrap; text-align: center; font-weight: bold">December&nbsp;31,<BR> 2021</TD><TD STYLE="white-space: nowrap; text-align: center; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Total borrowing</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">1,180,656</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Less: cash and cash equivalents</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(520,916</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(12,914,914</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Net debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(520,916</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(11,734,258</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Total equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,325,892</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,872,341</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Total capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,804,976</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,138,083</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Gearing ratio</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1</TD><TD STYLE="text-align: left">)%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(38</TD><TD STYLE="text-align: left">)%</TD></TR>
  </TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">2.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Financial risk</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">Financial risk management objectives
and policies</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">The Group&rsquo;s major financial instruments
include trade and other receivables, related parties receivables, cash and cash equivalents, trade and other payables, related parties
payables and short-term loans. Details of these financial instruments are disclosed in the respective notes. The risks associated with
these financial instruments include credit risk, market risk (interest rate risk and currency risk) and liquidity risk. The policies on
how to mitigate these risks are set out below. The management manages and monitors these exposures to ensure appropriate measures are
implemented on a timely and effective manner.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">3.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Market risk</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">(i)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Foreign currency risk</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">While our reporting currency is the U.S.
dollar, substantially all of our consolidated revenues and consolidated costs and expenses are denominated in RMB. Substantially all 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 the 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. Assets and liabilities
are translated at exchange rates at the balance sheet dates and revenue and expenses are translated at the average exchange rates and
equity is translated at historical exchange rates. Any resulting translation adjustments are not included in determining net income but
are included in determining other comprehensive income, a component of equity. As of December 31, 2022, our accumulated other comprehensive
loss was $(0.06) million. We have not entered into any hedging transactions in an effort to reduce our exposure to foreign exchange risk.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">(ii)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Interest rate risk</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">We deposit surplus funds with Chinese
banks earning daily interest. We do not invest in any instruments for trading purposes. Most of our outstanding debt instruments carry
fixed rates of interest. Our operations generally are not directly sensitive to fluctuations in interest rates and we currently do not
have any long-term debt outstanding. Management monitors the banks&rsquo; prime rates in conjunction with our cash requirements to determine
the appropriate level of debt balances relative to other sources of funds. We have not entered into any hedging transactions in an effort
to reduce our exposure to interest rate risk.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">4.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Credit risk</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">As at December 31, 2022, the Group&rsquo;s
maximum exposure to credit risk which will cause a financial loss to the Group due to failure to perform an obligation by the counterparties
is arising from the carrying amount of the respective recognized financial assets as stated in the consolidated statement of financial
position.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">In order to minimize the credit risk,
the management of the Group has delegated a team responsible for determination of credit limits, credit approvals and other monitoring
procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of
each individual trade debt at the end of each reporting period to ensure that adequate impairment losses are made for irrecoverable amounts.
In this regard, the directors of the Group consider that the Group&rsquo;s credit risk is significantly reduced.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">The Group&rsquo;s exposure to credit
risk on receivables in influenced mainly by the individual characteristics of each customer therefore concentrations of credit risk primarily
arise when the Group has significant exposure to individual customers. In order to minimize the credit risk, management continuously monitors
the level of exposure to ensure that follow-up actions and/or corrective actions are taken promptly to lower the risk exposure or to recover
overdue balances.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">5.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Liquidity risk</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">In the management of the liquidity
risk, the Group monitors and maintains a level of cash and bank balances deemed adequate by the management to finance the Group&rsquo;s
operations and mitigate the effects of fluctuations in cash flows. The management monitors the utilization of bank borrowings and ensures
compliance with loan covenants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">Liquidity tables</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">The following tables detail the Group&rsquo;s
remaining contractual maturity for its non-derivative financial liabilities as at December 31, 2022 based on agreed repayment terms. The
tables have been drawn up based on undiscounted cash flows of financial liabilities based on the earliest date on which the Group can
be required to pay. The tables include both interest and principal cash flows.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">As at December 31, 2022</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<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="white-space: nowrap; text-align: center">&nbsp;</TD><TD STYLE="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; white-space: nowrap; font-weight: bold; text-align: center">Within<BR> 1 year</TD><TD STYLE="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; white-space: nowrap; font-weight: bold; text-align: center">Over<BR> 1 year</TD><TD STYLE="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; white-space: nowrap; font-weight: bold; text-align: center">Total</TD><TD STYLE="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Short-term bank loans and related interests</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 64%; text-align: left">Trade and other payables</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">1,319,288</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">1,319,288</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Related parties payables</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,611,097</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">2,611,097</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt">Total</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">3,930,385</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">3,930,385</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">As at December 31, 2021</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<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="white-space: nowrap; text-align: center">&nbsp;</TD><TD STYLE="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; white-space: nowrap; font-weight: bold; text-align: center">Within<BR> 1 year</TD><TD STYLE="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; white-space: nowrap; font-weight: bold; text-align: center">Over<BR> 1 year</TD><TD STYLE="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; white-space: nowrap; font-weight: bold; text-align: center">Total</TD><TD STYLE="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: left">Short-term bank loans and related interests</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">1,180,656</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">1,180,656</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Trade and other payables</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,355,123</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,355,123</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; padding-bottom: 1.5pt">Related parties payables</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">467,568</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1.5pt solid; text-align: right">467,568</TD><TD STYLE="padding-bottom: 1.5pt; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4pt">Total</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">7,003,347</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4pt double; text-align: right">7,003,347</TD><TD STYLE="padding-bottom: 4pt; text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">6.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Fair value</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">The fair value of financial assets
and financial liabilities is determined in accordance with generally accepted pricing models based on discounted cash flow analysis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">The following table presents the fair
value of the Group&rsquo;s financial instruments measured at the end of the reporting period on a recurring basis, categorized into the
three-level fair value hierarchy as defined in IFRS 13, Fair Value Measurement. The level into which a fair value measurement is classified
is determined with reference to the observability and significance of the inputs used in the valuation technique as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 1in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Level 1 valuations: Fair value measured using only Level 1 inputs i.e. unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 1in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Level 2 valuations: Fair value measured using Level 2 inputs i.e. observable inputs which fail to meet Level 1, and not using significant unobservable inputs. Unobservable inputs are inputs for which market data are not available.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="vertical-align: top">
    <TD STYLE="width: 1in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify"><FONT STYLE="font-size: 10pt">-</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Level 3 valuations: Fair value measured using significant unobservable inputs.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">During the years ended December 31,
2022 and 2021, there were no transfers between Level 1 and Level 2, or transfers into or out of Level 3. The Group&rsquo;s policy is to
recognize transfers between levels of fair value hierarchy as at the end of the reporting period in which they occur.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify"><I>Valuation techniques and inputs
used in Level 2 fair value measurements</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">The fair value of financial assets
in Level 2 is determined by the model as disclosed in note 31.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">The directors of the Company consider
that the carrying amounts of financial assets and financial liabilities recorded at amortized cost approximate their fair values.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></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">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">35.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">COMMITMENTS AND CONTINGENCIES</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">(1)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">The Company had the following capital commitments in respect of the construction of plant and equipment which were contracted but not provided for in the financial statements:</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<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="white-space: nowrap; text-align: center">&nbsp;</TD><TD STYLE="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; white-space: nowrap; font-weight: bold; text-align: center">As at<BR> December&nbsp;31,<BR> 2022</TD><TD STYLE="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD><TD STYLE="white-space: nowrap; font-weight: bold; padding-bottom: 1.5pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1.5pt solid; white-space: nowrap; font-weight: bold; text-align: center">As at<BR> December&nbsp;31,<BR> 2021</TD><TD STYLE="white-space: nowrap; padding-bottom: 1.5pt; font-weight: bold">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 76%; text-align: left">Contracted and authorized, in RMB</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">440,851,273</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Contracted and authorized, in USD</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">69,399,168</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">(2)</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">As of December 31, 2022, the Company guaranteed a loan to a third party with maximum liability exposure of US$652,297.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="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">&nbsp;</TD>
    <TD STYLE="width: 24px; text-align: justify"><FONT STYLE="font-size: 10pt">36.</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">EVENTS AFTER THE BALANCE SHEET</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Effective on April 26, 2023, the Company&rsquo;s
Common Stock began trading on the Nasdaq Capital Market (&ldquo;Nasdaq&rdquo;) on a one-for-ten (1-for-10) reverse-split basis under the
current symbol &ldquo;JXJT&rdquo; but with a new CUSIP number. The EPS figures showed in the financial statements are calculated based
on the number of shares after  reverse-split.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">* * * * *</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; text-align: justify"></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT>&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT>&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT>F-47</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT></FONT></P>

<!-- Field: Rule-Page --><DIV STYLE="width: 100%"><DIV STYLE="font-size: 1pt; border-top: Black 1.5pt solid">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT>&nbsp;</FONT></P>





</BODY>
</HTML>
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{"company-data": {"conformed-name": "JX Luxventure Ltd", "cik": "0001546383", "assigned-sic": "5130", "irs-number": "000000000", "state-of-incorporation": "1T", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "20-F", "act": "34", "file-number": "001-35715", "film-number": "23916755"}, "business-address": {"street1": "BIN HAI DA DAO NO. 270, LANG QIN WAN GUO", "street2": "JI DU JIA CUN ZONG HE LOU, XIU YING DIST", "city": "HAIKOU CITY, HAINAN PROVINCE", "state": "F4", "zip": "570100", "phone": "(86) 595 8889 6198"}, "mail-address": {"street1": "BIN HAI DA DAO NO. 270, LANG QIN WAN GUO", "street2": "JI DU JIA CUN ZONG HE LOU, XIU YING DIST", "city": "HAIKOU CITY, HAINAN PROVINCE", "state": "F4", "zip": "570100"}, "former-company": [{"former-conformed-name": "KBS Fashion Group Ltd", "date-changed": "20141103"}, {"former-conformed-name": "Aquasition Corp.", "date-changed": "20120403"}]}
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F
(Mark One)
☐
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2022
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
OR
☐
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report:
Commission file number:
001-35715
JX Luxventure
limited
(Exact Name of Registrant as Specified in Its Charter)
Not Applicable
(Translation of Registrant's Name Into English)
Republic of the Marshall Islands
(Jurisdiction of Incorporation or Organization)
Bin Hai Da Dao No. 270
Lang Qin Wan Guo Ji Du Jia Cun Zong He Lou
Xiu Ying District
Haikou City, Hainan Province 570100
People's Republic of China
(Address of Principal Executive Offices)
Ms. Sun Lei, Chief Executive Officer
Bin Hai Da Dao No. 270
Lang Qin Wan Guo Ji Du Jia Cun Zong He Lou
Xiu Ying District
Haikou City, Hainan Province 570100
People's Republic of China
Tel: + (86) 595 8889 6198
Fax: (86) 595 8850 5328
(Name, Telephone, E-mail and/or Facsimile number
and Address of Company Contact Person)
Securities registered or to be registered pursuant
to Section 12(b) of the Act:
Title of Each Class
Trading Symbol(s)
Name of Each Exchange On Which Registered
Common Stock, $0.0001 par value
JXJT
NASDAQ Capital Market
Securities registered or to be registered pursuant
to Section 12(g) of the Act.
None
(Title of Class)
Securities for which there is a reporting obligation
pursuant to Section 15(d) of the Act.
None
(Title of Class)
Indicate the number of outstanding shares of each
of the issuer's classes of capital or common stock as of the close of the period covered by the annual report (December 31, 2022):
6,063,192.
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
☒
Note – Checking the box above will not relieve
any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations
under those Sections.
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes
☒
No
☐
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files) Yes
☒
No
☐
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of "large
accelerated filer, "accelerated filer," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer
☐
Accelerated Filer
☐
Non-Accelerated Filer
☒
Emerging Growth Company
☐
If an emerging growth company that prepares its
financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition
period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange
Act.
☐
† The term "new or revised financial
accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification
after April 5, 2012.
Indicate by check mark whether the registrant
has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report.
☐
If securities are registered pursuant to Section 12(b) of the Act, indicate
by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously
issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements
that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant
recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting
the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP
☐
International Financial Reporting Standards as
    issued by the
International Accounting Standards Board
☒
Other
☐
If "Other" has been checked in response
to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
☐
Item 17
☐
Item 18
If this is an annual report, indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
☐
No
☒
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant
has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent
to the distribution of securities under a plan confirmed by a court. Not Applicable
Annual Report on Form 20-F
Year Ended December 31, 2022
TABLE OF CONTENTS
Page
PART I
ITEM 1.
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
1
A.
Directors and Senior Management
1
B.
Advisors
1
C.
Auditors
1
ITEM 2.
OFFER STATISTICS AND EXPECTED TIMETABLE
1
A.
Offer Statistics
1
B.
Method and Expected Timetable
1
ITEM 3.
KEY INFORMATION
1
A.
[Reserved]
1
B.
Capitalization and Indebtedness
1
C.
Reasons for the Offer and Use of Proceeds
1
D.
Risk Factors
1
ITEM 4.
INFORMATION ON THE COMPANY
36
A.
History and Development of the Company
36
B.
Business Overview
40
C.
Organizational Structure
63
D.
Property, Plants and Equipment
63
ITEM 4A.
UNRESOLVED STAFF COMMENTS
63
ITEM 5.
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
63
A.
Operating Results
65
B.
Liquidity and Capital Resources
70
C.
Research and Development, Patents and Licenses, Etc.
72
D.
Trend Information
72
E.
Off Balance Sheet Arrangements
72
F.
Tabular Disclosure of Contractual Obligations
72
G.
Safe Harbor
83
ITEM 6.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
84
A.
Directors and Senior Management
84
B.
Compensation
85
C.
Board Practices
87
D.
Employees
88
E.
Share Ownership
88
ITEM 7.
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
89
A.
Major Shareholders
89
B.
Related Party Transactions
89
C.
Interests of Experts and Counsel
90
i
ITEM 8.
FINANCIAL INFORMATION
90
A.
Consolidated Statements and Other Financial Information
90
B.
Significant Changes
91
ITEM 9.
THE OFFER AND LISTING
91
A.
Offer and Listing Details
92
B.
Plan of Distribution
92
C.
Markets
92
D.
Selling Shareholders
92
E.
Dilution
92
F.
Expenses of the Issue
92
ITEM 10.
ADDITIONAL INFORMATION
92
A.
Share Capital
92
B.
Memorandum and Articles of Association
92
C.
Material Contracts
97
D.
Exchange Controls
97
E.
Taxation
99
F.
Dividends and Paying Agents
104
G.
Statement by Experts
104
H.
Documents on Display
105
I.
Subsidiary Information
105
ITEM 11.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
105
ITEM 12.
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
106
A.
Debt Securities
106
B.
Warrants and Rights
106
C.
Other Securities
106
D.
American Depositary Shares
106
PART II
107
ITEM 13.
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
107
ITEM 14.
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
107
ITEM 15.
CONTROLS AND PROCEDURES
107
A.
Disclosure Controls and Procedures
107
B.
Management's Annual Report on Internal Control Over Financial Reporting
107
C.
Attestation Report of the Registered Public Accounting Firm
108
D.
Changes in Internal Controls over Financial Reporting
108
ii
ITEM 16A.
AUDIT COMMITTEE FINANCIAL EXPERT
108
ITEM 16B.
CODE OF ETHICS
108
ITEM 16C.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
108
ITEM 16D.
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
109
ITEM 16E.
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
109
ITEM 16F.
CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
109
ITEM 16G.
CORPORATE GOVERNANCE
109
ITEM 16H.
MINE SAFETY DISCLOSURE
109
ITEM 16I.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
109
PART III
ITEM 17.
FINANCIAL STATEMENTS
110
iii
INTRODUCTORY
NOTES
Use
of Certain Defined Terms
Except
as otherwise indicated by the context and for the purposes of this annual report only, references in this report to:
●
"JX Luxventure,"
    "we," "us," "our" and the "Company" are to JX Luxventure Limited, a company organized
    in the Republic of the Marshall Islands;
●
"KBS International,"
    refers to KBS International Holding Inc., a Nevada corporation, which was dissolved in August 2014]
●
"Hongri PRC,"
    refers to Hongri (Fujian) Sports Goods Co., Ltd., a direct wholly-owned subsidiary of Hongri International, which was our indirect
    wholly-owned subsidiary organized in the PRC until October 19, 2022];
●
"Hongri International"
    are to Hongri International Holdings Limited, a company organized in the BVI, was our wholly-owned subsidiary until October
    19, 2022;
●
"BVI" are to
    the British Virgin Islands;
●
"Hong Kong"
    are to the Hong Kong Special Administrative Region of the People's Republic of China;
●
"PRC" and "China"
    are to the People's Republic of China;
●
"SEC" are to
    the Securities and Exchange Commission;
●
"Exchange Act"
    are to the Securities Exchange Act of 1934, as amended;
●
"Securities Act"
    are to the Securities Act of 1933, as amended;
●
"Renminbi"
    and "RMB" are to the legal currency of China; and
●
"U.S. dollars,"
    "dollars" and "$" are to the legal currency of the United States.
●
"Flower Crown"
    are to Flower Crown Holding, which is our wholly-owned subsidiary organized in Cayman Islands.
●
"Flower Crown HK"
    are to Flower Crown (China) Holding Group Co., Limited, which is a direct wholly-owned subsidiary of Flower Crown and our indirect
    wholly-owned subsidiary organized in Hong Kong.
iv
●
"Kim Hyun Tianjin"
    are to Kim Hyun Technology (Tianjin) Co., Ltd., which is a direct wholly-owned subsidiary of Flower Crown HK and our indirect wholly
    owned subsidiary organized in PRC.
●
"JX Hainan"
    or "WOFE" are to Jin Xuan (Hainan) Holding Co., Ltd, which is our wholly owned subsidiary organized in PRC.
●
"Jin Xuan Luxury
    Tourism" are to Jin Xuan Luxury Tourism (Hainan) Digital Technology Co., Ltd, which is a limited liability company organized
    in PRC and wholly owned by the WFOE.
●
"Heyang Travel"
    are to Beijing Heyang International Travel Service Co., Ltd., which is a wholly owned subsidiary of Jin Xuan Luxury Tourism organized
    in PRC.
Cautionary
Note Regarding Forward-Looking Statements
In addition to historical information, this annual
report on Form 20-F (the "Annual Report") contains forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. We use words such as "believe," "expect," "anticipate," "project,"
"target," "plan," "optimistic," "intend," "aim," "will" or similar
expressions which are intended to identify forward-looking statements. Such statements include, among others, those concerning market
and industry segment growth and demand and acceptance of new and existing products; any projections of sales, earnings, revenue, margins
or other financial items; any statements of the plans, strategies and objectives of management for future operations; and any statements
regarding future economic conditions or performance, as well as all assumptions, expectations, predictions, intentions or beliefs about
future events. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks
and uncertainties, as well as assumptions, which, if they were to ever materialize or prove incorrect, could cause the results of the
Company to differ materially from those expressed or implied by such forward-looking statements. Potential risks and uncertainties include,
among other things, the possibility that we may not be able to maintain or increase our net revenues and profits due to our failure to
execute our business expansion plan, changes in domestic and foreign laws, regulations and taxes, changes in economic conditions, uncertainties
related to China's legal system and economic, political and social events in China, a general economic downturn, a downturn in the
securities markets, and other risks and uncertainties which are generally set forth under Item 3 "
Key information—D. Risk
Factors" and elsewhere in this Annual Report.
Readers
are urged to carefully review and consider the various disclosures made by us in this report and our other filings with the SEC. These
reports attempt to advise interested parties of the risks and factors that may affect our business, financial condition and results of
operations and prospects. The forward-looking statements made in this report speak only as of the date hereof and we disclaim any obligation,
except as required by law, to provide updates, revisions or amendments to any forward-looking statements to reflect changes in our expectations
or future events.
On
April 26, 2023, the Company effected a one-for-ten (1-for-10) reverse stock split of the Company's issued and outstanding shares
of common stock, $0.0001 par value per share (the "Common Stock"). Previously, on February 9, 2017, the Company effective
a one-for-fifteen (1-for-15) reverse stock split of the Company's issued and outstanding shares of Common Stock. Unless specified
otherwise, and except as provided in the financial statements and footnotes thereto, all references in this Annual Report to share and
per share data have been adjusted, including historical data which has been retroactively adjusted, to give effect to these reverse stock
splits.
v
PART
I
ITEM 1.
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
A.
Directors and Senior Management
Not
applicable.
B.
Advisors
Not
applicable.
C.
Auditors
Not
applicable.
ITEM 2.
OFFER STATISTICS AND EXPECTED TIMETABLE
A.
Offer Statistics
Not
applicable.
B.
Method and Expected Timetable
Not
applicable.
ITEM 3.
KEY INFORMATION
A.
[Reserved]
B.
Capitalization and Indebtedness
Not
applicable.
C.
Reasons for the Offer and Use of Proceeds
Not
applicable.
D.
Risk Factors
An
investment in our Common Stock involves a high degree of risk. You should carefully consider the risks described below, together with
all of the other information included in this annual report, before making an investment decision.
In
addition to the other information included in this annual report, including the matters addressed in the section of the annual report
entitled "Cautionary Note Regarding Forward-Looking Statements" and in our financial statements and the related notes, you
should consider carefully the risks described below. The risks and uncertainties described below are not the only risks and uncertainties
we may face. Additional risks and uncertainties not presently known to us, or that we currently consider immaterial could also negatively
affect our business, financial condition, results of operations, prospects, profits and stock prices. If any of the risks described below
actually occur, our business, financial condition, results of operations, prospects, profits and stock prices could be materially adversely
affected.
If
we encounter any of the risks described above or if we are otherwise unable to establish or successfully operate online shops or additional
production capacity, we may be unable to grow our business and revenues, reduce our operating costs, maintain our competitiveness or
improve our profitability and, consequently, our business, financial condition, results of operations and prospects will be adversely
affected.
1
RISKS
RELATED TO OUR BUSINESS
Risks
Related to our Cross-Border Merchandise and Tourism Industries
Our
industry is highly competitive and we may not be able to compete successfully against current and future competitors.
If
we are unable to compete effectively, we may lose customers and our financial results may be negatively affected.
We
face intense competition in the cross-bordered merchandise and tourism industries in China. We expect greater competition in
the future from existing players and new market entrants. Some of our current and future competitors may have greater brand recognition
and financial and other resources than we do, which may make it more difficult for us to maintain or gain market share.
If
we are not able to effectively compete against current or future competitors, our business, financial condition and results of operations
could suffer. Increased competition may result in higher pricing pressure, reducing our ability to charge competitive prices for our
products and services and decreased market share, any of which could materially and negatively affect our business, financial condition
and results of operation.
If
we fail to effectively manage our growth, our business, financial condition and operating results could be harmed.
As we continue to expand our cross-border merchandise and tourism business,
our continued growth could strain our existing resources, and we could experience ongoing challenges, including:
●
managing
                                            our operational, administrative and financial capabilities and other resources;
●
managing
                                            our brand portfolio, including further expanding our products and services;
●
expanding
                                            marketing channels and deepening end customer outreaches;
●
staying
                                            abreast of the evolving industry demands and market developments and catering to end users'
                                            changing tastes of our business customers;
●
developing
                                            and applying technologies necessary to support our expanded operations;
●
effectively
                                            managing our supply chain;
●
responding
                                            to changes in the regulatory environment;
●
exploring
                                            new market opportunities; and
●
addressing
                                            other challenges resulting from our expansion.
All
efforts to address the potential challenges on our way to expansion require significant managerial, financial and human resources. We
cannot assure you that we will be able to effectively or timely address operating difficulties and challenges to keep up with our growth.
If we are unable to successfully address these difficulties, risks and uncertainties, our business, financial conditions and results
of operations could be materially and adversely affected.
Our
business depends on the continued success of our growing brand portfolio and if we fail to maintain and expand our brand portfolio or
maintain and enhance our brand recognition, our business, results of operations and prospects may be harmed.
We
mainly depend on our brand portfolio to scale our business, attract and retain our business customers. Our Luxventure portfolio, which
covers cross border merchandise and tourism products, seamlessly connected various brands from our suppliers. Although we have devoted
significant resources to and incurred large amount of expenses on sourcing, maintaining, promoting and expanding our brands, we cannot
assure you that these efforts will be successful. In addition, maintaining and enhancing the recognition of our brands are also key to
our success, which could be affected by various factors, including the effectiveness of our brand marketing strategy, publicity about
our business, quality of products offered under the brands as well as preference of consumers, certain of which are beyond our control.
Any failure to maintain and expand our brand portfolio or maintain and enhance our brand recognition could have a material and adverse
effect on our business, results of operations and prospects.
2
Negative
publicity about our brands, our business model or our products may materially and adversely affect our reputation, our business and the
trading price of our shares, regardless of its accuracy. We may also be adversely affected by negative publicity concerning us and our
business, shareholders, affiliates, directors, officers, employees, agents, other business partners and the industry in which we operate,
regardless of its accuracy.
Regardless
of its accuracy, negative publicity about our business model or our products may arise and appear on the internet and other media from
time to time, and negative publicity of more serious natures may arise in the future.
In
addition, our business model may be alleged to be involved in misconducts, improper activities, rumors, scandals or illegal activities
from time to time related to a variety of matters, such as misleading advertising practice. These allegations, even if factually incorrect
or based on isolated events, would result in negative publicity of our business, and may further have an adverse effect on our brand
and reputation.
Our
brands and brands of our suppliers may also be subject to negative publicity for various reasons, such as complaints about the quality
of the products, customer services or other public relation incidents of us, which may adversely affect our reputation, brand loyalty
and consequently affect the operation of our business. Any such negative publicity, regardless of its veracity, could result in the expenditure
of funds and management time and may have a material and adverse effect on our reputation, our business and the trading price of our
shares.
Moreover,
negative publicity concerning us and our business, shareholders, affiliates, directors, officers, employees, agents, other business partners
and the industry in which we operate can harm our brand and reputation, regardless of its accuracy. Negative publicity concerning these
parties could be related to a wide variety of matters, including, but are not limited to:
●
alleged
                                            misconducts or other improper activities committed by our directors, officers, employees,
                                            agents and other business partners;
●
false
                                            or malicious allegations or rumors about us or our directors, shareholders, affiliates, officers,
                                            employees and other business partners;
●
complaints
                                            from our business customers about our products and services;
●
employment-related
                                            claims relating to employment discrimination, working hours violation, tax, wage or pension
                                            matters;
●
governmental
                                            and regulatory investigations, penalties or claims resulting from misconduct of our business
                                            partners,
●
or
                                            our failure to comply with applicable laws and regulations;
●
negative
                                            publicity and claims asserted against our brand partners, especially any product quality
                                            issues of our
●
brand
                                            partners' products; and
●
negative
                                            publicity of the industry in which we operate, including, but not limited to, bankruptcy
                                            and cessation of business operations of any of our major competitors.
If
we fail to anticipate and respond to changing business customer preferences and shifts in market trends in a timely manner, our business
and operating results could be harmed.
Our
success largely depends on our ability to consistently gauge business customers' tastes and market trends, provide a balanced assortment
of merchandise and source brands that satisfies business customer demands in a timely manner. Our failure to anticipate, identify or
react appropriately and timely to changes in business customer preferences, tastes and market trends or economic conditions could lead
to, among other things, missed opportunities, excess inventory or inventory shortages, markdowns and write-offs, all of which could negatively
impact our profitability. In addition, failure to respond to changing business customer preferences and trends in brand could negatively
impact our brand image with our business customers and result in diminished brand loyalty, and thus harm the prospects of our business.
Our
product supply chain is essential to our business and is subject to risks associated with demands forecasting, timely supplying and warehousing,
as well as maintaining relationship with our suppliers.
We
largely depend on our supply chain management capabilities to minimize our inventory risks, maintain our short turnaround time and improve
our operational efficiency. However, our demand forecast may not be accurate, which could result in inventory write-offs or inventory
shortages. Even if we are able to make accurate demand forecast, our product supply chain may not be able to meet our demand on a timely
basis due to unexpected reasons. In addition, warehouses that we operate may not have sufficient capacity to process orders efficiently.
3
Our
product supply chain is also largely dependent on our relationship with our product suppliers. We cannot assure you that our current
product suppliers will continue to sell products or provide services to us on commercially acceptable terms, or at all, after the current
term of the agreement expires. If our suppliers cease to transact with us on favorable payment terms or deliver production in a timely
manner as agreed under the contract terms, our operations may be materially and adversely affected.
Although
we believe our supply chain has capacity to support our current operation, we cannot guarantee our supply chain will be adequate to support
our expanded business in the future. Thus, if we fail to manage our supply chain in line with our business expansion, our business, prospects,
financial condition and results of operations may suffer.
If
we fail to develop, upgrade and apply our technologies to support and expand our business, our business may be materially and adversely
affected.
We
rely on our technology infrastructure and operating systems to carry out the key aspects of our business, including identifying market
trends in brands, selecting and partnering with quality brand partners, forecasting business customers' demands, supporting our
product supply chain, enabling effective marketing and distribution, and refining business customer services. Although we did not experience
any material failure or breakdown of our operating systems in the past, we cannot guarantee that such risks are always under control.
In addition, computer viruses, security breaches and information theft may lead to delays or errors in transaction processing, inability
to fulfill purchase orders or loss of data. Any interruptions of our operating platform, whether caused by computer viruses, hacking
or other security breaches, and errors encountered during platform upgrades or other issues resulting in the unavailability, or slowdown
of our information technologies may, individually or collectively, materially and adversely affect our business and results of operations.
Cross-border merchandise
and tourism business are subject to rapid technological changes and innovations. Our technologies may become obsolete or insufficient.
The
nature of our business is subject to rapid technological changes, and we may have difficulties in following and adapting to technological
changes in the industry in a timely and cost-effective manner, which could impact every key aspect of our business. New technologies
developed and introduced by our competitors could render our products and services less attractive or obsolete, thus materially affecting
our business and prospects. In addition, our substantial investments in technology may not produce expected results. If we fail to continue
to develop, innovate and utilize our technologies or if our competitors develop or apply more advanced technologies, our business, financial
condition and results of operations could be materially and adversely affected.
We
conduct our business through online third party platforms operated by our business customers. The material disruption of those platforms
or any adverse changes on our cooperation with them could harm our business and operation.
We
use third party platforms operated by our business customers to promote and sell our products. Our growth is subject to aforesaid third
party platforms' traffic growth, account using terms and conditions and regulations, among other factors. If these platforms'
traffic fails to grow in the future, our growth may slow down as well. If we breach the using terms of such platforms, the platform operators
may decide at any time to curtail or inhibit our ability to use such platforms. Meanwhile, these platforms may increase their fees or
make changes to their respective business models, using terms, policies or systems, and those changes could impair or restrict our ability
sell products. In addition, these platforms may be interrupted by regulatory restrictions, cease operations unexpectedly due to a number
of events, or even shut down due to their operating problems.
Any
of the above could affect our ability to maintain profitability or have a material adverse effect on our business, financial condition
or results of operations.
4
Order cancelation
as well as merchandise return and exchange policies may adversely affect our business and the results of operations.
We allow our business
customers to cancel orders within a fixed amount of time after the payment and to return products, subject to our return policy. Our order
cancelation rate and product return rate may fluctuate or even increase in the future due to various factors, many of which are beyond
our control. In addition, as we diversify our marketing efforts and expand to more sales channels, our order cancelation rate and product
return rate may further increase. Moreover, our products might be damaged during transit from time to time, especially during international
transportation, which increases the return rate and harms our brands as well. If the rate of order cancelation or product returns increases
significantly, our inventory turnovers and cash flow could be adversely affected, and thus harm our financial condition and operating
results.
Moreover,
we may be required by law to adopt new or amend existing return and exchange policies from time to time. In addition to regulatory requirements,
we may also modify our return policies from time to time, which may result in customers' dissatisfaction or an increase in order
cancelation or product returns rates.
We
rely on third-party product suppliers, manufacturers, logistics service providers and other vendors to serve our business customers.
If they fail to provide products or services that are consistent with our standards or applicable regulatory requirements, we may have
to find alternative vendors, and our reputation and operation could suffer.
We
do not own or operate any manufacturing facilities. Instead, we rely on third-party manufacturers and third-party product suppliers to
supply all of the products offered on third party platform operated by our business customers. We enter into framework procurement contracts
with different third-party product suppliers and manufacturers. The capacities of our third-party product suppliers and manufacturers
are subject to orders placed by their other clients, which may include our competitors. If our demands increase significantly, or our
existing suppliers run out of their capacity, we may not be able to find additional or alternative suppliers in a timely manner. We also
cannot guarantee that we will have superior bargaining power over third-party product suppliers and manufacturers for our newly launched
products. In addition, quality control issues, such as the use of unqualified materials, may exist in certain third-party product suppliers
and could cause consumer dissatisfaction and as a result, harm our business.
We
rely on third-party logistics service providers to deliver products to our customers. Any delay, damages, loss and inappropriate actions
taken by logistics service providers might cause customer complaints. Although we may claim compensation from third-party logistics service
providers in some cases, our business, financial condition and results of operations could suffer as well.
We
procure inventory based on our forecast on business customer demands, and if we are unable to manage our inventory effectively, our operating
results could be adversely affected.
Our
scale and business model requires us to manage a large volume of inventory effectively. Our forecast on demands may significantly differ
from actual demands. Demands may be affected by seasonality, new product launches, rapid changes in product cycles and pricing, product
defects, promotions, changes in business consumer spending patterns, changes in business consumer tastes with respect to our products
and other factors, and our business consumers may not purchase products in the quantities that we expect. We may not be able to return
unsold products to our suppliers unless the products are defective or otherwise agreed with our suppliers.
On the other hand, if
we underestimate demand and thus run short of inventory, our growth may be adversely affected due to lower sales volume and unsatisfied
shopping experiences.
Furthermore,
if we fail to negotiate favorable credit terms with third-party suppliers and manufacturers, we may be subject to a heightened risk of
inventory obsolescence, a decline in inventory values, and significant inventory write- downs or write-offs. In case that we are required
to lower sale prices in order to reduce inventory level or to pay higher prices to our suppliers, our profit margins might be negatively
affected. Any of the above may materially and adversely affect our business, financial condition and operating results.
5
If we fail to obtain
requisite approvals or licenses or fail to comply with other regulatory requirements applicable to our operations, we may be subject to
administrative penalties and our business and operating results could be adversely affected.
Our
business is subject to general business regulations governing cross-borders and tourism industries. We are also subject to
supervision and regulation by the State Administration for Market Regulation of the PRC and other relevant PRC government authorities
and/or their relevant local counterparts. While we currently hold all material licenses and permits required for our operations, we may
be required to renew these licenses and permits upon their expiration or obtain new licenses or permits in the future as a result of
our business expansion, changes of our operations, changes in laws and regulations applicable to us, or changes of interpretation from
relevant authorities on such laws and regulations.
After consulting our PRC legal
counsel, Beijing Dacheng Law Offices LLP (Haikou), we believe we and our PRC subsidiaries have obtained all necessary licenses and approvals
required for our operations in China, including business licenses and VAT licenses for internet data center services, internet access
services, domestic internet protocol virtual private network services, content delivery network services and information services.
However,
any failure, or perceived failure, by us to comply with any of these requirements could result in damage to our reputation, a loss in
business, and proceedings or actions against us which could be costly and disrupt our overall operations. We may also be contractually
liable to indemnify and hold harmless third parties from the costs or consequences of noncompliance with any such laws or regulations.
Any of these events may have a material and adverse effect on our business, financial condition and results of operations.
Our
results of operations may fluctuate due to the seasonality of our business and other events, which could cause our stock price to decline.
We
have experienced, and expect to continuously experience, seasonal fluctuations in our results of operations, due to seasonal changes
in sales volume, as well as seasonality in our advertising services.
In addition, the business hours of our logistics
and fulfillment service will be impacted by the holidays. Moreover, our results of operations may fluctuate due to changes in production
cycle and launch of new styles or events.
Our
product suppliers, manufacturers, independent contractors or commercial partners may engage in misconduct or other improper activities,
including unfair competition and noncompliance with laws and regulations, which may adversely affect our business and results of operations.
We
are exposed to the risk that our product suppliers, manufacturers, independent contractors or commercial partners may engage in misconduct.
Misconduct by these parties could include intentional, reckless or negligent conduct or improper sales, marketing and business arrangements,
in particular, arrangements that may constitute unfair competition. It is not always possible for us to identify and deter misconduct
by our product suppliers, independent contractors or commercial partners, and the precautions we take to detect and prevent this activity
may not be effective in controlling unknown, unmanaged risks and losses, or in protecting us from negative publicity, governmental investigations,
actions or lawsuits stemming from such misconducts. No matter whether we can succeed in dealing with negative publicity or defending
against investigations or actions, we could incur substantial costs and divert the attention of management, which could adversely affect
our ability to operate our business and our results of operations.
If
we fail to adapt and respond effectively to rapidly changing technology, evolving industry standards, changing regulations, and changing
customer needs, requirements or preferences, our products and solutions may become less competitive.
We
believe that our technology solution provides solutions for cross-border operations management and is innovative and reliable tool for
businesses engaged in international commerce. However, we face uncertainties over the size and rate at which this market will grow, as
well as whether our solutions and products will be widely adopted. Moreover, the technology solution industry is subject to rapid technological
change, evolving industry standards, changing regulations, as well as changing customer needs, requirements and preferences. The success
of our business will depend, in part, on our ability to adapt and respond effectively to these changes on a timely basis. If we are unable
to develop new solutions and products that satisfy our existing customers and provide enhancements and new features for our existing
products that keep pace with rapid technological and industry change, our business, results of operations and financial condition could
be adversely affected. If new technologies emerge that are able to deliver competitive products and services at lower prices, more efficiently,
more conveniently or more securely, such technologies could adversely impact our ability to compete effectively.
6
Our
platform must also integrate with a variety of network, hardware, software platforms and technologies, and we need to continuously modify
and enhance our products and platform to adapt to changes and innovation. For example, if customers adopt new software platforms or infrastructure,
we may be required to develop new versions of our products to be compatible with those new software platforms or infrastructure. This
development effort may require significant resources, which would adversely affect our business, results of operations and financial
condition. In addition, we may not be able to keep track of the latest market developments in the IT industry and to provide relevant
new products and solutions to the evolving market demand. Any failure of our products and platform to operate effectively with evolving
or new software platforms and technologies could reduce the demand for our products. If we are unable to respond to these changes in
a cost- effective manner, our products may become less marketable and less competitive or obsolete, and our business, results of operations
and financial condition could be adversely affected.
Data
loss, security incidents and other attacks on our platform, products or solutions, or our global network infrastructure could lead to
significant costs and disruptions that could harm our business, financial results, and reputation.
Our
technology solution model is dependent on providing our customers with secure, reliable and high-quality services. Maintaining the security
and availability of our infrastructure, systems, platform, network, and the security of information and data we hold is a critical issue
for us and our customers. Attacks on our customers and our own network may be frequent and may happen in a variety of forms, including
infrastructure attacks, botnets, malicious file attacks, cross-site scripting, credential abuse, ransomware, viruses, worms, and malicious
software programs. Malicious actors can attempt to fraudulently induce employees or suppliers to disclose sensitive information through
spamming, phishing, or other tactics. In addition, unauthorized parties may attempt to gain physical access to our facilities in order
to infiltrate our information systems. Since our customers share our multi-tenant architecture, material attacks on any one of our customers
could have a negative effect on other customers. These attacks may also significantly increase the bandwidth used on our platform and
strain our network. If attacks like these were to occur in the future and if we do not have the systems and processes in place to respond
to them, our business could be harmed.
In
recent years, cyber-attacks have increased in size, sophistication, and complexity, increasing exposure for our customers and us.
We may become an attractive target for attacks on our infrastructure intended to destabilize, overwhelm, or shut down our platform. The
costs incurred by us to avoid or alleviate cyber or other security problems and vulnerabilities will be significant. However, our efforts
to address these problems and vulnerabilities may not be successful. Any significant breach of our security measures could:
●
lead
                                            to the dissemination of proprietary information or sensitive, personal, or confidential data
                                            about us, our employees, or our customers—including personally identifiable information
                                            of individuals involved with our customers and their end-users;
●
lead
                                            to interruptions or degradation of performance in our platform, products and solutions;
●
threaten
                                            our ability to provide our customers with access to our platform, products and solutions,
                                            and negatively affect our abilities to retain existing customers;
●
generate
                                            negative publicity about us;
●
result
                                            in litigation and increased legal liability or fines; or
●
lead
                                            to governmental inquiry or oversight.
The
occurrence of any of these events could harm our business or damage our brand and reputation, lead to customer credits, loss of customers,
higher expenses, and possibly impede our present and future success in retaining and attracting new customers. Security incidents or
attacks on our infrastructure would be damaging to our reputation and could harm our business.
7
Our
use of licensed third-party or open-source software could negatively affect our ability to provide consistent online experiences.
We
use software licensed from third parties. Any interruptions that result from the unavailability of the software licensed from third parties
may affect the quality of our services. We may also encounter problems when software licensed from third parties is upgraded, and undetected
programming errors could adversely affect the performance of the software we use to provide our services.  Although we have implemented
policies to regulate the use and incorporation of open-source software into our products and platform, we cannot be certain that we have
not incorporated open source software in our products or platform in a manner that is inconsistent with such policies. If we or our employees
fail to comply with open source licenses, we may be subject to certain requirements, including requirements that we offer our products
that incorporate the open source software for no cost, that we make available source code for modifications or derivative works we create
based upon, incorporating or using the open source software and that we license such modifications or derivative works under the terms
of applicable open source licenses. If an author or other third party that distributes such open source software were to allege that
we had not complied with the conditions of one or more of these licenses, we could be required to incur significant legal expenses defending
against such allegations and could be subject to significant damages, enjoined from generating revenues from customers using products
that contained the open source software and required to comply with onerous conditions or restrictions on these products. In addition,
we use open-source software in the applications we have developed to operate our business and will use open source software in the future.
We could be required to seek licenses from third parties in order to continue using the open source software we are permitted to use
currently, in which case licenses may not be available on terms that are acceptable to us, or at all. Our inability to use third-party
software could result in disruptions to our business, or delays in the development of future offerings or difficulties in enhancing our
operating platforms, which could materially and adversely affect our business and results of operations.
Moreover,
we use third-party technology and systems in a variety of technical and operational aspects of our business, including encryption and
authentication technology, employee email, content delivery to customers, back-office support, among others. Similar security risks exist
with respect to such third-parties. As a result, we are subject to the risk that cyber-attacks on our business partners and third-party
suppliers may adversely affect our business even if an attack or breach does not directly impact our systems. It is also possible that
security breaches sustained by our competitors could result in negative publicity for our entire industry that indirectly harms our reputation
and diminishes demand for our platform.
Changes
in laws and regulations related to the internet or changes in the internet infrastructure itself may diminish the demand for our products
and solutions, and could adversely affect our business, results of operations and financial condition.
The
future success of our business depends upon the continued use of the internet as a primary medium for commerce, communications and business
applications. Chinese or foreign government bodies or agencies have in the past adopted, and may in the future adopt, laws or regulations
affecting the use of the internet as a commercial medium. Changes in these laws or regulations could require us to modify our products
and platform in order to comply with these changes. In addition, government agencies or private organizations have imposed and may impose
additional taxes, fees or other charges for accessing the internet or commerce conducted via the internet. These laws or charges could
limit the growth of internet-related commerce or communications generally, or result in reductions in the demand for internet-based products
and services such as our products and platform. In addition, the use of the internet as a business tool could be adversely affected due
to delays in the development or adoption of new standards and protocols to handle increased demands of internet activity, security, reliability,
cost, ease-of-use, accessibility and quality of service. The performance of the internet and its acceptance as a business tool has been
adversely affected by "viruses," "worms," and similar malicious programs. If the use of the internet is reduced
as a result of these or other issues, then demand for our products could decline, which could adversely affect our business, results
of operations and financial condition.
8
Moreover,
our business depends on the performance, reliability and security of the telecommunications and internet infrastructure in China and
other countries in which we operate or locate our assets. Substantially all access to the internet in China is maintained through certain
telecommunication operators under the administrative control and regulatory supervision of the Ministry of Industry and Information Technology,
or the MIIT. In addition, the national networks in China are connected to the internet through qualified international gateways, which
are the only channels through which a domestic user can connect to the internet outside of China. We may face similar or other limitations
in other countries in which we operate or locate our assets. We may not have access to alternative networks in the event of disruptions,
failures or other problems with the internet infrastructure in China or elsewhere. In addition, the internet infrastructure in the countries
in which we operate may not support the demands associated with continued growth in Internet usage. We also have no control over the
costs of the services provided by the telecommunications operators. If the prices that we pay for telecommunications and internet services
rise significantly, our margins could be adversely affected.
Other
Risks Related to Our Business
If
we cannot successfully protect our intellectual property and exclusive rights, our brand and business would suffer.
We
rely on a combination of trademark, patent, copyright, domain name and trade secret protection laws in China and other jurisdictions,
as well as confidentiality procedures and contractual provisions, to protect our intellectual property rights and other exclusive rights.
We also enter into agreements containing confidentiality obligations with our employees and any third parties who may access our proprietary
technology and information, and we rigorously control access to our proprietary technology and information.
Nevertheless,
we cannot guarantee that we can successfully protect our intellectual property and exclusive rights from unauthorized usage by third
parties or breach of confidentiality obligations by our counterparties. Furthermore, a third party may take advantage of the "first-to-file" trademark
registration system in China to register our brands in bad faith, which will cause us to incur additional costs for legal actions. Moreover,
confidentiality obligations may be breached by counterparties, and there may not be adequate remedies available to us for any such breach.
Accordingly, we may not be able to effectively protect our intellectual property rights and exclusive rights or to enforce our contractual
rights in China or elsewhere.
In
addition, policing any unauthorized use of our intellectual property and exclusive rights is difficult, time-consuming and costly. The
precautionary steps we have taken for protecting our rights may be inadequate. In the event that we resort to litigation to enforce our
intellectual property rights and exclusive rights, such litigation could result in substantial costs and a diversion of our managerial
and financial resources. We can provide no assurance that we will prevail in such litigation or that we would be able to halt any unauthorized
use of our intellectual property and exclusive rights. In addition, our trade secrets may be leaked to, or be independently discovered
by, our competitors. Any failure in protecting or enforcing our intellectual property rights could have a material adverse effect on
our business, financial condition and results of operations.
Pandemics
and epidemics, natural disasters, terrorist activities, political unrest, and other outbreaks could disrupt our delivery and operations,
which could materially and adversely affect our business, financial condition, and results of operations.
Global
pandemics, epidemics in China or elsewhere in the world, other widespread health epidemics or fear of spread of contagious diseases,
such as Ebola virus disease (EVD), coronavirus disease 2019 (COVID-19), Middle East respiratory syndrome (MERS), severe acute respiratory
syndrome (SARS), H1N1 flu, H7N9 flu, and avian flu, as well as hurricanes, earthquakes, tsunamis, or other natural disasters could disrupt
our business operations, reduce or restrict our supply of products and services, incur significant costs to protect our employees and
facilities, or result in regional or global economic distress, which may materially and adversely affect our business, financial condition,
and results of operations. Actual or threatened war, terrorist activities, political unrest, civil strife, and other geopolitical uncertainty
could have a similar adverse effect on our business, financial condition, and results of operations. Any one or more of these events
may impede our production and delivery efforts and adversely affect our sales results, or even for a prolonged period of time, which
could materially and adversely affect our business, financial condition, and results of operations.
The recent COVID-19 pandemic adversely
affected many businesses in China, including the Company's business. As China implemented nationwide efforts to contain the
spread of the novel coronavirus, particularly. during 2021 and 2022, when the most severe additional lockdowns were implemented,
including lockdowns in Hainan Island. These lockdowns had a significant impact on our operations, particularly on Hainan Island,
where we are based. As a result of the lockdown on Hainan Island, Chinese customs were closed, preventing the sanitization and
inspection of imported products for potential COVID-19 contamination. This effectively halted our cross-border operations. The
global spread of COVID-19 also affected our sales. This growth in revenue, especially revenues from our tourism business, has been
adversely impacted by COVID-19 pandemic at various times during 2021 because of government-enforced lockdowns.
9
Our
business is also vulnerable to natural disasters, such as snowstorms, earthquakes, fires or floods, and other calamities, such as wars,
acts of terrorism, environmental accidents, power shortages or communication interruptions. The occurrence of such a disaster or a prolonged
outbreak of an epidemic illness or other adverse public health developments in China or elsewhere in the world could materially disrupt
our business and operations. We cannot assure you that we are adequately protected from the effects of fire, floods, typhoons, earthquakes,
power loss, telecommunications failures, break-ins, war, riots, terrorist attacks, or similar events. Any of the foregoing events may
give rise to interruptions, damage to our property, delays in production, breakdowns, system failures, or internet failures, which could
adversely affect our business, financial condition, and results of operations. Our operations could be disrupted if any of our employees
or employees of our business partners were suspected of having any contagious disease, since this could require us or our business partners
to quarantine some or all of such employees or disinfect the facilities used for our operations. Our operations could also be severely
disrupted if our buyers, sellers or other participants were affected by such natural disasters, health epidemics or other outbreaks.
In addition, our revenues and profitability could be materially reduced to the extent that a natural disaster, health epidemic or other
outbreak harms the global or PRC economy in general and our industry as a whole.
We
may be accused of infringing intellectual property or proprietary rights of third parties.
We
cannot assure you that our content, product design, our offerings or our technologies do not or will not infringe upon copyrights or
other intellectual property rights (including, but not limited to, trademarks, patents and know-how) held by third parties.
Nor can we assure you that our use of software or any other intellectual properties in business and operation will not be alleged by
any third party as infringement resulting from lack of licenses. If any third-party infringement claims are brought against us, we may
be forced to divert management's time and other resources from our business and operations to defend against these claims. We may
also be prohibited from using such intellectual property or relevant content. As a result, we may incur licensing or usage fees, develop
alternatives of our own, or even need to pay damages, legal fees and other costs. Even if such assertions against us are unsuccessful,
they may cause us to lose existing and future business and incur reputational harm and substantial legal fees. As a result, our reputation
may be harmed and our business and financial performance may be materially and adversely affected.
We
have adopted policies and procedures to prohibit our members, employees and business partners from infringing upon third-party copyright
or other intellectual property rights.
However, we cannot assure you that they will not, against our policies, use
third-party copyrighted materials or intellectual property without proper authorization, and therefore result in disputes. In addition,
we may incur liability for unauthorized duplication or distribution of materials used in our online store and during our services. Although
we have set up rules and procedures to enable copyright owners to provide us with notice of alleged infringement, given the volume of
content we offer, we may not be able to identify and remove all potentially infringing content that may exist, and thus we may encounter
intellectual property claims against us.
The
success of our business depends on the continuing efforts of our senior management and other key personnel. If we fail to retain, attract
and train such personnel, our business may be materially and adversely affected.
The
success of our business depends significantly on our senior management. In particular, we rely on the expertise, experience and vision
of Ms. Sun Lei, our Chief Executive Officer, Interim Chief Financial Officer, co-Chairwoman and director. If she becomes unable or unwilling
to continue to contribute her services to us, we may not be able to replace them easily, or at all. As a result, our business may be
severely disrupted, and our financial condition and results of operations may be materially and adversely affected.
Additionally,
our future success also depends on our ability to attract, recruit and train a large number of qualified employees and retain existing
key employees. Competition for discovering and signing talents in cross-border merchandise and tourism industries in China is intense,
and the availability of suitable and qualified candidates in China is limited. In order to compete for talents, we may need to offer
higher compensation, better trainings, more attractive career opportunities and other benefits to our employees, which may be costly
and burdensome. There can be no assurance that we will be able to retain a qualified workforce necessary to support our future growth.
Furthermore, our ability to train and integrate new employees into our operations may not meet the demands of our growing business. Any
of the above issues related to our workforce may materially and adversely affect our operations and future growth.
10
We
may be subject to claims, disputes, litigation, allegations, complaints and investigations and other legal and administrative proceedings
from time to time arising out of our operations, some of which may be caused by activities of our customers or the content of their websites
and other internet properties, and our reputation and operations may be adversely affected.
We
have not been subject to any material allegations or complaints in the past, but we may be involved in legal and other disputes in the
ordinary courses of our business. We and our management may be subject to claims, disputes, lawsuits, investigations and other legal
and administrative proceedings incidental to the conduct of our business from time to time. We have not been subject to and are currently
not party to any legal or arbitration proceedings, including those relating to bankruptcy, receivership or similar proceedings and those
involving any third party, which may have, or have had in the recent past, material adverse effects on our financial position or profitability.
Any claims against us or our management, with or without merit, could be time-consuming and costly to defend or litigate, divert our
management's attention and resources or harm our brand equity.
Through
our network, we provide a wide variety of products that enable our customers to exchange information, conduct business, and engage in
various online activities both domestically and internationally. Our customers may use our platform and products in violation of applicable
law or in violation of our terms of service or the customer's own policies. The existing laws relating to the liability of providers
of online products and services for activities of their users are highly unsettled and in flux both within China and internationally.
We may be subject to lawsuits and/or liability arising from the conduct of our customers from time to time. Additionally, the conduct
of our customers may subject us to regulatory enforcement actions and/or liability. We may be a defendant in a number of lawsuits both
in China and abroad, alleging copyright infringement based on content that is made available through our customers' websites. There
can be no assurance that we will not face litigation or regulatory enforcement actions in the future or that we will prevail in any litigation
we may face. An adverse decision in one or more of these lawsuits or enforcement action could materially and adversely affect our business,
results of operations, and financial condition.
Claims
arising out of actual or alleged violations of law, breach of contract or torts could be asserted against us by customers, business partners,
suppliers, competitors, employees or governmental entities in investigations and legal proceedings. These claims could be asserted under
a variety of laws, including but not limited to the intellectual property laws, labor and employment laws, securities laws, tort laws,
contract laws, property laws, and employee benefit laws. If a lawsuit or governmental proceeding against us is successful, we may be
required to pay substantial damages or fines. We might also be involved in governmental investigations of our business operation in the
future. Any claims against us, with or without merit, could be time-consuming and costly to defend or litigate, divert our management's
attention and resources or harm our brand equity. If a lawsuit or governmental proceeding against us is successful, we may be required
to pay substantial damages or fines. We may also lose, or be limited in, the rights to offer some of our content, products and services
or be required to make changes to our content offerings or business model. As a result, the scope of our content, product and service
offerings could be reduced, which could adversely affect our ability to attract new business customers, harm our reputation and have
a material adverse effect on our business, financial condition and results of operations.
Imposition
of trade barriers and taxes may reduce our ability to do business internationally, and the resulting loss of revenue could harm our profitability.
We
may experience barriers to conducting business in the form of delayed customs clearances, customs duties and tariffs. In addition, we
may be subject to repatriation taxes levied upon the exchange of income from local currency into foreign currency, substantial taxes
on profits, revenues, assets and payroll, as well as value-added tax. The markets in which we plan to operate may impose onerous and
unpredictable duties, tariffs and taxes on our business and products, and there can be no assurance that this will not reduce the level
of sales that we achieve in such markets, which would reduce our revenues and profits.
11
We
may expand our business through acquisitions, investments or strategic alliances in the future, but we might not be able to successfully
pursue synergy from acquisitions or to achieve the benefits we expect from recent and future investments, strategic alliances and acquisitions.
We
may form strategic alliances or make strategic investments and acquisitions from time to time to complement and enhance our existing
business. We may experience difficulties in integrating our operations with the newly invested or acquired businesses, implementing our
strategies or achieving expected levels of revenues, profitability, productivity or other benefits. Moreover, if the businesses we acquire
or invest in or our strategic alliances or partnerships do not subsequently generate the anticipated financial performance or if any
goodwill impairment test triggering event occurs, we may need to revalue or write down the value of goodwill and other intangible assets
in connection with such transactions, which would harm our business, financial condition and results of operations.
In
addition, we may not be able to identify appropriate strategic investment or alliance targets when it is necessary or desirable to make
such acquisition or investment to remain competitive or to expand our business. Even if we identify an appropriate target, we may not
be able to negotiate the terms of the transaction successfully. In the event that we do not have control over the companies in which
we only have minority stake, we cannot ensure that these companies will at all times comply with applicable laws and regulations in their
business operations.
The expansion of our business may place significant strain on our personnel,
management, financial systems and operational infrastructure and may impede our ability to meet any increased demand for our products.
Any failure by us or our business partners to comply with product safety, labor, tax or other laws, or to provide safe conditions
for our or their workers may damage our reputation and brand and harm our business.
Our
products are subject to regulation by various governmental authorities in China. Such products could be in the future subject to potential
recalls and other remedial actions. Product safety, labeling and licensing concerns, including consumer disclosure and warning regarding
chemical exposure, may result in recall or suspended offering of products, which in turn could result in a material adverse effect on
our operating results.
To
accommodate the Company's growth, we will need to implement a variety of new and upgraded operational and financial systems, procedures,
and controls, including improvements to our accounting and other internal management systems, by dedicating additional resources to our
reporting and accounting function and improvements to our record keeping and contract tracking system. We will also need to recruit more
personnel and train and manage our growing employee base. Furthermore, we will need to maintain and expand relationships with our current
and future customers, suppliers, distributors and other third parties, and there is no guarantee that we will succeed.
We
procure products from a variety of third-party suppliers, manufacturers and other business partners. If they fail to comply with applicable
laws and regulations, we may also face or get involved in litigations, which could increase our legal costs. In addition, other misconduct
of our business partners such as failure to provide safe and humane working conditions could harm our reputation and business as well.
The
estimates of market opportunity and forecasts of market growth in this Annual Report may prove to be inaccurate. Even if the market in
which we compete achieves the forecasted growth, our business could fail to grow at similar rates, if at all.
Market
opportunity estimates and growth forecasts, including those we have generated ourselves, are subject to significant uncertainty and are
based on assumptions and estimates that may not prove to be accurate. The variables that go into the calculation of our addressable market
size are subject to change over time, and there is no assurance that any target business customers covered by our market opportunity
estimates will purchase our products at all or generate any particular level of revenue for us. Any expansion in our market depends on
a number of factors, including the cost, performance, competition and perceived value associated with our products and services. Even
if the market in which we compete meets the size estimates and growth forecasted, our business could fail to grow at similar rates, if
at all, due to various factors, including failure to execute our growth plan, ineffective management over operations and adverse impact
from negative publicity. Accordingly, the forecasts of market growth should not be taken as indicators of our future growth.
12
We
may be unable to establish and maintain an effective system of internal control over financial reporting, and, as a result, we may be
unable to accurately report our financial results or prevent fraud.
We
are subject to reporting obligations under the U.S. securities law. The SEC as required by Section 404 of the Sarbanes-Oxley Act of 2002
("SOX 404"), adopted rules requiring every public company to include a management report on such company's internal
control over financial reporting in its annual report, which must also contain management's assessment of the effectiveness of
the company's internal control over financial reporting. In addition, the independent registered public accounting firm auditing
the financial statements of a company that is not a non-accelerated filer, emerging growth company or smaller reporting company under
Rule 12b-2 of the Exchange Act must also attest to the operating effectiveness of the company's internal controls.
Failure
to achieve and maintain an effective internal control environment could result in our inability to accurately report our financial results,
prevent or detect fraud or provide timely and reliable financial and other information pursuant to the reporting obligations we have
as a public company, which could have a material adverse effect on our business, financial condition and results of operations. Further,
it could cause our investors to lose confidence in the information we report, which could adversely affect our stock price.
We
may incur liabilities that are not covered by insurance.
While
we seek to maintain appropriate levels of insurance, not all claims are insurable and we may experience major incidents of a nature that
are not covered by insurance. We provide social security insurance including pension, medical insurance, unemployment insurance, maternity
insurance, on-the-job injury insurance and housing fund plans through a PRC government-mandated benefit contribution plan for our employees.
We do not carry any key-man life insurance, product liability, Directors and Officers Insurance and professional liability insurance.
Even if we purchase these kinds of insurance, the insurance may not fully protect us from the financial impact of defending against product
liability or professional liability claims. We have not purchased any property insurance or business interruption insurance. We have
determined that the costs of insuring for related risks and the difficulties associated with acquiring such insurance on commercially
reasonable terms make it impractical. We consider our insurance coverage to be sufficient for our business operations in China. We maintain
an amount of insurance protection that we believe is adequate, but there can be no assurance that such insurance will continue to be
available on acceptable terms or that our insurance coverage will be sufficient or effective under all circumstances and against all
liabilities to which we may be subject. If we were to incur substantial losses or liabilities due to fire, explosions, floods, other
natural disasters or accidents or business interruption, our results of operations could be materially and adversely affected. We could,
for example, be subject to substantial claims for damages upon the occurrence of several events within one calendar year. In addition,
our insurance costs may increase over time in response to any negative development in our claims history or due to material price increases
in the insurance market in general.
Leakage
or misappropriation of know-how, confidential information and trade secrets from unauthorized copying, use or disclosure could have an
adverse impact on our reputation and operations.
During
the course of providing our services, we may have access to and be entrusted with information that is confidential in nature, such as
information that relates to our customers' systems, operations, raw data or affairs. While we have adopted measures to protect
the confidentiality of our customers' information, including our internal control manual and the nondisclosure arrangements with
our employees, there is no assurance that the steps taken by us will successfully prevent any leakage or misappropriation of confidential
information of our customers. Any leakage or misappropriation of confidential information of our customers could expose us to complaints
or claims, which may materially and adversely affect our reputation and business operations. In addition, we seek to protect our know-how,
confidential information and trade secrets, in part, by entering into non-disclosure and confidentiality agreements or other means to
such effect, with parties who have access to them, such as our employees. Despite these efforts, any of these parties may breach such
agreements, intentionally or unintentionally and disclose our proprietary information and we may not be aware of or able to obtain adequate
remedies for such breaches. The unauthorized disclosure and/or misappropriation of trade secrets is difficult to detect and/or to prove.
As such, it is difficult, expensive and time-consuming to establish trade secret misappropriation claims, with no guarantee of success
or adequate remedies. Such disclosures could also lead to a loss of trade secret protection, which could materially and adversely affect
our business, competitive position, financial conditions and results of operations.
13
RISKS
RELATED TO DOING BUSINESS IN CHINA
Because we conduct substantially all of
our business operations in China, our business is subject to the complex and rapidly evolving laws and regulations there. Chinese government
may exercise significant oversight and discretion over the conduct of our business and may intervene in or influence our operations at
any time, which could result in a material change in our operations and/or the value of our common stock, could significantly limit or
completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly
decline or be worthless.
As a company that conducts substantially of its business operations
in China, we are subject to the laws and regulations of the PRC, which can be complex and evolve rapidly, and to
risks
associated with complying with these laws and regulations
. The PRC government has the power to exercise significant oversight and
discretion over the conduct of our business, and the regulations to which we are subject may change rapidly and with little notice to
us or our shareholders. As a result, the application, interpretation, and enforcement of new and existing laws and regulations in the
PRC are often uncertain. In addition, these laws and regulations may be interpreted and applied inconsistently by different agencies or
authorities, and inconsistently with our current policies and practices. New laws, regulations, and other government directives in the
PRC may also be costly to comply with, and such compliance or any associated inquiries or investigations or any other government actions
may:
●
Delay
                                            or impede our development,
●
Result
                                            in negative publicity or increase our operating costs,
●
Require
                                            significant management time and attention, and
●
Subject
                                            us to remedies, administrative penalties and even criminal liabilities that may harm our
                                            business, including fines assessed for our current or historical operations, or demands or
                                            orders that we modify or even cease our business practices.
The
promulgation of new laws or regulations, or the new interpretation of existing laws and regulations, in each case that restrict or otherwise
unfavorably impact the ability or manner in which we conduct our business and could require us to change certain aspects of our business
to ensure compliance, which could decrease demand for our products, reduce revenues, increase costs, require us to obtain more licenses,
permits, approvals or certificates, or subject us to additional liabilities. To the extent any new or more stringent measures are required
to be implemented, our business, financial condition and results of operations could be adversely affected, and any such action could
significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such
securities to significantly decline or be worthless.
Risks
related to a future determination that the Public Company Accounting Oversight Board (the "PCAOB") is unable to inspect or
investigate our auditor completely.
The
recent joint statement by the SEC and the Public Company Accounting Oversight Board (the "PCAOB"), rule changes by Nasdaq,
and the Holding Foreign Companies Accountable Act and related regulations, all call for additional and more stringent criteria to be
applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not
inspected by the PCAOB. These developments could add uncertainties to our continued listing on Nasdaq Capital Market or future offerings
of our securities in the U.S. and could result in a material adverse change in our operations and the value of our Common Stock, significantly
limit or completely hinder our ability to offer or continue to offer securities to investors and cause such securities to significantly
decline in value or become worthless
.
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.
14
On
May 18, 2020, Nasdaq filed three proposals with the SEC to (i) apply a minimum offering size requirement for companies primarily operating
in a "Restrictive Market," (ii) adopt a new requirement relating to the qualification of management or the board of directors
for Restrictive Market companies, and (iii) apply additional and more stringent criteria to an applicant or listed company based on the
qualifications of the company's auditor. On October 4, 2021, the SEC approved Nasdaq's revised proposal for the rule changes.
On
May 20, 2020, the U.S. Senate passed the Holding Foreign Companies Accountable Act ("HFCAA"), and on December 18, 2020, the
HFCAA was signed into law. On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure
and documentation requirements of the HFCAA. The HFCAA, among other things, directs the SEC to prohibit trading on U.S. stock exchanges
and in the U.S. over-the-counter markets the securities of foreign-based companies if their financial statements are audited by accounting
firms that the PCAOB determines it has been unable to inspect or investigate completely for a period of two consecutive audit years ("Non-Inspection
Years"), because of a position taken by the authorities in a foreign jurisdiction in which the accounting firms are based (each
accounting firm so determined by the PCAOB, a "PCAOB-Identified Firm").
On
September 22, 2021, the PCAOB adopted a final rule implementing the HFCAA, which provides a framework for the PCAOB to use when determining,
as contemplated under the HFCAA, whether the board of directors of a company is unable to inspect or investigate completely registered
public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.
On
December 2, 2021, the SEC adopted amendments to finalize rules implementing the submission and disclosure requirements in the HFCAA.
Pursuant to the HFCAA, the PCOAB issued a Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or
investigate completely registered public accounting firms headquartered in: (1) mainland China of the People's Republic of China,
because a position taken by one or more authorities in mainland China; and (2) Hong Kong, a Special Administrative Region and dependency
of the PRC, because of a position taken by one or more authorities in Hong Kong. In addition the PCOAB's report identified the
specific registered public accounting firms which are subject to these determinations. Our registered public accounting firm, Onestop
Assurance PAC ("Onestop") is a Singapore-based independent public accounting firm; it is
not
headquartered
in mainland China or Hong Kong and was
not
identified in this report as a firm subject to the PCAOB's determination.
On
August 26, 2022, the CSRC, MOF, and the PCAOB signed the Protocol, governing inspections and investigations of audit firms based in China
and Hong Kong, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms
headquartered in mainland China and Hong Kong. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB
shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer
information to the SEC.
On
December 15, 2022, the PCAOB determined that it was able to secure complete access to inspect and investigate registered public accounting
firms headquartered in mainland China and Hong Kong and vacated its previous determinations to the contrary. However, should PRC authorities
obstruct or otherwise fail to facilitate the PCAOB's access in the future, the PCAOB may consider the need to issue a new determination.
On
June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act (the "AHFCAA"), and on December
29, 2022, the Consolidated Appropriations Act 2023 was signed into law, which contained, among other things, an identical provision to
the AHFCAA, which reduces the number of consecutive non- inspection years required for triggering the prohibitions under the HFCAA from
three years to two.
Our
auditor, Onestop, is a Singapore-based independent public accounting firm that is registered with the PCAOB and can be inspected by the
PCAOB, and is subject to laws pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional
standards. The PCAOB currently has access to inspect the working papers of our auditor. We have no intention of dismissing Onestop in
the future or of engaging any auditor not subject to regular inspection by the PCAOB. 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 since we are an emerging growth company and substantial all of our operations are conducting in China. Furthermore, the HFCAA and
related laws, which now require the SEC to prohibit an issuer's securities from trading on any U.S. stock exchanges if its auditor
is not subject to PCAOB inspections for two consecutive years, may result in the delisting of our Company or the prohibition of trading
in our securities in the future if the PCAOB is unable to inspect our accounting firm at such future time. Delisting may cause a significant
decrease in or a total loss of the value of our securities. Although a shareholder's ownership of our Company may not decrease directly
from delisting, the ownership may become worth much less, or, in some cases, lose its entire value.
15
Recent
statements by the Chinese government have indicated an intent to exert more oversight and control over offerings that are conducted overseas
and/or foreign investments in China-based issuers.
Recent
statements by the Chinese government have indicated an intent to exert more oversight and control over offerings that are conducted overseas
and/or foreign investments in China based issuers. PRC has recently promulgated new rules that require companies collecting or holding
large amounts of data to undergo a cybersecurity review prior to listing in foreign countries, a move that will significantly tighten
oversight over China-based internet giants. The Measures for Cybersecurity Review (2021 version) was promulgated on December 28, 2021
and became effective on February 15, 2022. These measures specify that any "online platform operators" controlling the personal
information of more than one million users which seek to list on a foreign stock exchange are subject to prior cybersecurity review.
Our business belongs to the cross-border merchandise and tourism industry
in China, which does not involve the collection of user data, implicate cybersecurity, or involve any other type of restricted industry.
Based on the advice of PRC counsel, Beijing Dacheng Law Offices LLP (Haikou), and our understanding of currently applicable PRC laws and
regulations, we are not subject to the review or prior approval of the CAC or the CSRC. Uncertainties still exist, however, due to the
possibility that laws, regulations, or policies in the PRC could change rapidly in the future. Any future action by the PRC government
expanding the categories of industries and companies whose foreign securities offerings are subject to review by the CSRC or the CAC could
significantly limit or completely hinder our ability to offer or continue to offer securities to investors and could cause the value of
such securities to significantly decline or be worthless.
We
face challenges from the evolving regulatory environment regarding cybersecurity, information security, privacy and data protection,
and user attitude toward data privacy and protection. The Chinese government exerts substantial influence over the manner in which the
operating entities conduct their business activities, may intervene or influence such 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 such operations
and the value of shares of our Common Stock, significantly limit or completely hinder our ability to offer or continue to offer securities
to investors, and cause the value of our securities to significantly decline or be worthless. Many of these laws and regulations are
subject to change and uncertain interpretation, and any actual or alleged failure to comply with related laws and regulations regarding
cybersecurity, information security, data privacy, and protection could materially and adversely affect our business and results of operations.
Recently,
the Chinese government initiated a series of regulatory actions and made a number of public statements on the regulation of business
operations in China. This included, among other actions, the adoption of new measures to extend the scope of cybersecurity reviews, and
the expansion of efforts in anti-monopoly enforcement. Because these statements and regulatory actions are new, it is highly uncertain
(a) how soon legislative or administrative regulation-making bodies in China will respond to them, (b) what existing or new laws or regulations
will be modified or promulgated, if any, or (c) what impact such modified or new laws and regulations will have on the Company's
daily business operations or our ability to accept foreign investments and continue listing our Common Stock on an U.S. securities exchange.
In
particular, we face challenges from the evolving regulatory environment regarding cybersecurity, information security, privacy and data
protection, and users' attitude toward data privacy and protection. Many of these laws and regulations are subject to change and
uncertain interpretation. Any actual or alleged failure to comply with related laws and regulations regarding cybersecurity, information
security, data privacy and protection could materially and adversely affect our business and results of operations, and 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.
On June
10, 2021, the Standing Committee of the National People's Congress of China promulgated the Data Security Law, which took effect
in September 2021. The Data Security Law sets forth data security and privacy related compliance obligations of entities and individuals
carrying out data related activities. The Data Security Law also introduces a data classification and layered protection system based
on the importance of data and the degree of impact on national security, public interests or legitimate rights and interests of individuals
or organizations if such data is tampered with, destroyed, leaked or illegally acquired or used. In addition, the Data Security Law provides
a national security review procedure for data activities that may affect national security, and imposes export restrictions on certain
data and information.
16
On
December 28, 2021, the Cyberspace Administration of China (the "CAC"), together with several other governmental
authorities, jointly released the Cybersecurity Review Measures, which took effect on February 15, 2022. Pursuant to the Cybersecurity
Review Measures, the purchase of network products and services by an operator of critical information infrastructure or the data processing
activities of a network platform operator that affect or may affect national security will be subject to a cybersecurity review. In addition,
network platform operators with personal information of over one million users shall be subject to cybersecurity review before listing
in foreign countries. The competent governmental authorities may also initiate a cybersecurity review against the operators if the authorities
believe that the network product or service or data processing activities of such operators affect or may affect national security. The
cybersecurity review will evaluate, among others, the risk of critical information infrastructure, core data, important data, or the
risk of a large amount of personal information being influenced, controlled or maliciously used by foreign governments after going public,
and cyber information security risk. Given the Cybersecurity Review Measures came into effect recently, their interpretation, application
and enforcement are subject to substantial uncertainties. On November 14, 2021, the CAC published the Regulations for the Administration
of Network Data Security (Draft for Comments), or the Draft Administration Regulations on Cyber Data Security, which provide the circumstances
under which data processors shall apply for cybersecurity review, including, among others, when the data processors who process personal
information of at least one million users apply for a "foreign" listing. However, it provided no further explanation or interpretation
as to how to determine what constitutes "affecting national security". As of the date of this Annual Report, the Draft Administration
Regulations on Cyber Data Security have not been formally adopted. It is uncertain whether and when the final regulation will be issued
and take effect, how it will be enacted, interpreted and implemented, and whether or to what extent it will affect us.
On
August 20, 2021, the Standing Committee of the National People's Congress of China promulgated the Personal Information Protection
Law of the People's Republic of China, effective from November 1, 2021. The Personal Information Protection Law requires, among
others, that (i) the processing of personal information should have a clear and reasonable purpose which should be directly related to
the processing purpose, in a method that has the least impact on personal rights and interests, and (ii) the collection of personal information
should be limited to the minimum scope necessary to achieve the processing purpose to avoid the excessive collection of personal information.
Different types of personal information and personal information processing will be subject to various rules on consent, transfer, and
security. Entities handling personal information shall bear responsibility for their personal information handling activities, and adopt
necessary measures to safeguard the security of the personal information they handle. Otherwise, the entities handling personal information
could be ordered to correct, or suspend or terminate the provision of services, and face confiscation of illegal income, fines or other
penalties.
In
the meantime, the PRC regulatory authorities have also enhanced the supervision and regulation on cross-border data transfer. On July
7, 2022, the CAC promulgated the Security Assessment Measures for Cross-border Data Transfers with effect from September 1, 2022. These
measures require the data processor providing data overseas and falling under any of the following circumstances apply for the security
assessment of cross-border data transfer by the national cybersecurity authority through its local counterpart: (i) where the data processor
intends to provide important data overseas; (ii) where the critical information infrastructure operator and any data processor who has
processed personal information of more than 1,000,000 people intend to provide personal information overseas; (iii) where any data processor
who has provided personal information of 100,000 people or sensitive personal information of 10,000 people to overseas recipients accumulatively
since January 1 of the last year intends to provide personal information overseas; and (iv) other circumstances where the security assessment
of data cross-border transfer is required as prescribed by the CAC.
17
Given
that the above mentioned newly promulgated laws, regulations and policies were recently promulgated or issued, or have not yet been formally
promulgated or taken effect (as applicable), their enactment, interpretation, application and enforcement are subject to substantial
uncertainties. As the definitions for terms such as network platform operator and national security are broad, and the government will
likely retain significant discretion as to the interpretation and enforcement of the Cybersecurity Review Measures and any implementation
rules, we may be subject to related rules. We cannot preclude the possibility that the Cybersecurity Review Measures will subject us
to the cybersecurity review by the CAC in relation to our operations or require us to adjust our business practices, in which case our
business, financial condition and prospects may be materially and negatively affected. We have incurred, and will continue to incur,
significant expenses in an effort to comply with cybersecurity, privacy, data protection and information security related laws, regulations,
standards and protocols, especially as a result of such newly promulgated laws and regulations. As of the date of this Annual Report,
we have not been involved in any investigations, nor have we received any inquiry, notice, warning, or sanction by the CAC or related
PRC governmental authorities as a result of violation of any currently effective PRC laws or regulations with respect to personal information
or data requirements issued by the CAC up to date. However, as uncertainties remain regarding the interpretation and implementation of
these laws and regulations, despite our efforts to comply with applicable laws, regulations and policies relating to cybersecurity, privacy,
data protection and information security, we cannot assure you that our practices, offerings, services will meet all of the requirements
imposed on us by such laws, regulations or policies. Any failure or perceived failure to comply with applicable laws, regulations or
policies may result in inquiries or other proceedings being instituted against, or other lawsuits, decisions or sanctions being imposed
on us by governmental authorities, users, consumers or other parties, including but not limited to warnings, fines, directions for rectifications,
suspension of the related business and termination of our applications, as well as in negative publicity on us and damage to our reputation,
any of which could have a material adverse effect on our business, results of operations, financial condition and prospects. The above
mentioned newly promulgated laws, regulations, policies or relevant drafts may result in the publication of new laws, regulations and
policies to which we may be subject, though the timing, scope and applicability of such laws or regulations are currently unclear. Any
such laws, regulations or policies could negatively impact our business, results of operations and financial condition, which creates
the risk that any such actions 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.
Changes
in China's economic, political or social conditions or government policies could have a material adverse effect on our business
and operations.
Substantially
all of our assets and operations are located in the PRC. Accordingly, our business, financial condition, results of operations, and prospects
may be influenced to a significant degree by political, economic and social conditions in the PRC generally. The Chinese economy differs
from the economies of most developed countries in many respects, including the level of government involvement, development, growth rate,
control of foreign exchange and allocation of resources. Although the Chinese government has implemented measures emphasizing the utilization
of market forces for economic reform, the reduction of state ownership of productive assets, and the establishment of improved corporate
governance in business enterprises, a substantial portion of productive assets in the PRC is still owned by the government. In addition,
the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies. The Chinese
government also exercises significant control over the PRC's economic growth through allocating resources, controlling payment
of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or
companies. The PRC government also has implemented various measures to encourage foreign investment and sustainable economic growth and
to guide the allocation of financial and other resources. However, we cannot assure you that the PRC government will not repeal or alter
these measures or introduce new measures that will have a negative effect on us.
While
the Chinese economy has experienced significant growth over past decades, growth has been uneven, both geographically and among various
sectors of the economy. Any adverse changes in economic conditions in the PRC, in the policies of the Chinese government or in the laws
and regulations in the PRC could have a material adverse effect on the overall economic growth of the PRC. Such developments could adversely
affect our business and operating results, lead to a reduction in demand for our services and adversely affect our competitive position.
The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these
measures may benefit the overall Chinese economy, but may have a negative effect on us. For example, our financial condition and results
of operations may be adversely affected by government control over capital investments or changes in tax regulations. In addition, in
the past the Chinese government has implemented certain measures, including interest rate adjustment, to control the pace of economic
growth. These measures may cause decreased economic activity in the PRC, which may adversely affect our business and operating results.
18
A
severe or prolonged downturn in the Chinese or global economy could materially and adversely affect our business and financial condition.
The
global macroeconomic environment is facing challenges.
Although the Chinese economy has grown steadily
in the past decade,
the growth has been uneven, both geographically and among various sectors of the economy, and the rate of
growth has been slowing down in recent years and may materially decline in the future. T
here is
considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies adopted by the People's Bank
of China and financial authorities of some of the world's leading economies, including the United States and China. There have
been concerns over unrest and terrorist threats in the Middle East, Europe and Africa, which have resulted in volatility in oil and other
markets. There have also been concerns on the relationship among China and other Asian countries, which may result in or intensify potential
conflicts in relation to territorial disputes. The ongoing war between Russian and Ukraine has escalated global geopolitical tensions
when Russia launched a large-scale land invasion into Ukraine in February 2022. Economic conditions in China are sensitive to global
economic conditions, as well as changes in domestic economic and political policies and the expected or perceived overall economic growth
rate in China. Any severe or prolonged slowdown in the global or Chinese economy may materially and adversely affect our business, results
of operations and financial condition.
We engage in cross border merchandise and tourism business and conduct substantially all
of our operations in China; therefore, any deterioration of the PRC economy, decrease in disposable income and fear of a recession may
lead to reductions of customers' demand and their spending on fashion products with us. Any severe or prolonged slowdown in the
global or PRC economy may materially and adversely affect our business, results of operations and financial condition.
Uncertainties
with respect to the PRC legal system could adversely affect us.
The
PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions under the civil
law system may be cited for reference but have limited precedential value. In 1979, the PRC government began to promulgate a comprehensive
system of laws and regulations governing economic matters generally. The overall effect of legislation over the past three decades has
significantly enhanced the protections afforded to various forms of foreign investments in the PRC. However, the PRC has not developed
a fully integrated legal system, and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities
in the PRC. In particular, the interpretation and enforcement of these laws and regulations involve uncertainties. Since PRC administrative
and court authorities have significant discretion in interpreting and implementing statutory provisions and contractual terms, it may
be difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy. These uncertainties
may affect our judgment on the relevance of legal requirements and our ability to enforce our contractual rights or tort claims. In addition,
these regulatory uncertainties may be exploited through unmerited or frivolous legal actions or threats in attempts to extract payments
or benefits from us.
Furthermore,
the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or
at all and may have a retroactive effect. As a result, we may not be aware of our violation of any of these policies and rules until
sometime after the violation. In addition, any administrative and court proceedings in the PRC may be protracted, resulting in substantial
costs and the diversion of resources and management attention.
PRC
regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident beneficial
owners or our PRC subsidiary to liability or penalties, limit our ability to inject capital into our PRC subsidiary, limit our PRC subsidiary'
ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us.
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) to register with SAFE or its local branches in connection with their
direct or indirect offshore investment activities. SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be
applicable to any offshore acquisitions that we make in the future.
19
Under
SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments
in offshore special purpose vehicles, or SPVs, will be required to register such investments with SAFE or its local branches. In addition,
any PRC resident who is a direct or indirect shareholder of an SPV is required to update its filed registration with the local branch
of SAFE with respect to that SPV, to reflect any material change. Moreover, any subsidiary of such SPV in China is required to urge the
PRC resident shareholders to update their registration with the local branch of SAFE. If any PRC shareholder of such SPV fails to make
the required registration or to update the previously filed registration, the subsidiary of such SPV in China may be prohibited from
distributing its profits or the proceeds from any capital reduction, share transfer or liquidation to the SPV, and the SPV may also be
prohibited from making additional capital contributions into its subsidiary in China. On February 13, 2015, the SAFE promulgated a Notice
on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or SAFE Notice 13, which became effective
on June 1, 2015. Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct 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.
Some
of our shareholders that we are aware of are subject to SAFE regulations, but we may not be aware of the identities of all of our beneficial
owners who are PRC residents. We do not have control over our beneficial owners and there can be no assurance that all of our PRC-resident
beneficial owners will comply with SAFE Circular 37 and subsequent implementation rules, and there is no assurance that the registration
under SAFE Circular 37 and any amendment will be completed in a timely manner, or will be completed at all. Any failure or inability
by such shareholders to comply with SAFE regulations may subject us to fines or legal sanctions, such as restrictions on our cross-border
investment activities or our PRC subsidiary's ability to distribute dividends to, or obtain foreign exchange-denominated loans
from, our company or prevent us from making distributions or paying dividends. As a result, our business operations and our ability to
make distributions to you could be materially and adversely affected.
U.S.
regulatory bodies may be limited in their ability to conduct investigations or inspections of our operations in China.
Any
disclosure of documents or information located in China by foreign agencies may be subject to jurisdiction constraints and must comply
with China's state secrecy laws, which broadly define the scope of "state secrets" to include matters involving economic
interests and technologies. There is no guarantee that requests from U.S. federal or state regulators or agencies to investigate or inspect
our operations will be honored by us, by entities who provide services to us or with whom we associate, without violating PRC legal requirements,
especially as those entities are located in China. Furthermore, under the current PRC laws, an on-site inspection of our facilities by
any of these regulators may be limited or prohibited.
Changes
in China's economic, political or social conditions or government policies could have a material adverse effect on our business
and operations.
Substantially
all of our operations are located in the PRC. Accordingly, our business, financial condition, results of operations and prospects may
be influenced to a significant degree by political, economic and social conditions in the PRC generally. The Chinese economy differs
from the economies of most developed countries in many respects, including the level of government involvement, development, growth rate,
control of foreign exchange and allocation of resources. Although the Chinese government has implemented measures emphasizing the utilization
of market forces for economic reform, the reduction of state ownership of productive assets, and the establishment of improved corporate
governance in business enterprises, a substantial portion of productive assets in the PRC is still owned by the government. In addition,
the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies. The Chinese
government also exercises significant control over the PRC's economic growth through allocating resources, controlling payment
of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or
companies.
While
the Chinese economy has experienced significant growth over past decades, growth has been uneven, both geographically and among various
sectors of the economy. Any adverse changes in economic conditions in the PRC, in the policies of the Chinese government or in the laws
and regulations in the PRC could have a material adverse effect on the overall economic growth of the PRC. Such developments could adversely
affect our business and operating results, lead to a reduction in demand for our services and adversely affect our competitive position.
The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these
measures may benefit the overall Chinese economy, but may have a negative effect on us. For example, our financial condition and results
of operations may be adversely affected by government control over capital investments or changes in tax regulations. In addition, in
the past the Chinese government has implemented certain measures, including interest rate adjustment, to control the pace of economic
growth. These measures may cause decreased economic activity in the PRC, which may adversely affect our business and operating results.
20
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 its implementing rules that became effective in September 2008 and
was amended in July 2013, 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 effect 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.
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.
China's
economic, political and social conditions, as well as changes in any government policies, laws and regulations, could have a material
adverse effect on our business.
Substantially
all of our operations are located in China and substantially of our net revenues are derived from customers where the contracting entity
is located in China. Accordingly, our business, financial condition, results of operations, prospects and certain transactions we may
undertake may be subject, to a significant extent, to economic, political and legal developments in China. China's economy differs
from the economies of most developed countries in many respects, including the amount of government involvement, level of development,
growth rate, control of foreign exchange and allocation of resources. Although China's economy has been transitioning from a planned
economy to a more market-oriented economy since the late 1970s, 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 allocating resources, controlling the incurrence and payment of foreign currency-denominated obligations, setting monetary
policy and providing preferential treatment to particular industries or companies. Changes in any of these policies, laws and regulations
could adversely affect the economy in China and could have a material adverse effect on our business.
The
PRC government has implemented various measures to encourage foreign investment and sustainable economic growth and to guide the allocation
of financial and other resources. However, we cannot assure you that the PRC government will not repeal or alter these measures or introduce
new measures that will have a negative effect on us. China's social and political conditions may change and become unstable. Any
sudden changes to China's political system or the occurrence of widespread social unrest could have a material adverse effect on
our business and results of operations.
Uncertainties
with respect to the PRC legal system could adversely affect us.
Our
operating subsidiaries are incorporated under and governed by the laws of the PRC. The PRC legal system is a civil law system based on
written statutes. Unlike the common law system, prior court decisions under the civil law system may be cited for reference but have
limited precedential value. In 1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing
economic matters generally. The overall effect of legislation over the past three decades has significantly enhanced the protections
afforded to various forms of foreign investments in the PRC. However, the PRC has not developed a fully integrated legal system, and
recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in the PRC. In particular, the interpretation
and enforcement of these laws and regulations involve uncertainties. Since PRC administrative and court authorities have significant
discretion in interpreting and implementing statutory provisions and contractual terms, it may be difficult to evaluate the outcome of
administrative and court proceedings and the level of legal protection we enjoy. These uncertainties may affect our judgment on the relevance
of legal requirements and our ability to enforce our contractual rights or tort claims. In addition, these regulatory uncertainties may
be exploited through unmerited or frivolous legal actions or threats in attempts to extract payments or benefits from us. Furthermore,
the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or
at all and may have a retroactive effect. As a result, we may not be aware of our violation of any of these policies and rules until
sometime after the violation. In addition, any administrative and court proceedings in the PRC may be protracted, resulting in substantial
costs and diversion of resources and management attention.
21
Furthermore,
intellectual property rights and confidentiality protections in China may not be as effective as in the United States or other countries.
In addition, we cannot predict the effect of future developments in the PRC legal system, including the promulgation of new laws, changes
to existing laws or the interpretation or enforcement thereof, or the preemption of local regulations by national laws. These uncertainties
could limit the legal protections available to us and other foreign investors, including you. In addition, any litigation in China may
be protracted and result in substantial costs and diversion of our resources and management attention.
You
may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions in China against us
or our management named in the report based on foreign laws.
We
conduct substantially all of our operations in China, and substantially all of our assets are located in China. In addition, our current
officers reside within China and are PRC nationals. As a result, it may be difficult for our shareholders to effect service of process
upon us or those persons inside the PRC. In addition, the PRC does not have treaties providing for the reciprocal recognition and enforcement
of judgments of courts with the Marshall Islands and many other countries and regions. Therefore, recognition and enforcement in the
PRC of judgments of a court in any of these non-PRC jurisdictions in relation to any matter not subject to a binding arbitration provision
may be difficult or impossible.
We
may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may
have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our
ability to conduct our business.
We
rely principally on dividends and other distributions on equity from our PRC subsidiaries for our cash requirements, including for services
of any debt we may incur.
Our
PRC subsidiaries' ability to distribute dividends is based upon their distributable earnings. Current PRC regulations permit our
PRC subsidiaries to pay dividends to their respective shareholders only out of their accumulated profits, if any, determined in accordance
with PRC accounting standards and regulations. In addition, each of our PRC subsidiaries, as a Foreign Invested Enterprise, or FIE, are
required to draw 10% of its after-tax profits each year, if any, to fund a common reserve, which may stop drawing its after-tax profits
if the aggregate balance of the common reserve has already accounted for over 50 percent of its registered capital. These reserves are
not distributable as cash dividends. If our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing
the debt may restrict their ability to pay dividends or make other payments to us. Any limitation on the ability of our PRC subsidiaries
to distribute dividends or other payments to their respective shareholders could materially and adversely limit our ability to grow,
make investments or acquisitions that could be beneficial to our business, pay dividends or otherwise fund and conduct our business.
In
addition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable
to dividends payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties
or arrangements between the PRC central government and governments of other countries or regions where the non-PRC resident enterprises
are incorporated.
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 the proceeds of future securities offerings 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. According to the relevant PRC regulations on foreign-invested enterprises,
or FIEs, in China, capital contributions to our PRC subsidiaries are subject to the approval of or filing with the Ministry of Commerce,
or MOFCOM or its local branches and registration with a local bank authorized by the State Administration of Foreign Exchange, or SAFE.
In addition, (i) a foreign loan of less one year duration procured by our PRC subsidiaries is required to be registered with SAFE or
its local branches and (ii) a foreign loan of one year duration or more procured by our PRC subsidiaries is required to be applied to
the NDRC in advance for undergoing recordation registration formalities. Any medium or long-term loan to be provided by us to our PRC
operating subsidiaries, must be registered with the NDRC and the SAFE or its local branches. We may not be able to complete such registrations
on a timely basis, with respect to future capital contributions or foreign loans by us to our PRC Subsidiary. If we fail to complete
such registrations, our ability to use the proceeds of any future securities offerings 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.
22
On
March 30, 2015, the SAFE promulgated the Circular on Reforming the Management Approach Regarding the Foreign Exchange Capital Settlement
of Foreign-Invested Enterprises, or SAFE Circular 19, which took effect as of June 1, 2015. SAFE 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 net proceeds of future securities offerings to fund our PRC operating subsidiary, 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.
On October 23, 2019, SAFE promulgated the Circular of the State Administration of
Foreign Exchange on Further Promoting the Facilitation of Cross-border Trade and Investment, or SAFE Circular 28, which permits non-investment
FIEs to use their capital funds to make equity investments in China, with genuine investment projects and in compliance with effective
foreign investment restrictions and other applicable laws. However, uncertainties still exist in relation to its interpretation and implementation.
Fluctuations
in exchange rates could have a material and adverse effect on our results of operations and the value of your investment.
The
value of the Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political
and economic conditions and the foreign exchange policy adopted by the PRC government. It is difficult to predict how long such appreciation
of RMB against the U.S. dollar may last and when and how the relationship between the RMB and the U.S. dollar may change again. All of
our revenues and substantially all of our costs are denominated in Renminbi. We rely on dividends paid by our operating subsidiaries
in China for our cash needs. Any significant revaluation of Renminbi may materially and adversely affect our results of operations and
financial position reported in Renminbi when translated into U.S. dollars, and the value of, and any dividends payable on, the common
stock in U.S. dollars. To the extent that we need to convert U.S. dollars into Renminbi for our operations, appreciation of the Renminbi
against the U.S. dollar would have an adverse effect on the Renminbi amount we would receive. Conversely, if we decide to convert our
Renminbi into U.S. dollars for the purpose of making payments for dividends on our Common Stock or for other business purposes, appreciation
of the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount.
23
Governmental
control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.
The
PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of
currency out of China. We receive substantially all of our revenues in Renminbi. Under our current corporate structure, we primarily
rely on dividend payments from our PRC subsidiaries to fund any cash and financing requirements we may have. Under existing PRC foreign
exchange regulations, payments of current account items, including profit distributions, interest payments and trade and service-related
foreign exchange transactions, can be made in foreign currencies without prior approval of SAFE by complying with certain procedural
requirements. Specifically, under the existing exchange restrictions, without prior approval of SAFE, cash generated from the operations
of our PRC subsidiaries in China may be used to pay dividends to our company. However, approval from or registration with appropriate
government authorities is required, in principle, where RMB is to be converted into foreign currency and remitted out of China to pay
capital expenses such as the repayment of loans denominated in foreign currencies. As a result, we need to obtain SAFE approval to use
cash generated from the operations of our PRC subsidiaries to pay off their respective debt in a currency other than Renminbi owed to
entities outside China, or to make other capital expenditure payments outside China in a currency other than Renminbi. The PRC government
may at its discretion restrict access to foreign currencies for current account transactions in the future. If the foreign exchange control
system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends
in foreign currencies to our shareholders, including holders of the Common stock.
Certain
PRC regulations may make it more difficult for us to pursue growth through acquisitions.
Among
other things, the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors ("M&A Rules")
and Anti-Monopoly Law of the People's Republic of China promulgated by the Standing Committee of the NPC which became effective
in 2008 ("Anti-Monopoly Law"), established additional procedures and requirements that could make merger and acquisition
activities by foreign investors more time-consuming and complex. Such regulation requires, among other things, that State Administration
for Market Regulation (SAMR) be notified in advance of any change-of-control transaction in which a foreign investor acquires control
of a PRC domestic enterprise or a foreign company with substantial PRC operations, if certain thresholds under the Provisions of the
State Council on the Standard for Declaration of Concentration of Business Operators, issued by the State Council in 2008, are triggered.
Moreover, the Anti-Monopoly Law requires that transactions which involve the national security, the examination on the national security
shall also be conducted according to the relevant provisions of the State. In addition, PRC Measures for the Security Review of Foreign
Investment which became effective in January 2021 require acquisitions by foreign investors of PRC companies engaged in military-related
or certain other industries that are crucial to national security be subject to security review before consummation of any such acquisition.
We may pursue potential strategic acquisitions that are complementary to our business and operations.
Complying
with the requirements of these regulations to complete such transactions could be time-consuming, and any required approval processes,
including obtaining approval or clearance from the MOFCOM, may delay or inhibit our ability to complete such transactions, which could
affect our ability to expand our business or maintain our market share.
PRC
regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident beneficial
owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC
ability of subsidiaries to increase their registered capital or distribute profits to us, or may otherwise adversely affect us.
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, to replace the Notice on Relevant
Issues Concerning Foreign Exchange Administration for Domestic Residents' Financing and Roundtrip Investment Through Offshore Special
Purpose Vehicles, or SAFE Circular 75, which ceased to be effective upon the promulgation of SAFE Circular 37. SAFE Circular 37 requires
PRC residents (including PRC individuals and PRC corporate entities) to register with SAFE or its local branches in connection with their
direct or indirect offshore investment activities. SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be
applicable to any offshore acquisitions that we make in the future.
24
Under
SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect investments
in offshore special purpose vehicles, or SPVs, will be required to register such investments with SAFE or its local branches. In addition,
any PRC resident who is a direct or indirect shareholder of an SPV is required to update its filed registration with the local branch
of SAFE with respect to that SPV, to reflect any material change. Moreover, any subsidiary of such SPV in China is required to urge the
PRC resident shareholders to update their registration with the local branch of SAFE. If any PRC shareholder of such SPV fails to make
the required registration or to update the previously filed registration, the subsidiary of such SPV in China may be prohibited from
distributing its profits or the proceeds from any capital reduction, share transfer or liquidation to the SPV, and the SPV may also be
prohibited from making additional capital contributions into its subsidiary in China. On February 13, 2015, the SAFE promulgated a Notice
on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or SAFE Notice 13, which became effective
on June 1, 2015. Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct 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.
Some
of our shareholders that we are aware of are subject to SAFE regulations, and we expect all of these shareholders will have completed
all necessary registrations with the local SAFE branch or qualified banks as required by SAFE Circular 37. We cannot assure you, however,
that all of these shareholders may continue to make required filings or updates in a timely manner, or at all. We can provide no assurance
that we are or will in the future continue to be informed of identities of all PRC residents holding direct or indirect interest in our
company. Any failure or inability by such shareholders to comply with SAFE regulations may subject us to fines or legal sanctions, such
as restrictions on our cross-border investment activities or our PRC subsidiaries' ability to distribute dividends to, or obtain
foreign exchange-denominated loans from, our company or prevent us from making distributions or paying dividends. As a result, our business
operations and our ability to make distributions to you could be materially and adversely affected.
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. For example, we may be subject to a more stringent review and approval
process with respect to our foreign exchange activities, such as remittance of dividends and foreign-currency-denominated borrowings,
which may adversely affect our financial condition and results of operations. In addition, if we decide to acquire a PRC domestic company,
we cannot assure you that we or the owners of such company, as the case may be, will be able to obtain the necessary approvals or complete
the necessary filings and registrations required by the foreign exchange regulations. This may restrict our ability to implement our
acquisition strategy and could adversely affect our business and prospects.
As
of the date of this disclosure, The PRC residents have applied for foreign exchange registration under the SAFE Circular 37 and other
related rules. Although they are in the process of making foreign exchange registration, they may still face with the above said possible
fines in accordance with the PRC Laws.
Failure
to make adequate contributions to various employee benefit plans and withhold individual income tax on employees' salaries as required
by PRC regulations may subject us to penalties.
Companies
operating in China are required to participate in various government-mandated employee benefit contribution plans, including certain
social insurance, housing funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain
percentages of salaries, including bonuses and allowances, of our employees up to a maximum amount specified by the local government
from time to time at locations where we operate our businesses. The requirement of employee benefit contribution plans has not been implemented
consistently by the local governments in China given the different levels of economic development in different locations. Companies operating
in China are also required to withhold individual income tax on employees' salaries based on the actual salary of each employee
upon payment. We may be subject to late fees and fines in relation to the underpaid employee benefits and under-withheld individual income
tax, our financial condition and results of operations may be adversely affected.
25
Any
failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the PRC
plan participants or us to fines and other legal or administrative sanctions.
Pursuant
to the Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan
of Overseas Publicly-Listed Company, promulgated by SAFE in 2012, or SAFE Notices No. 7, PRC citizens and non-PRC citizens who reside
in China for a continuous period of no less than one year who participate in any stock incentive plan of an overseas publicly listed
company offered to the director, supervisor, senior management and other employees of, and any individual who has labor relationship
with its domestic affiliated entities are required to register with SAFE through a domestic qualified agent, which could be a PRC subsidiary
of such overseas listed company, and complete certain other procedures. In addition, an overseas entrusted institution must be retained
to handle matters in connection with the exercise or sale of stock options and the purchase or sale of shares and interests. We and our
directors, executive officers and other employees who are PRC citizens or who reside in the PRC for a continuous period of no less than
one year and who have been granted stock options became subject to these regulations when our company became an overseas listed company
upon the completion of our recent initial public offering. Failure to complete the SAFE registrations for our employee incentive plans
after our listing may subject them to fines and legal sanctions, and may also limit our ability to contribute additional capital into
our PRC subsidiaries and limit our PRC subsidiaries' ability to distribute dividends to us. We also face regulatory uncertainties
that could restrict our ability to adopt additional incentive plans for our directors, executive officers and employees under PRC law.
In
addition, the State Administration of Taxation, or SAT, has issued certain circulars concerning employee stock options and restricted
shares. Under these circulars, our employees working in China who exercise stock options or are granted restricted shares will be subject
to PRC individual income tax. Our PRC subsidiaries have obligations to file documents related to employee stock options or restricted
shares with relevant tax authorities and to withhold individual income taxes of those employees who exercise their share options or are
granted with restricted shares. If our employees fail to pay or we fail to withhold their income taxes according to relevant laws and
regulations, we may face sanctions imposed by the tax authorities or other PRC governmental authorities.
U.S.
regulatory bodies may be limited in their ability to conduct investigations or inspections of our operations in China.
Any
disclosure of documents or information located in China by foreign agencies may be subject to jurisdiction constraints and must comply
with China's state secrecy laws, which broadly define the scope of "state secrets" to include matters involving economic
interests and technologies. There is no guarantee that requests from U.S. federal or state regulators or agencies to investigate or inspect
our operations will be honored by us, by entities who provide services to us or with whom we associate, without violating PRC legal requirements,
especially as those entities are located in China. Furthermore, under the current PRC laws, an on-site inspection of our facilities by
any of these regulators may be limited or prohibited.
If
we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences
to us and our non-PRC shareholders.
Under
the PRC Enterprise Income Tax Law and its implementation rules, an enterprise established outside of the PRC with 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 State Administration of Taxation, or SAT, issued a circular, known as SAT Circular 82, which provides
certain specific criteria for determining whether the "de facto management body" of a PRC-controlled enterprise that is incorporated
offshore is located in China. Although this circular 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.
26
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.
In addition, non-resident enterprise shareholders (including the common stockholders) may be subject to PRC tax on gains realized on
the sale or other disposition of the common stock, 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 (including the common stockholders) and any gain realized
on the transfer of the common stock 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 common stock.
We
face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.
On
February 3, 2015, the SAT issued the Public Notice Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties
by Non-Tax Resident Enterprises, or SAT Bulletin 7. SAT Bulletin 7 extends its tax jurisdiction to transactions involving the transfer
of taxable assets through offshore transfer of a foreign intermediate holding company. In addition, SAT Bulletin 7 has introduced safe
harbors for internal group restructurings and the purchase and sale of equity through a public securities market. SAT Bulletin 7 also
brings challenges to both foreign transferor and transferee (or other person who is obligated to pay for the transfer) of taxable assets,
as such persons need to determine whether their transactions are subject to these rules and whether any withholding obligation applies.
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, or SAT Bulletin 37, which came into effect on December 1, 2017. The SAT Bulletin 37 further clarifies
the practice and procedure of the withholding of non-resident enterprise income tax.
Where
a non-resident enterprise transfers taxable assets indirectly by disposing of the equity interests of an overseas holding company, which
is an "Indirect Transfer", the non-resident enterprise as either transferor or transferee, or the PRC entity that directly
owns the taxable assets, may report such Indirect Transfer to the relevant tax authority. Using a "substance over form" principle,
the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was
established for the purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived from such Indirect Transfer may be
subject to PRC enterprise income tax, and the transferee or other person who pays for the transfer is obligated to withhold the applicable
taxes currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise. Both the transferor and the transferee
may be subject to penalties under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes.
We
face uncertainties as to the reporting and other implications of certain past and future transactions where PRC taxable assets are involved,
such as offshore restructuring, sale of the shares in our offshore subsidiaries and investments. Our company may be subject to filing
obligations or taxed if our company is transferor in such transactions, and may be subject to withholding obligations if our company
is transferee in such transactions, under SAT Bulletin 7 and/or SAT Bulletin 37. For transfer of shares in our company by investors who
are non-PRC resident enterprises, our PRC subsidiaries may be requested to assist in the filing under SAT Bulletin 7 and/or SAT Bulletin
37. As a result, we may be required to expend valuable resources to comply with SAT Bulletin 7 and/or SAT Bulletin 37 or to request the
relevant transferors from whom we purchase taxable assets to comply with these circulars, or to establish that our company should not
be taxed under these circulars, which may have a material adverse effect on our financial condition and results of operations.
You
may have difficulty enforcing judgments against us.
Most
of our assets are located outside of the United States and most of our current operations are conducted in the PRC. In addition, most
of our directors and officers are nationals and residents of countries other than the United States. A substantial portion of the assets
of these persons is located outside the United States. As a result, it may be difficult for you to effect service of process within the
United States upon these persons. It may also be difficult for you to enforce in U.S. courts judgments on the civil liability provisions
of the U.S. federal securities laws against us and our officers and directors, most of whom are not residents in the United States and
the substantial majority of whose assets are located outside of the United States. In addition, there is uncertainty as to whether the
courts of the PRC would recognize or enforce judgments of U.S. courts. Courts in China may recognize and enforce foreign judgments in
accordance with the requirements of the PRC Civil Procedures Law based on treaties between China and the country where the judgment is
made or on reciprocity between jurisdictions. China does not have any treaties or other arrangements that provide for the reciprocal
recognition and enforcement of foreign judgments with the United States. In addition, according to the PRC Civil Procedures Law, courts
in the PRC will not enforce a foreign judgment against us or our directors and officers if they decide that the judgment violates basic
principles of PRC law or national sovereignty, security, or the public interest. So, it is uncertain whether a PRC court would enforce
a judgment rendered by a court in the United States.
27
We
may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption laws, and any determination that we
violated these laws could have a material adverse effect on our business.
We
are subject to the Foreign Corrupt Practice Act, or FCPA, and other laws that prohibit improper payments or offers of payments to foreign
governments and their officials and political parties by U.S. persons and issuers as defined by the statute, for the purpose of obtaining
or retaining business. We have operations, agreements with third parties, and make most of our sales in China. The PRC also strictly
prohibits bribery of government officials. Our activities in China create the risk of unauthorized payments or offers of payments by
the employees, consultants, sales agents, or distributors of our Company, even though they may not always be subject to our control.
It is our policy to implement safeguards to discourage these practices by our employees. However, our existing safeguards and any future
improvements may prove to be less than effective, and the employees, consultants, sales agents, or distributors of our Company may engage
in conduct for which we might be held responsible. Violations of the FCPA or Chinese anti-corruption laws may result in severe criminal
or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business, operating results and financial
condition. In addition, the U.S. government may seek to hold our Company liable for successor liability FCPA violations committed by
companies in which we invest or that we acquire.
If
we become directly subject to the recent scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, we may have
to expend significant resources to investigate and resolve the matter which could harm our business operations, stock price and reputation,
and could result in a loss of your investment in our stock, especially if such matter cannot be addressed and resolved favorably.
In
the past few years, U.S. publicly traded companies that have substantially all of their operations in China, particularly companies like
us have been the subject of intense scrutiny, criticism, and negative publicity by investors, financial commentators, and regulatory
agencies, such as the SEC. Much of the scrutiny, criticism, and negative publicity has centered around financial and accounting irregularities
and mistakes, lack of effective internal controls over financial accounting, inadequate corporate governance policies or lack of adherence
thereto and, in many cases, allegations of fraud. As a result of the scrutiny, criticism, and negative publicity, the publicly traded
stocks of many U.S. listed Chinese companies have sharply decreased in value and, in some cases, have become virtually worthless. Many
of these companies are now subject to shareholder lawsuits and SEC enforcement actions, and are conducting internal and external investigations
into the allegations. It is not clear the effect of this sector-wide scrutiny, criticism, and negative publicity will have on our Company,
our business, and our stock price. If we become the subject of any unfavorable allegations, whether such allegations are proven to be
true or untrue, we will have to expend significant resources to investigate such allegations defending our Company. This situation will
be costly, time consuming, and distract our management from growing our company.
The
disclosures in our reports and other filings with the SEC and our other public pronouncements will not be subject to the scrutiny of
any regulatory bodies in the PRC. Accordingly, our public disclosure should be reviewed in light of the fact that no governmental agency
that is located in China where all of our operations and business are located have conducted any due diligence on our operations or reviewed
or cleared any of our disclosure.
Unlike
public reporting companies whose operations are located primarily in the United States, however, all of our operations will be located
in China. Since substantially all of our operations and business takes place in China, it may be more difficult for the Staff of the
SEC to overcome the geographic and cultural obstacles that are present when reviewing our disclosure. These same obstacles are not present
for similar companies whose operations or business take place entirely or primarily in the United States. Furthermore, our SEC reports
and other disclosure and public pronouncements are not subject to the review or scrutiny of any PRC regulatory authority. For example,
the disclosure in our SEC reports and other filings are not subject to the review of the CSRC, a PRC regulator that is tasked with oversight
of the capital markets in China. Accordingly, you should review our SEC reports, filings and our other public pronouncements with the
understanding that no local regulator has done any due diligence on our company and with the understanding that none of our SEC reports,
other filings or any of our other public pronouncements has been reviewed or otherwise been scrutinized by any local regulator.
28
Our
holding company structure may limit the payment of dividends.
We have no direct business operations other than
the ownership of our subsidiaries. While we have no current intention of paying dividends, should we decide in the future to do so, as
a holding company, our ability to pay dividends and meet other obligations depend upon the receipts of dividends or other payments from
our operating subsidiaries, other holdings, and investments. In addition, our operating subsidiaries, from time to time, may 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 as discussed below. If
future dividends are paid in RMB, fluctuations in the exchange rate for conversion of RMB into U.S. dollars may reduce the amount received
by the U.S. stockholders upon conversion of dividend payments into U.S. dollars.
Chinese
regulations currently permit the payment of dividends only out of accumulated profits as determined in accordance with Chinese accounting
standards and regulations. Our subsidiaries in China are also required to set aside a portion of their after tax profits to fund certain
reserve funds according to the Chinese accounting standards and regulations. Currently, our subsidiaries in China are the only sources
of revenues or investment holdings for the payment of dividends. If they do not accumulate sufficient profits under Chinese accounting
standards and regulations to satisfy certain reserve funds as required by the Chinese accounting standards, we will be unable to pay
any dividends.
After-tax
profits/losses with respect to the payment of dividends from accumulated profits and the annual appropriation of after-tax profits as
calculated pursuant to the Chinese accounting standards and regulations do not result in significant differences as compared to after-tax
earnings as presented in our financial statements. However, there are certain differences between PRC accounting standards and regulations
and IFRS, arising from different treatment of items such as amortization of intangible assets and change in fair value of contingent
consideration rising from business combinations.
The
custodians or authorized users of our controlling non-tangible assets, including chops and seals, may fail to fulfill their
responsibilities, or misappropriate or misuse these assets.
Under
PRC law, legal documents for corporate transactions, including agreements and contracts, are executed using the chop or seal of the signing
entity or with the signature of a legal representative whose designation is registered and filed with relevant PRC administration for
market regulation. A company chop or seal may serve as the legal representation of the company towards third parties even when unaccompanied
by a signature.
In
order to secure the use of our chops and seals, we have established internal control procedures and rules for using these chops and seals.
In any event that the chops and seals are intended to be used, the responsible personnel will submit the application, which will then
be verified and approved by authorized employees in accordance with our internal control procedures and rules. In addition, in order
to maintain the physical security of our chops, we generally have them stored in secured locations accessible only to authorized employees.
Although we monitor such authorized employees, the procedures may not be sufficient to prevent all instances of abuse or negligence.
There is a risk that our employees could abuse their authority, for example, by entering into a contract not approved by us or seeking
to gain control of one of our subsidiaries. If any employee obtains, misuses or misappropriates our chops and seals or other controlling non-tangible assets
for whatever reason, 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 and divert management from our operations.
Regulation
and censorship of information disseminated over the internet in China may adversely affect our business and reputation and subject us
to liability for information displayed on our website.
The
PRC government has adopted regulations governing internet access and the distribution of news and other information over the internet.
Under these regulations, internet content providers and internet publishers are prohibited from posting or displaying over the internet
content that, among other things, violates PRC laws and regulations, impairs the national dignity of China, or is reactionary, obscene,
superstitious, fraudulent or defamatory. Failure to comply with these requirements may result in the revocation of licenses to provide
internet content and other licenses, and the closure of the concerned websites. The website operator may also be held liable for such
censored information displayed on or linked to the websites. If our self-owned online store or content is found to be in violation of
any such requirements, we may be penalized by relevant authorities, and our operations or reputation could be adversely affected.
29
Potential
Chinese governmental and regulatory interference could significantly limit or completely hinder our ability to offer or continue to offer
securities to investors and cause the value of such securities to significantly decline or be worthless.
On
July 6, 2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council
jointly issued the "Opinions on Severely Cracking Down on Illegal Securities Activities According to Law," or the Opinions.
The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the
supervision over overseas listings by Chinese companies. Effective measures, such as promoting the construction of relevant regulatory
systems will be taken to deal with the risks and incidents of China-concept overseas listed companies, and cybersecurity and data privacy
protection requirements and similar matters.
On
December 24, 2021, the CSRC released the Administrative Provisions of the State Council Regarding the Overseas Issuance and Listing of
Securities by Domestic Enterprises (Draft for Comments), or the Administration Provisions, and the Measures for the Overseas Issuance
of Securities and Listing Record-Filings by Domestic Enterprises (Draft for Comments), or collectively the Draft Rules Regarding Overseas
Listing, which were published for public comments only with the comment period expired on January 23, 2022. The Draft Rules Regarding
Overseas Listing lay out the filing regulation arrangement for both direct and indirect overseas listing, and clarify the determination
criteria for indirect overseas listing in overseas market.
The
Draft Rules Regarding Overseas Listing stipulate that the Chinese-based companies, or the issuer, shall fulfill the filing procedures
within three working days after the issuer makes an application for initial public offering and listing in an overseas market. The required
filing materials for an initial public offering and listing should include at least the following: record-filing report and related undertakings;
regulatory opinions, record-filing, approval and other documents issued by competent regulatory authorities of relevant industries (if
applicable); and security assessment opinion issued by relevant regulatory authorities (if applicable); PRC legal opinion; and prospectus.
In
addition, an overseas offering and listing is prohibited under any of the following circumstances: (1) if the intended securities offering
and listing is specifically prohibited by national laws and regulations and relevant provisions; (2) if the intended securities offering
and listing may constitute a threat to or endangers national security as reviewed and determined by competent authorities under the State
Council in accordance with law; (3) if there are material ownership disputes over the equity, major assets, and core technology, etc.
of the issuer; (4) if, in the past three years, the domestic enterprise or its controlling shareholders or actual controllers have committed
corruption, bribery, embezzlement, misappropriation of property, or other criminal offenses disruptive to the order of the socialist
market economy, or are currently under judicial investigation for suspicion of criminal offenses, or are under investigation for suspicion
of major violations; (5) if, in past three years, directors, supervisors, or senior executives have been subject to administrative punishments
for severe violations, or are currently under judicial investigation for suspicion of criminal offenses, or are under investigation for
suspicion of major violations; (6) other circumstances as prescribed by the State Council. The Administration Provisions defines the
legal liabilities of breaches such as failure in fulfilling filing obligations or fraudulent filing conducts, imposing a fine between
RMB 1 million and RMB 10 million, and in cases of severe violations, a parallel order to suspend relevant business or halt operation
for rectification, revoke relevant business permits or operational license.
On
February 17, 2023, the CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies,
or the Trial Measures, and five supporting guidelines, which came into effect on March 31, 2023. The Trial Measures and its supporting
guidelines, reiterate the basic principles of the Draft Rules Regarding Overseas Listing and impose substantially the same requirements
for the overseas securities offering and listing by domestic enterprises. Pursuant to the Trial Measures, domestic companies that seek
to offer or list securities overseas, both directly and indirectly, shall complete the filing procedures with the CSRC pursuant to the
requirements of the Trial Measures within three working days following its submission of initial public offerings or listing application.
If a domestic company fails to complete the required filing procedures or conceals any material fact or falsifies any major content in
its filing documents, such domestic company may be subject to administrative penalties, such as orders to rectify, warnings, fines, and
its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject
to administrative penalties, such as warnings and fines.
30
According
to the Notice on the Administrative Arrangements for the Filing of the Overseas Securities Offering and Listing by Domestic Companies
from the CSRC, or the CSRC Notice, which was promulgated on February 17, 2023 and became effective on the same day, the domestic companies
that have already been listed overseas before the effective date of the Trial Measures (i.e. March 31, 2023) shall be deemed as existing
issuers (the "Existing Issuers"). Existing Issuers are not required to complete the filing procedures immediately, and they
shall be required to file with the CSRC for any subsequent offerings. Further, according to the CSRC Notice, domestic companies obtained
approval from overseas regulatory authorities or securities exchanges (for example, the effectiveness of a registration statement for
offering and listing in the U.S. has been approved) for their indirect overseas offering and listing prior to March 31, 2023 but have
not yet completed their indirect overseas issuance and listing, are granted a six-month transition period from March 31, 2023 to September
30, 2023. Those issuers that complete their indirect overseas offering and listing within such six-month period are deemed as Existing
Issuers and are not required to file with the CSRC for their indirect overseas offerings and listings. Within such six-month transition
period, however, if such domestic companies fail to complete their indirect overseas issuance and listing, they shall complete the filing
procedures with the CSRC.
However,
since the Trial Measures were newly promulgated, their interpretation, application and enforcement remain unclear. If the filing procedure
with the CSRC under the Trial Measures is required for any subsequent offerings, listing or any other capital raising activities, which
may subject us to additional compliance requirements in the future, we cannot assure you that we will be able to get the clearance of
filing procedures under the Trial Measures on a timely basis, or at all. If we do not complete any required record-filing or if we incorrectly
conclude that record-filing is not required or if the CSRC or other regulatory agencies promulgate new rules, explanations or interpretations
requiring that we obtain their prior approvals or record-filing for any follow-on offering, we may be unable to obtain such approvals
and record-filing which could significantly limit or completely hinder our ability to offer or continue to offer securities to our investors.
Furthermore,
the PRC government authorities may strengthen oversight and control over offerings that are conducted overseas and/or foreign investment
in China-based issuers like us. Such actions taken by the PRC government authorities may intervene or influence our operations at any
time, which are beyond our control. Therefore, any such action may adversely affect our operations and significantly limit or hinder
our ability to offer or continue to offer securities and reduce the value of such securities.
As
of the date of this report, we and our PRC subsidiaries have not been involved in any investigations on cybersecurity review initiated
by the Cyber Administration of China or related governmental regulatory authorities, and have not received any requirements to obtain
permissions from any PRC authorities to issue our Ordinary Shares to foreign investors or were denied such permissions by any PRC authorities.
However, given the current PRC regulatory environment, it is uncertain when and whether we or our PRC subsidiaries, will be required
to obtain permission from the PRC government to list on U.S. exchanges in the future, and even when such permission is obtained, whether
it will be denied or rescinded.
We
have been closely monitoring regulatory developments in China regarding any necessary approvals from the CSRC or other PRC governmental
authorities required for overseas listings. As of the date of this report, except for the potential uncertainties disclosed above, we
have not received any inquiry, notice, warning, sanctions or regulatory objection from the CSRC or other PRC governmental authorities.
However, there remains significant uncertainty as to the enactment, interpretation and implementation of regulatory requirements related
to overseas securities offerings and other capital markets activities.
31
RISKS
RELATED TO OUR SECURITIES
The
Nasdaq Capital Market imposes listing standards on our Common Stock that may be difficult to fulfill, thereby leading to a possible delisting
of our Common Stock. We are currently facing such risk.
Our Common Stock is traded
and listed on the Nasdaq Capital Market under the symbol "JXJT." We are required to comply with all continued listing requirements,
including among other things, a minimum bid price of $1.00 per share of Common Stock (the "Minimum Bid Requirement"), minimum
shareholder' equity. certain major corporate transactions, the composition of our Board of Directors and committees thereof. The
failure to meet these Nasdaq Capital Market continued listing requirements may result in the delisting of our Common Stock from the
Nasdaq Capital Market, which could adversely affect the liquidity and market price thereof. On October 24, 2022, the Company received
its first letter (the "Notice") from the Listing Qualifications Department of The Nasdaq Stock Market LLC ("Nasdaq")
notifying the Company that, based upon the closing bid price of its common stock for the last 30 consecutive business days preceding the
Notice, the Company was not in compliance with the Minimum Bid Requirement. The Notice provided the Company a period of 180 calendar days
from the date of the Notice, or until April 24, 2023. While on April 26, 2023, the Company effected a 1-for-10 reverse stock split of
its outstanding shares of Common Stock (the "Reverse Stock Split") in order to regain compliance with the Minimum Bid Requirement,
however, the Company did not regain compliance with the Minimum Bid Requirements by April 24, 2023, as required by the Notice. On April
25, 2023, the Company received the determination letter from Nasdaq (the "Determination Letter") notifying it that, unless
the Company requested an appeal of that determination to a Nasdaq Hearings Panel, the Staff would schedule the Company's securities
for delisting from the Nasdaq Capital Market and would suspend trading of the Company's Common Stock at the opening of business
on May 4, 2023 due to the Company's failure to regain compliance with the Minimum Bid Requirement. On April 26, 2023, the Company
submitted a request for a hearing before the Nasdaq Hearings Panel to present its plan to regain compliance with the Minimum Bid Requirement.
On April 27, 2023, the Company received a letter from Nasdaq granting the appeal and scheduling the hearing for May 25, 2023. This hearing
request will stay the suspension of the Company's securities and the filing of Form 25-NSE pending the Nasdaq Hearings Panel's
decision.
As of the date of this
Annual Report, the Company believes that it regained compliance with the Minimum Bid Requirements, as its Common Stock has had a closing
bid price of over $1.00 for more than 10 consecutive business days. Upon the filing of this Annual Report, we will
submit
a request to the Hearing Panel to evaluate the Company's compliance with the Minimum Bid Requirement and other continued listing
requirements for trading on the Nasdaq Capital Market. However, there is no assurance that Nasdaq Qualification and the Hearing Panel
determine that as of the date of this Annual Report, the Company is in full compliance with all requirements.
We also cannot ensure
you that we will continue to comply with all requirements for continued listing on the Nasdaq Capital Market in the future. If we fail
to maintain these Nasdaq listing requirements, our Common Stock will be delisted. If our Common Stock is no longer listed on The Nasdaq
Capital Market, our shares would likely trade on the over-the-counter market. If our shares were to trade on the over-the-counter market,
selling our shares could be more difficult because smaller quantities of shares would likely be bought and sold, transactions could be
delayed, and security analysts' coverage of us may be reduced. In addition, in the event our shares are delisted, broker-dealers
have certain regulatory burdens imposed upon them, which may discourage broker-dealers from effecting transactions in our shares, further
limiting the liquidity of our shares. These factors could result in lower prices and larger spreads in the bid and ask prices for our
shares. Such delisting from the Nasdaq Capital Market and continued or further declines in our share price could also greatly impair our
ability to raise additional necessary capital through equity or debt financing, and could significantly increase the ownership dilution
to shareholders caused by our issuing equity in financing or other transactions.
If
we were delisted from Nasdaq, we may become subject to the trading complications experienced by "Penny Stocks" in the over-the-counter
market.
Delisting from Nasdaq
may cause our shares of Common Stock to become the SEC's "penny stock" rules. The SEC generally defines a penny stock
as an equity security that has a market price of less than $5.00 per share or an exercise price of less than $5.00 per share, subject
to specific exemptions. One such exemption is to be listed on Nasdaq. The market price of our Common Stock is currently higher than $1.00
per share. However, because the daily trading volume in our Common Stock is very low, significant price movement can be caused by the
trading in a relatively small number of shares. Therefore, were we to be delisted from Nasdaq Capital Market, our Common Stock may become
subject to the SEC's "penny stock" rules. These rules require, among other things, that any broker engaging in a purchase
or sale of our securities provide its customers with: (i) a risk disclosure document, (ii) disclosure of market quotations, if any, (iii)
disclosure of the compensation of the broker and its salespersons in the transaction and (iv) monthly account statements showing the market
values of our securities held in the customer's accounts. A broker would be required to provide the bid and offer quotations and
compensation information before effecting the transaction. This information must be contained on the customer's confirmation. Generally,
brokers are less willing to effect transactions in penny stocks due to these additional delivery requirements. These requirements may
make it more difficult for shareholders to purchase or sell our shares. Because the broker, not us, prepares this information, we would
not be able to assure that such information is accurate, complete or current.
32
The
market price of our Common Stock may be volatile or may decline regardless of our operating performance based on numerous factors, many
of which are beyond our control.
There are numerous additional
factors, many of which are beyond our control, that may cause the market price of our Common Stock to fluctuate significantly. These factors
include:
●
our
earnings releases, actual or anticipated changes in our earnings, fluctuations in our operating results or our failure to meet the expectations
of financial market analysts and investors;
●
the
financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;
●
actions
of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow
our Company, or our failure to meet these estimates or the expectations of investors;
●
price
                                            and volume fluctuations in the overall stock market, including as a result of trends in the
                                            economy as a whole;
speculation
                                            about our business in the press or the investment community;
●
significant
                                            developments relating to our relationships with our customers or suppliers;
●
customer
                                            demand for our products;
●
investor
                                            perceptions of our industry in general and our company in particular;
●
the
                                            operating and stock performance of comparable companies;
●
general
                                            economic conditions and trends;
●
major
                                            catastrophic events;
●
announcements
                                            by us or our competitors of new products, significant acquisitions, strategic partnerships
                                            or divestitures;
●
changes
                                            in accounting standards, policies, guidance, interpretation or principles;
●
loss
                                            of external funding sources;
●
sales
                                            of our shares, including sales by our directors, officers or significant shareholders; and
●
additions
                                            or departures of key personnel.
Securities
class action litigation is often instituted against companies following periods of volatility in their share price. This type of litigation
could result in substantial costs to us and divert our management's attention and resources. Moreover, securities markets may from
time to time experience significant price and volume fluctuations for reasons unrelated to operating performance of particular companies.
For example, in July 2008, the securities markets in the United States, China and other jurisdictions experienced the largest decline
in share prices since September 2001. These market fluctuations may adversely affect the price of our shares and other interests in our
company at a time when you want to sell your interest in us.
33
If securities or
industry analysts do not publish research or reports about our business, or if they publish a negative report regarding our Common Stock,
the price of our Common Stock and trading volume could decline.
The
trading market for our Common Stock may depend in part on the research and reports that industry or securities analysts publish about
us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade us, the price
of our Common Stock would likely decline. If one or more of these analysts cease coverage of our Company or fail to regularly publish
reports on us, we could lose visibility in the financial markets, which could cause the price of our Common Stock and the trading volume
to decline.
We
do not intend to pay dividends for the foreseeable future.
For
the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and do not anticipate
paying any cash dividends on our shares. Accordingly, investors must be prepared to rely on sales of their shares after price appreciation
to earn an investment return, which may never occur. Investors seeking cash dividends should not purchase our shares. Any determination
to pay dividends in the future will be made at the discretion of our Board, and will depend on our results of operations, financial condition,
contractual restrictions, restrictions imposed by applicable laws, and other factors the Board deems relevant.
We
have granted, and may continue to grant, stock-based awards to Key Employees and Consultants, which will increase our share-based compensation
and may have an adverse effect on our results of operations.
In
order to compete for talents, we may need to offer higher compensation to our key and consultants, including granting awards under our
current equity incentive plan, which may include the grant of shares of restricted common stocks. We have adopted various equity incentive
plans, including the 2018 Equity Incentive Plan, the 2022 Plan, and the most recent, the New 2022 EIP. In addition, we granted a performance-based
stock awards to our Chief Executive Officer, Chief Financial Officer, co-chairwoman and director. We believe the granting of stock-based
awards is important to our ability to attract and retain key personnel and employees, and we will continue to grant share-based awards
in the future. As a result, our expenses associated with share-based compensation will increase, which may have an adverse effect on
our results of operations.
During
the fiscal year ended December 2022, we provided a stock-based compensation to our key employees and by granting awards under our 2022
Plan and, upon its termination, under the New 2022 EIP pursuant to registration statements on Form S-8. The issuance of such shares resulted
in a deduction in our profit although there is no cash paid out. However, such deduction in profit makes our financial performance looks
less attractive to the investor and cause difficulties to raise sufficient capital to support our business.
We
are a "foreign private issuer" and have disclosure obligations that are different than those of U.S. domestic reporting companies.
Therefore, you should not expect to receive the same information about us as a U.S. domestic reporting company may provide. Furthermore,
we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the
Nasdaq corporate governance listing standards; these practices may afford less protection to stockholders than they would enjoy if we
complied fully with the Nasdaq corporate governance listing standards.
We
are a foreign private issuer. As a result, we are not subject to certain of the requirements imposed upon U.S. domestic issuers by the
SEC. For example, we are not required by the SEC or the federal securities laws to issue quarterly reports or file proxy statements with
the SEC. We are also required to file our annual report on Form 20-F with the SEC within four months of our fiscal year end. We are also
not required to disclose certain detailed information regarding executive compensation that is required from U.S. domestic issuers. Further,
our directors and executive officers are not required to report equity holdings under Section 16 of the Securities Act. As a foreign
private issuer, we are also exempt from the requirements of Regulation FD (Fair Disclosure) which, generally, are meant to ensure that
select groups of investors are not privy to specific information about an issuer before other investors. We are, however, still subject
to the anti-fraud and anti-manipulation rules of the SEC, such as Rule 10b-5. Since many of the disclosure obligations required of us
as a foreign private issuer are different than those required by U.S. domestic reporting companies, our shareholders should not expect
to receive all of the same types of information about us and at the same time as information is received from, or provided by, U.S. domestic
reporting companies. We are liable for violations of the rules and regulations of the SEC, which do apply to us as a foreign private
issuer. Violations of these rules could affect our business, results of operations, and financial condition.
34
As
a foreign private issuer, we are also permitted to rely on exemptions from certain NASDAQ corporate governance standards applicable to
domestic U.S. issuers. This may afford less protection to holders of our securities.
We
are exempted from certain corporate governance requirements of the Nasdaq Stock Market by virtue of being a foreign private issuer. As
a foreign private issuer, we are permitted to follow the governance practices of our home country, the Republic of the Marshall Islands
in lieu of certain corporate governance requirements of Nasdaq. As result, the standards applicable to us are considerably different
than the standards applied to domestic U.S. issuers. For instance, we are not required to:
●
have
                                            a compensation committee and a nominating committee to be comprised solely of "independent
                                            directors; and
●
hold
                                            an annual meeting of shareholders no later than one year after the end of the Company's
                                            fiscal year-end.
As
a result, you may not have the same protections afforded to shareholders of companies that are subject to all of the Nasdaq corporate
governance requirements.
Future
sales or perceived sales of our shares of Common Stock could depress our stock price.
As of the date of this
Annual Report, we have 6,063,192 shares of Common Stock outstanding. Many of these shares were either recently registered in the registration
statements on Form S-8 pursuant to our equity incentive plans or will become eligible for sale in the public market, subject to limitations
imposed by Rule 144 under the Securities Act. If the holders of these shares were to attempt to sell a substantial amount of their holdings
at once, the market price of our Common Stock could decline. Moreover, the perceived risk of this potential dilution could cause shareholders
to attempt to sell their shares and investors to short the Common Stock, a practice in which an investor sells shares that he or she does
not own at prevailing market prices, hoping to purchase shares later at a lower price to cover the sale. As each of these events would
cause the number of shares of our Common Stock being offered for sale to increase, the market price of our Common Stock would likely further
decline. All of these events could combine to make it very difficult for us to sell equity or equity-related securities in the future
at a time and price that we deem appropriate.
Holders
of our securities may face difficulties in protecting their interests because we are incorporated under the Republic of the Marshall
Islands law.
We
are a company incorporated under the laws of the Marshall Islands, and almost all of our assets are located outside the United States.
In addition, majority of our directors and officers, and their assets, are located outside of the United States. As a result, you may
have difficulty serving legal process within the United States upon us or any of these persons. You may also have difficulty enforcing,
both in and outside the United States, judgments you may obtain in U.S. courts against us or these persons in any action, including actions
based upon the civil liability provisions of U.S. federal or state securities laws. You may also have difficulty bringing an original
action in the appropriate court of the Marshall Islands to enforce liabilities against us or any person based upon the U.S. federal securities
laws.
Provisions
of our articles of incorporation may impede a takeover or make it more difficult for shareholders to change the direction or management
of the Company, which could reduce shareholders' opportunity to influence management of the Company.
Our
Amended and Restated Articles of Incorporation, as amended (the "Restated Articles") permit our Board to issue up to five
million shares of preferred stock with a par value of $0.0001 (the "Preferred Stock") from time to time, with such rights
and preferences as they consider appropriate. These terms may include voting rights including the right to vote as a series on particular
matters, preferences as to dividends and liquidation, conversion rights and redemption rights provisions. The issuance of any preferred
stock could reduce the value of our Common Stock. In addition, specific rights granted to future holders of preferred stock, including
voting rights and conversion rights, could be used to restrict our ability to merge with, or sell assets to, a third party. As of the
date of this Annual Report, the Company has created and designated the following series of the Preferred Stock: (i) Series A Convertible
Preferred Stock: (ii) Series B Participating Preferred Stock; (iii) Series C Convertible Preferred Stock; and (iv) Series D Convertible
Preferred Stock. Sun Lei, our Chief Executive Officer, Interim Financial Officer, co-chairwoman and director, holds 150,000 shares of
Series C Convertible Preferred Stock that are convertible into 75,000 shares of our Common Stock, 1,240,000 shares of Series A Convertible
Preferred Stock, convertible into 124,000 shares of Common Stock, and 80,000 shares of Series D Preferred Stock, convertible into 104,000
shares of Common Stock. The ability of the Board to issue preferred stock could make it more difficult, delay, discourage, prevent or
make it more costly to acquire or effect a change-in-control, which in turn could prevent shareholders from recognizing a gain in the
event that a favorable offer is extended and could materially and negatively affect the market price of shares of our Common Stock.
35
ITEM
4. INFORMATION ON THE COMPANY
A.
History and Development of the Company
We are a Republic of the Marshall Islands company
incorporated under the Marshall Islands Business Corporations Act ("BDA") on January 26, 2012. We were originally organized
under the name "Acquisition Corp." for the purpose of acquiring through a merger, capital stock exchange, asset acquisition,
stock purchase, or similar acquisition transaction, one or more operating businesses or assets.
The
address of the Company's principal executive office is Bin Hai Da Dao No. 270, Lang Qin Wan Guo Ji Du Jia Cun Zong He Lou, Xiu
Ying District, Haikou City, Hainan Province 570100, People's Republic of China
On
March 24, 2014, we entered into a share exchange agreement and plan of liquidation (the "Exchange Agreement"), with KBS International,
Hongri International, a then wholly owned subsidiary of KBS International and Cheung So Wa and Chan Sun Keung, each an individual and
shareholder of KBS International (each, a "Principal Stockholder"). The Exchange Agreement was subsequently amended on June
21, 2014. The transactions contemplated in the Exchange Agreement (the "Share Exchange") were closed on August 1, 2014. At
the closing, we acquired 100% of the issued and outstanding equity interest in Hongri International from KBS International. Pursuant
to the Exchange Agreement, KBS International was liquidated and dissolved in August 2014 and the shares of Common Stock of the Company
were distributed to each shareholder of KBS International according to their respective ownership of KBS International.
On
October 31, 2014, we amended our Articles of Incorporation to change our name to KBS Fashion Group Limited.
On February 3, 2017, the Company effected a one-for-fifteen
reverse stock split of the Company's issued and outstanding Common Stock. Our Common Stock began trading on the NASDAQ Stock Market
on a split-adjusted basis when the market opened on February 9, 2017.
On
December 9, 2020, we entered into a Share Exchange Agreement (the "Share Exchange Agreement") with Flower Crown Holding,
a corporation organized under the laws of the Cayman Islands (the "Flower Crown"), and the shareholders of Flower Crown (each
a "FC Shareholder" and collectively the "FC Shareholders"), to acquire all the issued and outstanding ordinary
shares of Flower Crown in exchange for the issuance to the FC Shareholders an aggregate of 25,913 shares of our Common Stock (the "Share
Exchange"). The Share Exchange transaction was closed on December 21, 2020 and as a result, Flower Crown is now our wholly-owned
subsidiary.
Flower
Crown is a holding company incorporated on August 7, 2020 in Cayman Islands, which wholly owns Flower Crown (China) Holding Group Co.,
Limited, a limited company incorporated in Hong Kong on May 24, 2018 ("Flower Crown HK"). Flower Crown HK, in turn, wholly
owns all of the share capital of Kim Hyun Technology (Tianjin) Co., Ltd, a wholly foreign-owned enterprise incorporated on July 23, 2020
in China ("Kim Hyun Tianjin" or "WFOE"). Kim Hyun Tianjin, through a series of contractual arrangements, manages
and controls our operating entity, Jin Xuan Luxury Tourism (Hainan) Digital Technology Co., Ltd, a limited company incorporated on August
4, 2016 in P.R.China ("Jin Xuan Luxury Tourism"). Jin Xuan Luxury Tourism wholly owns two subsidiaries, namely Flower Crown
(Hainan) Cross-Border E-Commerce Co., Ltd., a limited company incorporated on July 17, 2020 in P.R.China ("Flower Crown China"),
and Beijing Heyang International Travel Service Co., Ltd., a limited company incorporated on March 29, 2018 in P.R.China ("Heyang
Travel").
Concurrently
with the conclusion of the Share Exchange Agreement on December 9, 2020, we entered into a Stock Purchase Agreement (the "Stock
Purchase Agreement") with Ms. Sun Lei, who at that time was Chief Executive Officer and a director of the Company, which provided
for the issuance of an aggregate of 23,321 shares of the Company (the "Purchased Shares") in exchange for making payments
on behalf of the Company for all "Public Company Expenses" as set forth in the Stock Purchase Agreement for the next two
years, in the amount of no less than $600,000 and no more than $700,000 ("Stock Purchase"). The Stock Purchase transaction
was closed on December 21, 2020. Pursuant to the term of the Stock Purchase Agreement, the Purchased Shares were held in escrow by an
escrow agent to secure Ms. Sun's obligations under the Stock Purchase Agreement and released in every 6 months, pursuant to a vesting
schedule set forth in the Stock Purchase Agreement. As of the date of this Annual Report, 100% of the Purchased Shares were released
from escrow under this Stock Purchase Agreement.
36
On
June 21, 2021, the Company further amended the Restated Articles by filing the Articles of Amendment with the Registrar of the Corporation.
This Amendment to the Articles of Incorporation permitted holders of a majority of the total voting power of the outstanding capital
stock to take any action that is required or permitted to be taken at a meeting of the shareholders, by written consent.
On
October 4, 2021, the Company changed its name from "KBS Fashion Group Limited" to "JX Luxventure Limited" (the
"Name Change") by filing another Articles of Amendment to the Restated Articles with the Registrar of the Corporation reflecting
the change of the corporate name of the Company from "KBS Fashion Group Limited" to "JX Luxventure Limited" which
became effective upon filing.
Effective
December 13, 2021, we reorganized our corporate subsidiary structure in the PRC under Flower Crown Holding ("FLH"). On December
21, 2021, we closed a Share Exchange Agreement with FLH, which operated its China subsidiaries, Jin Xuan Luxury Tourism (Hainan) Digital
Technology Co., Ltd. ("JX Hainan Digital"), Beijing Heyang International Travel Service Co., Ltd. ("Beijing Heyang")
and Flower Crown (Hainan) Cross-Border E-Commerce Co., Ltd. ("FCEC") through a variable interest structure ("VIE").
As a result of the FLH's China subsidiaries restructuring, we no longer operate those entities through a VIE structure and are
now the indirect sole shareholder of JX Hainan Digital and Beijing Heyang. As part of the restructuring, due to the restriction of foreign
ownership by the relevant laws and regulations of the People's Republic of China, namely Provisions on Administration of Foreign
Invested Telecommunications Enterprise (外商投资电信企业管理规定),
we divested FCEC under a Shares Transfer Agreement with a third party. FCEC represented less than 5% of our total revenues.
The
reorganization was approved by the unanimous consent of our Board of Directors and the affirmative vote of the holders of approximately
60.4% of our total issued and outstanding capital stock.
Following
the reorganization, our corporate structure between December 13, 2021 and October 19, 2022 was as follows:
On
January 11, 2022, the Board, by unanimous written consent, in accordance with the Company's Bylaws and the terms of the 2018 Equity
Incentive Plan, and the BCA, terminated the Company's 2018 Equity Incentive Plan and adopted the 2022 JX Luxventure Equity Incentive
Plan (the "2022 Plan"), which provides for up to 1,000,000 shares of our Common Stock that may be issued under the 2022 Plan.
The 2022 Plan was approved by the holders of 60.4% of the total issued and outstanding capital stock of the Company on the same day.
On February 11, 2022, the Company filed the Registration
Statement on Form S-8, in which it registered 400,000 shares of our Common Stock issuable under the 2022 Plan. On July 13, 2022, the Company
filed another Registration Statement on Form S-8, in which it registered the remaining 600,000 shares of Common Stock issuable under the
2022 Plan. These registration statements became effective upon filing. Between February 12, 2022, and October 25, 2022, the Company issued
all of the 1,000,000 shares of Common Stock available for issuance under the 2022 Plan.
37
On
April 9, 2022, the Company dismissed its independent registered public accounting firm, WWC, P.C. The Board of Directors of the Company
approved the dismissal of WWC, P.C. and approved the engagement of Onestop Assurance PAC as our independent registered public accounting
firm. Onestop audited the Company's financial statements for the year ended December 31, 2021 and 2022, in accordance with the
U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission (the "SEC")
for foreign private issuers and the PCAOB.
On
April 20, 2022, our Board adopted resolutions, by unanimous written consent pursuant to Section 35 of the BCA, in which it
determined that the Certificate of Designation of Series A Preferred, the Certificate of Designation of Series B Participating,
Certificate of Designation of Series C Preferred, and the Certificate of Designation of Series D Preferred were not filed with the
Registrar of Corporations in the Marshall Islands ("Registrar of Corporations"), in accordance with the provisions of
sections 35 and 5 of the BCA at the relevant time each Certificate of Designation was approved by the Board, and that it is in the
best interests of the Corporation and its stockholders to correct such administrative oversight by filing Certificate of Designation
of Series A Preferred, the Certificate of Designation of Series B Participating, the Certificate of Designation of Series C
Preferred, and the Certificate of Designation of Series D Preferred with the Registrar of Corporations (collectively, the
"Certificates of Designation of Preferred Stock").
On
April 25, 2022, the Company filed the Certificates of Designation with the Registrar of Corporations under the Company's former
name, KBS Fashion Group Limited (except for the Certificate of Designation of Series D Preferred), and on April 27, 2022, the Company
filed with the Registrar of Corporations the First Amended and Restated Certificate of Designation of Series A Preferred, the Amended
and Restated Certificate of Designation of Series B Participating, the Amended and Restated Certificate of Designation of Series C Preferred,
and the Amended and Restated Certificate of Designation of Series D Preferred, reflecting the Company's current name "JX
Luxventure Limited" and restating all provisions set forth in the Certificates of Designation of Preferred Stock.
On
May 10, 2022, the Company filed the Second Amended and Restated Certificate of Designation of Series A Preferred, which amended the timing
of the conversion of Series A Preferred into Common Stock and restated all other provisions set forth in the First Amended and Restated
Certificate of Designation of Series A Preferred.
On
May 22, 2022, the Board granted 100,000 shares of the Company's Common Stock to Sun Lei pursuant to the employment agreement between
the Company and Sun Lei dated June 22, 2021 (the "2021 Employment Agreement").
On June 22, 2022, the
Board authorized a share repurchase program of up to US$5,000,000 of the Company's common stock from time to time during a 12-month
period by Mr. Lei, our Chief Executive Officer of Company (the "Share Repurchase Program"). Pursuant to the Repurchase Program,
Mrs. Lei will not sell the shares in the public market for at least two years. As of the date of this Annual Report, Ms. Lei completed
the Repurchase Program. Purchase to the Repurchase Program, she acquired in private negotiated transactions 152,000 shares of Common Stock,
at the total purchase price of $1,780,000; 1,240,000 shares of Series A Convertible Preferred Stock, convertible into 124,000 shares of
Common Stock at the total purchase price of $1,240,000; and 80,000 shares of Series D Convertible Preferred Stock, convertible into 104
shares of Common Stock at the purchase price of $2,080,000.
On July 12, 2022, the Company entered into a new
Employment Agreement with Sun Lei (the "2022 Employment Agreement"). The 2022 Employment Agreement has a term of one (1) year.
Pursuant to the terms of the 2022 Employment Agreement, Sun Lei shall receive cash compensation of USD1.00 and stock compensation, the
amount of which will be based upon the Company's achievements, as to be reported on this Annual Report for the fiscal year ended
December 22, 2022.
Company Revenue
Number of
Common Stock
US$59,000,0000 - US$99,999,999
2,500 Shares
US$100,000,000 or more
5,000 Shares
Profit (Loss) Margin from Operation
A 5% - 9% improvement compared to 2021
5,000 Shares
A 10% - 19% improvement compared to 2021
7,5000 Shares
A 20% or more improvement compared to 2021
10,000 Shares
Profit from Non-Menswear operation
Achieve profitability on an adjusted basis
5,000 Shares
The 2022 Employment Agreement has been approved
by unanimous written consent of the Board and by written consent of holders of a majority of the total issued and outstanding capital
stock of the Company.
38
Recent
Developments
On October 19, 2022, the Company entered into
a stock purchase agreement (the "Stock Purchase Agreement") with Shenzhen Zhongjiyingfeng Investment Co., Ltd. (the "Purchaser")
and closed the transaction (the "Closing") pursuant to the terms of the Stock Purchase Agreement (the "Sale and Purchase
Transaction"), resulting in the Company's sale of 20,000 shares of common stock of Hongri International, constituting all
of the issued and outstanding capital stock of Hongri International, to the Purchaser, in consideration for $10,000,000 (the "Purchase
Price").
At
the Closing, the Purchaser issued to the Company a 5% promissory note in the principal amount of $10,000,000, in payment of the Purchase
Price (the "Note"). The Note is payable in four installments, on the following dates and in the following amounts: (a) $1,000,000,
together with an accrued interest, is payable on or before November 19, 2022; (b) $2,000,000, together with an accrued interest, is payable
on or before April 19, 2023; (c) $3,000,000, together with an accrued interest, is payable on or before April 19, 2024, and (d) the remaining
$4,000,000, together with an accrued interest, is payable on or before October 19, 2024. As further inducement of the Company to enter
into the Stock Purchase Agreement and to sell the Shares to the Purchaser on the terms of the Stock Purchase Agreement, on the Closing,
the Purchaser and the Company entered into and executed a Pledge and Security Agreement (the "Pledge Agreement"), pursuant
to which the Purchaser, as the Borrower under the Note, granted the Company a first priority security interest in the Shares of Hongri.
As of the date of this Annual Report, the Purchaser made two payments in the amount of $3,000,000, as required under the Note.
Prior
to the Closing, Hongri International was a wholly-owned subsidiary of the Company through which the Company operated its menswear business.
As a result of the Closing, the Company no longer operates menswear business segment, and Hongri International and its wholly-owned subsidiaries,
France Cock (China) Limited, a Hong-Kong company that owned Company's trademarks, including "KBS" and "Kabiniao,"
Roller Rome Limited ("Roller Rome"), a BVI company, Vast Billion Investment Limited, a Hong Kong company, Hongri PRC, and
Anhui Kai Xin Apparel Company Limited, a PRC company, are no longer the subsidiaries of the Company. Currently, the Company has the following
corporate structure:
On October 26, 2022, the Board, acting by unanimous
consent, in accordance with applicable provisions of the Marshall Island Business Corporations Act ("BCA") and the Company's
Bylaws, terminated the 2022 Plan and adopted a new 2022 Equity Incentive Plan (the "New 2022 EIP"), replacing the 2022 Plan,
effective immediately. On the same date, the holders of 75% of the total issued and outstanding capital stock of the Company entitled
to vote therein, acting by written consent, approved and authorized the terms and provisions of the New 2022 EIP, in accordance with the
applicable provisions of the BCA and the Company's Bylaws.
39
The maximum aggregate
number of shares of Common Stock, issuable under the New 2022 EIP is four million (4,000,000) shares, subject to adjustments in the event
of certain reorganizations, mergers, combinations, recapitalizations, share splits, share dividends, or other similar events which change
the number or kind of shares outstanding. On November 4, 2022, the Company filed a new S-8 Registration Statement, registering 2,000,000
shares out of the total 4,000,000 shares of Common Stock, available to be issued under the New 2022 EIP. On December 12, 2022, the Company
registered the remaining 2,000,000 shares of Common Stock available to be issued under the New 2022 EIP under another S-8 Registration
Statement.
On October 24, 2022, the Company received the
initial letter (the "Notice") from the Listing Qualifications Department of The Nasdaq Stock Market LLC ("Nasdaq"),
notifying the Company that, based upon the closing bid price of its common stock for the last 30 consecutive business days preceding the
Notice, the Company was not in compliance with the $1.00 per share minimum bid price for continued listing on The Nasdaq Capital Market
under Nasdaq Listing Rule 5550(a)(2) (the "Minimum Bid Requirement"). The Notice provided the Company a period of 180 calendar
days from the date of the Notice, or until April 24, 2023, as set forth in Listing Rule 5810(c)(3)(A) (the "Compliance Period"),
to regain compliance with Minimum Bid Requirement.
On March 24, 2023, the Board and holders of a
majority of the Company's voting power of the outstanding capital stock, approved, by written consent in lieu of a meeting (a) a
reverse stock split of the Company's outstanding common stock, $0.0001 par value per share (the "Common Stock") in a
ratio of not less than 1-for-5 and not more than 1-for-15 (the "Split Range") and granted the Board the ultimate authority
to determine the exact split ratio of the reverse stock split within the Split Range, and (b) the form, terms, and provisions of an Amendment
to the Amended and Restated Articles of Incorporation (the "Amendment"). On April 17, 2023, the Board determined that, based
on the market price of the Company's Common Stock, a 1-for-10 split ratio would be appropriate (the "Reverse Stock Split").
On April 25, 2023, the Company filed the Amendment to the Restated Articles with the Registrar or Deputy Registrar of Corporations in
the Marshall Islands, implementing the Reverse Stock Split. Upon the opening of the market on April 26, 2023, the Company's common
stock began trading on the Nasdaq Capital Market on a post-split basis. Since that date, the Company's common stock has continually
traded well above the Minimum Bid Requirement. However, the Company did not regain compliance with the Minimum Bid Requirement by April
24, 2023, as required by the Notice.
On April 25, 2023, the Company received a Staff
Determination Letter (the "Determination Letter") from the Listing Qualifications Department of Nasdaq notifying it that,
unless the Company requested an appeal of that determination to a Nasdaq Hearings Panel, the Staff would schedule the Company's
securities for delisting from The Nasdaq Capital Market and would suspend trading of the Company's common stock at the opening of
business on May 4, 2023 due to the Company's failure to regain compliance with the Minimum Bid Requirement. On April 26, 2023, the
Company submitted a request for a hearing before the Nasdaq Hearings Panel to present its plan to regain compliance with the Minimum Bid
Requirement. On April 27, 2023, the Company received a letter from Nasdaq granting the appeal and scheduling the hearing for May
25, 2023.  This hearing request will stay the suspension of the Company's securities and the filing of Form 25-NSE pending
the Nasdaq Hearings Panel's decision. On May 10, 2023, our Common Stock traded for over $1.00 for ten consecutive business days.
We will request
the Hearing Panel to evaluate the Company's compliance with the Minimum Bid
Requirement and other continued listing requirements for trading on the Nasdaq Capital Market. However, there is no assurance that Nasdaq
Qualification and the Hearing Panel determine that as of the date of this Annual Report, the Company is in full compliance with all continued
listing requirements.
The
Securities and Exchange Commission, or SEC, maintains an Internet site that contains reports, proxy and information statements and other
information regarding issuers that file electronically with the SEC at http://www.sec.gov.
See
"
Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Capital Expenditures
"
for a discussion of our capital expenditures.
Our
web site address is http://www.jxluxventure.com. Information contained on, or that can be accessed through, our website does not constitute
a part of this Annual Report.
B.
Business Overview
We are a holding company incorporated in Marshall
Islands that conducts substantially all of its business operations in China. Following the sale of our wholly-owned subsidiary, Hongri
International and its wholly-owned subsidiaries, through which the Company previously operated its menswear business, we divested our
menswear business and have consistently focused our business operations on the tourism sector and supplying related products, including
technology solutions, to business partners in China, both online and offline.
We believe
that the significant growth and success of our business operations since 2020 can be attributed to the high quality of our employees,
our ability to offer our business clients
high-end travel products full range of services related to luxury tourism and supplemental
services
to reduce their total cost of procurement and
ensuring that our clients receive
the high-quality professional assistance they need.
40
We operate in the following operating segments
of business:
1) Airline tickets and tourism services.
2) Software Solution for Tourism Cross-border
operation and
3) Tourism Cross-border Merchandise. The focus
on our technology solution has enabled us to achieve significant growth since 2020 by facilitating tourism cross-border commerce and offering
services in tourism and airline tickets.
Our website is www.jxluxventure.com.
Our Mission
Our mission is to provide outstanding value to
our clients and to enhance their satisfaction. We believe that we have and will maintain a competitive edge in the evolving travel industry
that will help us to remain at the forefront of the evolving travel industry. based on our reliability, our dedication to deliver professional
high-quality value that contributes to the success and growth of our clients and our comprehensive approach to procurement, package design,
and distribution of our products and services.
Our Strategy
To achieve this goal, we implement the following
strategy:
●
Strategic Partnerships
: We continuously seek new opportunities to forge mutually beneficial partnerships
with airlines and other stakeholders in the travel industry, further enhancing our service offerings.
●
Technology Advancements
: Our investment in cutting-edge software solutions enables us to streamline
processes, optimize pricing, and ultimately deliver superior travel experiences to our clients' end-users.
●
Customer Support
: We prioritize providing high-quality customer support, ensuring that our business
clients receive the assistance they need to address any challenges that may arise during their partnership with us.
●
Market Analysis
:
                                            Our team of experts constantly monitors market trends and industry developments, allowing
                                            us to adapt and innovate our offerings to meet the evolving needs of our clients.
Since December 2021, our subsidiaries engaged
in the following transactions related to cross-border merchandise, the software solution for tourism cross-border operations, and travel
services and products with our business clients and partners:
On December 30, 2021, Flower Crown (China) Holding
Group Co., Limited. ("Flower Crown"), entered into a Global Shopping E-Commerce Open Platform Store Service Agreement (the
"E-Commerce Service Agreement") with Global Premium Buy (Macau) Limited ("GPBL"). Pursuant to the E-Commerce Service
Agreement, Flower Crown has opened online stores on GPBL's platform and engages in product sharing on content platforms operated
by GPBL's affiliates, which include "Tik Tok", "Dou Yin", "Xigua" and "Tik Tok Volcano
Edition".
On December 27, 2021, JX Luxventure (Hainan) Digital
Technology Co., Ltd. closed a Real Estate Transaction Contract with a non-affiliate, acquiring a piece of commercial real estate of 240
square meters for cross-border operations for the amount of USD $2,338,464 based upon the appraisal report.
On February 9, 2022, Jin Xuan Luxury Tourism (Hainan)
Digital Technology Co., Ltd. ("JX Hainan"), a subsidiary of the Company, entered into and executed a Memorandum of Japanese
High-end Life Style Services Strategic Cooperation Agreement (the "Agreement") with Xin Hua Fund Co., Ltd. ("XHFC").
Pursuant to the Agreement, JX Hainan and XHFC will cooperate to bring high-end Japanese medical treatment, rehabilitation treatment, precision
physical examination, anti-aging beauty and other related services to the China market.
41
On March 10, 2022, Jin Xuan Luxury Tourism (Hainan)
Digital Technology Co., Ltd. ("JX Hainan") entered into and executed a Strategic Cooperation Framework Agreement on Cross-border
Supply Chain of Duty Free Merchandize (the "Agreement") with Aikayun Technology (Hainan) Co., Ltd. ("Aikayun").
Pursuant to the Agreement, JX Hainan will have the exclusive right to distribute cross-border products from Japan in the Hainan Island
in the amount of up to RMB1,000,000,000.
On March 21, 2022, Jin Xuan Luxury Tourism (Hainan)
Digital Technology Co., Ltd. ("JX Hainan), entered into and executed a Framework Agreement on Strategic Cooperation (the "Agreement")
with Chongqing E-Pet Technology Co., Ltd. ("Chongqing E-Pet"), one of the major operators of online cross-border pet-food
shopping platform in China. Pursuant to the Agreement, Chongqing E-Pet will purchase from JX Hainan cross-border pet foods in the amount
up to USD60,000,000 to be distributed on the platforms operated by Chongqing E-Pet.
On March 31, 2022, Jin Xuan Luxury Tourism (Hainan)
Digital Technology Co., Ltd. ("JX Hainan"), entered into and executed a Framework Agreement on Strategic Cooperation (the
"Agreement") with Ragdoll International Trading Co., Ltd. ("Ragdoll"), an E-commerce platform operator. Pursuant
to the Agreement, Ragdoll will purchase from JX Hainan cross-border pet foods in the amount of up to USD30,000,000 to be distributed on
the platforms operated by Ragdoll.
On May 21, 2022, Beijing Heyang International
Travel Service Co., Ltd. ("Beijing HITC") entered and executed a Group Airline Ticket Framework Agreement (the "Agreement")
with Tianjin China Travel International Travel Service Co., Ltd. ("Tianjin CTITC"). Pursuant to the Agreement, Tianjin CTITC
will purchase from Beijing HITC airline tickets in the amount of up to US$10,000,000.
On June 1, 2022, Jin Xuan Luxury Tourism (Hainan)
Digital Technology Co., Ltd. ("JX Hainan") entered into and executed a Technology Consulting Agreement (the "Agreement")
with Tianjin City Wei Ka Technology Co., Ltd. ("Tianjin Wei Ka"). Pursuant to the Agreement, JX Hainan will provide technology
consulting services to Tianjin Wei Ka by delivering a solution for a non-fungible token (NFT)-based virtual human host to be used on live
stream platforms.
On June 17, 2022, Jin Xuan Luxury Tourism (Hainan)
Digital Technology Co., Ltd. ("JX Hainan") entered into and executed a Framework Agreement on Strategic Cooperation (the "Agreement")
with Hainan Douxing Cultural Media Co., Ltd. ("Hainan Douxing"), one of the major live stream content providers with over
30 A list live streamers and reaches over 30,000,000 followers in China. Pursuant to the Agreement, Hainan Douxing will sell JX Hainan
cross-border merchandise, including cosmetics and skincare products, in the amount up to USD30,000,000 on the live-stream E-commerce shows
hosted by Hainan Douxing.
On July
26, 2022, Jin Xuan (Hainan) Holding Co., Ltd. ("JX Hainan"), entered into and executed a Cooperation Agreement (the "Agreement")
with Kaiwo International Trading Co. Ltd. ("Kaiwo"). Pursuant to the Agreement, Kaiwo will sell high-end foreign luxury
automobiles supplied by JX Hainan in the amount of up to USD50,000,000.
On October 3, 2022, Flower Crown (China) Holding
Group Co., Ltd. ("JXFC") entered into and executed a Strategic Cooperation Agreement (the "Agreement") with Hainan
Hang Seng Zhongli Commercial Holding Co., Ltd. ("HS Zhongli"), a leading distributor of pet products in China, for the sale,
marketing and distribution of JXFC's pet food products by HS Zhongli. The Agreement provides that the target annual sales amount
of JXFC's pet food products is $20,000,000 and if HS Zhongli achieves this targeted annual sales amount, the Agreement will be automatically
renewed for an additional year.
Competition
:
We face intense competition in the cross-border merchandise
and tourism industries from large suppliers and wholesalers of a broad range of services, including tourism and travel-related products.
These companies maintain or develop self-distribution systems for their businesses and have greater brand recognition and financial and
other resources than we do, which may make it more difficult for us to maintain or gain market share. We also face intense competition
from mass merchandisers and rapidly growing alternative retail channels, such as Internet-based retailers that offer a broad range of
products and services and home delivery services. Among our competitors are FASTENAL (NYSE:FAST), SYSCO (NYSE:SYY) and United Natural
Foods (NASDAQ: UNFI).
The primary competitive factors in the tourism
services and cross-border merchandise business include price, service level, product quality, variety, convenience, and consistency of
service, availability and other value-added services. Competitive strategies vary based on many factors, such as the competitor's
format, strengths, weaknesses, pricing, and sales focus.
42
Our Revenue Model Business Segments
Airline Tickets and Tourism Services
We are a well-known supplier of airline tickets,
catering to the needs of our esteemed business customers. Our tourism products provide luxury travel experience packages, designed exclusively
for online platforms operated by our distinguished business clients. Our current roster of prominent partners includes industry frontrunners
such as 51books.com and Beijing Jiuzhou Skyline International Travel Service Co., Ltd. We have successfully forged agreements with 37
airline operators within China, encompassing a significant portion of the market. Among our top clients are leading industry players such
as Guangzhou Kanghui International Travel Agency Co., Ltd and CITIC International Travel.
We provide more compelling, bundled travel experience
packages that cater to a diverse range of our business customer needs, among which are travel packages that are designed exclusively for
online platforms operated by our distinguished business clients, to ensure seamless integration with their online platforms and streamlined
distribution to their end-users.
Our comprehensive process for curating these luxury
travel packages includes the following key steps:
●
Tailored Travel Packages
: We carefully design travel packages that cater to diverse consumer interests
and preferences, ensuring our clients can offer unique, memorable experiences to their end-users.
●
Strategic Partnerships
: We forge strong relationships with airlines and other travel industry stakeholders,
enabling us to secure competitive pricing for our clients.
●
Cutting-Edge Technology
: Our software solution streamlines the booking and management processes
for our clients, enhancing the overall travel experience for their end-users.
●
Procurement of Luxury Assets
: We carefully select and procure non-refundable time allocations from
our exclusive network of luxury service providers, including top-tier automobile and yacht companies.
●
Package Design and Curation
:
                                            Our team of experienced professionals thoughtfully combines these luxury assets to create
                                            unique, all-encompassing luxury experiences tailored to the diverse preferences and expectations
                                            of our clients' end-users.
●
Supply and Distribution
: We efficiently supply these high-end travel products to our business clients,
ensuring seamless integration with their online platforms and streamlined distribution to their end-users.
In our commitment to maintaining strong relationships
with our business clients and partners, we assume all risks associated with the non-refundable nature of our purchases, making it easier
for our business clients to offer luxury experiences to their end-user customers. That process evidences our dedication to the success
of our business clients and ensures a seamless customer experience for their end-users. For example, if end-users of our business clients
fail to complete a purchase or request a return, we are fully committed to providing a full refund of the purchase price and assuming
all risks associated with this return.
Technology Solution for Tourism Cross-Border
Operations:
Our software solution for tourism cross-border
operations management is a comprehensive, innovative, and reliable tool for businesses engaged in international commerce. By combining
advanced features with a client-centric revenue model, we can foster long-lasting relationships with our business partners while positioning
ourselves as a software solution provider uniquely tailored for tourism cross-border operations management, designed to provide businesses
with a robust, user-friendly, and efficient platform for managing their international commerce activities. The software solution streamlines
product monitoring and distribution processes and offers a range of features and capabilities that enhance overall operational efficiency.
Our software solution comprises two primary components:
1)
the Sourcing Solution which empowers us to accurately forecast market trends and offer competitive pricing
to our business clients; and
2)
the Business Solution which provides small to medium-sized business partners with a comprehensive platform
to streamline merchandise operations and enhance customer engagement.
43
Our Business Solution has been recognized by the
Hainan Province's Cross-border Merchandise Association (CMA) as the standard solutions for its members, thus further solidifying its status
as a reliable and innovative solution for businesses engaged in tourism cross-border commerce. Our current largest client is Hainan Province's
Cross-border Merchandise Association, a testament to the software's efficacy and value in the marketplace.
Our Software Solution provides the following benefits:
●
Real-Time Inventory Management
: Our software solution allows merchants to track product inventory
levels in real-time, enabling them to make informed decisions regarding procurement and distribution, ultimately minimizing stockouts
and excess inventory.
●
Order Processing and Fulfillment
: The software solution facilitates seamless order processing and
fulfillment, ensuring timely delivery of products to customers and enhancing customer satisfaction.
●
Compliance and Regulatory Support
: Our software solution is equipped with tools to help businesses
navigate complex cross-border regulatory requirements, ensuring compliance with various international trade laws and regulations.
●
Data Analytics and Reporting
: The software solution provides advanced data analytics and reporting
capabilities, empowering merchants with valuable insights into their cross-border operations. These insights can be used to identify areas
for improvement, optimize processes, and drive overall business growth.
●
Scalability and Flexibility
: Our software solution is designed to scale alongside businesses as
they grow, allowing them to easily expand their cross-border operations without being hindered by software limitations.
Our revenue model is strategically structured
to promote widespread adoption of our software and encourage long-term customer commitment. The first year of use is offered free of
charge, allowing clients to fully experience the benefits of our platform without incurring upfront costs. Following this trial period,
clients transition to a licensing payment model, which generates a steady, recurring revenue stream for our company while providing ongoing
support, updates, and enhancements for our clients.
Tourism Cross-border merchandise
The Company is a supplier
of a broad range of high-quality tourism cross-border merchandise to business clients that operate online and offline platforms, while
simultaneously leveraging cutting-edge technology to optimize operations and support their ongoing success. The Company specializes in
sourcing unique, high-quality Flower Crown Products from a diverse network of international and domestic third-party suppliers. We have
adopted a strategic approach to managing tourism cross-border merchandise, ensuring that our business customers have access to a diverse
range of high-quality products. By adopting advanced solutions such as AI-based analysis and state-of-the-art warehouse management software,
we can create a more efficient supply chain, mitigate risks associated with excess inventory, and ultimately ensure our clients' sustained
growth in the competitive market.
Our current top three business customers are Chongqing
E-Pet Technology Co., Ltd.,
Kaiwo International Trading Co. Ltd.
and Southern Airlines cross-border
e-commerce.
44
Our diverse product portfolios encompass
1) health care products;
2) personal care products;
3) cosmetics;
4) maternal and child products;
5) pet-related products;
6) universal cuisine,
7) universal household products and
8) Pre-owned Electric Cars.
Our comprehensive process involves procuring items
from reputable third-party suppliers, storing them securely in our warehouse facilities, and then efficiently distributing these products
to our valued business clients. We implement the same approach to our customers as the approach purchases made from third-party manufacturers
are non-refundable, which means that we assume all risks associated with the tourism cross-border merchandise we acquire. We believe that
we have a niche in this area of cross-border merchandise, which is based on our significant experience in meticulously curating and offering
customized high-end luxury products and services to our clients that encompass various offerings, such as exclusive access to our extensive
network of luxury automobiles and yachts.
Our Competitive Strengths and Growth Strategy
The key aspects of our cross-border Products Supply strategy include:
●
Rigorous Supplier Selection
: We prioritize building relationships
with reputable suppliers that consistently deliver high-quality products.
●
Extensive Product Offerings
: Our diverse product range is designed
to cater to the varying needs and preferences of our clients' end-users.
●
Competitive Pricing
: Our focus on maintaining cost-effective supply
chains enables us to provide our clients with attractive pricing structures, ensuring their success in the market.
To maintain our competitive edge in the rapidly evolving market, we
have implemented several advanced technologies and innovative strategies, including:
AI-Based Analysis Program
:
This
cutting-edge system identifies emerging trends in tourism cross-border merchandise, enabling us to stay ahead of the curve and ensure
our business customers have access to the latest, most sought-after products available in the market. By leveraging artificial intelligence,
we can make more informed decisions about which products to source and supply, ultimately driving the success of our clients.
State-of-the-Art
Warehouse Management Software
: Our custom-developed warehouse management system allows our business customers to monitor real-time
inventory levels, streamlining the supply chain process and ensuring optimal efficiency. This advanced software solution not only enhances
transparency but also fosters trust and collaboration between our company and our clients.
Innovative Excess
Inventory Management
:
Our unique approach to addressing the challenge of surplus inventory involves a dynamic warehouse management
system that facilitates the sharing of unsold merchandise among our business clients. If a client is unable to sell the full amount of
tourism cross-border merchandise supplied by us during a single live stream event, as an example, our system enables other customers to
view the unsold items and place orders accordingly. This strategic use of technology significantly reduces the risks associated with excess
inventory, resulting in a more efficient and streamlined supply chain for all parties involved.
45
Description
of Property
Properties
We Lease
We
currently lease additional spaces as indicated below:
Lessor/Rental Cost per month
Lessee
Location
Area (Square Meter)
Annual Rent
Term
Use
Hainan Ousheng Investment Co., Ltd
*
Jin Xuan Luxury Tourism
No. 270 Binhai Avenue, Langqinwan International Hot Spring Resort Complex, 3rd Floor, Room 302, Haikou, Hainan Provin
0
$
0
August 20, 2020 to Parties decide to terminate
Office
Lin Yongxue*
Jin Xuan Luxury Tourism
Room 1201, Floor 12, Building A, Lingao Creative Industrial Park Phase III, Xiqing District, Tianjin
N/A
$14,435 (RMB99,996)
January 4, 2021 to June 30, 2023
Office
Li Jinping
Jin Xuan Luxury Tourism
Building 5, Entrance 1, Room 101, Baofu 9th Courtyard Project, Intersection of Weijin South Road and Suijiang Road, Xiqing District, Tianjin
0
$
0
June 29, 2022 to June 30 2024
Office
Lu Liyou*
Jin Xuan Luxury Tourism
608, Block A, Jingji Riverside Times, Binhe Avenue, Futian District, Shenzhen
238
$59,077 (RMB384,000)
June 8, 2021 to June 7, 2023
Office
Sun Lei
Heyang Travel
E-33, Low-rise Residential European Style, A09-2C Area, Clear Water Bay Tourism Resort, Yingzhou Town, Lingshui County, Hainan Province
0
0
Feb 1, 2023 to Jan 31, 2026
Office
Li Yilong
Heyang Travel
E-33, Low-rise Residential European
0
0
Jan 1, 2022 to Dec 31, 2024
Office
Li Jinping
Heyang Travel
Building 5, Entrance 1, Room 102, Baofu 9th Courtyard Project, Intersection of Weijin South Road and Suijiang Road, Xiqing District, Tianjin
0
0
May 30, 2022 to May 29, 2024
Office
*
Hainan Ousheng Investment
Co., Ltd
,Lin Yongxue and Lu Liyou are not a related party to the Company.
Business
Employees
As of the date of this Annual Report, the Company, its subsidiaries and PRC operating
entities have a total of 170 employees, including 55 full time employees and 115 part time employees, and have no independent contractors.
We
believe our employees' compensation packages are competitive and we have created a merit-based work environment that encourages
initiative. As a result, we have generally been able to attract and retain qualified personnel and maintain a stable core management
team.
As
required by regulations in China, we participate in various employee social security plans that are organized by local governments,
including pension, unemployment insurance, childbirth insurance, work-related injury insurance, medical insurance and housing
insurance. Pursuant to PRC regulations, we are required to contribute specific percentage of salaries, bonuses, and allowances (up
to a maximum amount, specified by local governmental regulations) to the employee benefit plan. As of the date of this Annual
Report, we have made adequate social insurance and housing fund contributions for all employees as required by PRC
regulations.
We
enter into standard labor agreements with our full-time employees with standard confidentiality and non-compete provisions. We believe
that we maintain a good working relationship with our employees, and we have not experienced any major labor disputes, which may have,
or have had in the recent past, material adverse effects on our financial position or profitability.
46
Intellectual
Property
Our
business is dependent on a combination of trademarks, domain names, trade names, trade secrets and other proprietary rights in order
to protect our intellectual property rights. Upon acquisition of Flower Crown, we have applied for several trademarks, all of which are
pending approval by the Trademark Office of China National Intellectual Property Administration ("Trademark Office"). Set
forth below is a detailed description of our trademarks:
Country
Trademark
Trademark No.
Trademark Name
Trademark Application Date
Trademark Classes
Trademark Owner
Trademark Term
Trademark Status
China
51872718
Bu Fan Xing Jing
12/04/2020
35
Beijing Heyang
Approved
China
50933195
11/03/2020
35
Flower Crown (Hainan)
Approved
China
50941310
Quanqiu Yixianghui
11/03/2020
35
Flower Crown (Hainan)
Approved
China
49572627
Jinxuan Pinlv
09/08/2020
41
Jinxuan Luxury Tourism
Approved
China
49572624
Jinxuan Pinlv
09/08/2020
43
Jinxuan Luxury Tourism
Approved
China
49567840
09/08/2020
35
Jinxuan Luxury Tourism
Approved
China
49580237
LUXVENTFURE
09/08/2020
43
Jinxuan Luxury Tourism
Approved
China
49563070
09/08/2020
41
Jinxuan Luxury Tourism
Approved
China
49592112
LUXVENTFURE
09/08/2020
41
Jinxuan Luxury Tourism
Approved
China
49563061
09/08/2020
43
Jinxuan Luxury Tourism
Approved
47
Country
Trademark
Trademark No.
Trademark Name
Trademark Application Date
Trademark Classes
Trademark Owner
Trademark Term
Trademark Status
China
49563090
LUXVENTFURE
09/08/2020
35
Jinxuan Luxury Tourism
Approved
China
49572631
Jinxuan Pinlv
09/08/2020
39
Jinxuan Luxury Tourism
Approved
China
49583228
Jinxuan Pinlv
09/08/2020
35
Jinxuan Luxury Tourism
Approved
China
49593405
09/08/2020
39
Jinxuan Luxury Tourism
Approved
China
49580225
LUXVENTURE
09/08/2020
39
Jinxuan Luxury Tourism
Approved
Hong Kong
305384304
09/08/2020
Approved
Hong Kong
305384313
Jinxuan Pinlv
09/08/2020
Approved
Hong Kong
305384322
LUXVENTURE
09/08/2020
Approved
Macao
N/173434(304)
09/18/2020
Jinxuan Luxury Tourism
Approved
Macao
N/173435(975)
09/18/2020
Jinxuan Luxury Tourism
Approved
Macao
N/173436(747)
09/18/2020
Jinxuan Luxury Tourism
Approved
Macao
N/173437(132)
09/18/2020
Jinxuan Luxury Tourism
Approved
Macao
N/173438(333)
09/18/2020
Jinxuan Luxury Tourism
Approved
Macao
N/173439(206)
09/18/2020
Jinxuan Luxury Tourism
Approved
Macao
N/173440(834)
09/18/2020
Jinxuan Luxury Tourism
Approved
Macao
N/173441(540)
09/18/2020
Jinxuan Luxury Tourism
Approved
Macao
N/173442(418)
09/18/2020
Jinxuan Luxury Tourism
Approved
48
Country
Trademark
Trademark No.
Trademark Name
Trademark Application Date
Trademark Classes
Trademark Owner
Trademark Term
Trademark Status
Macao
N/173443(343)
09/18/2020
Jinxuan Luxury Tourism
Approved
Macao
N/173444(867)
09/18/2020
Jinxuan Luxury Tourism
Approved
Macao
N/173445(578)
09/18/2020
Jinxuan Luxury Tourism
Approved
Taiwan
109063176
Jinxuan Pinlv
09/10/2020
35
Jinxuan Luxury Tourism
Approved
Taiwan
109063175
Jinxuan Pinlv
09/10/2020
39
Jinxuan Luxury Tourism
Approved
Taiwan
109063173
Jinxuan Pinlv
09/10/2020
43
Jinxuan Luxury Tourism
Approved
Taiwan
109063186
LUXVENTURE
09/10/2020
41
Jinxuan Luxury Tourism
Approved
Taiwan
109063178
09/10/2020
41
Jinxuan Luxury Tourism
Approved
Taiwan
109063177
09/10/2020
43
Jinxuan Luxury Tourism
Approved
Taiwan
109063183
09/10/2020
39
Jinxuan Luxury Tourism
Approved
Taiwan
109063184
09/10/2020
35
Jinxuan Luxury Tourism
Approved
Taiwan
109063187
LUXVENTURE
09/10/2020
39
Jinxuan Luxury Tourism
Approved
Taiwan
109063188
LUXVENTURE
09/10/2020
35
Jinxuan Luxury Tourism
Approved
Taiwan
109063174
Jinxuan Pinlv
09/10/2020
41
Jinxuan Luxury Tourism
Approved
Taiwan
109063185
LUXVENTURE
09/10/2020
43
Jinxuan Luxury Tourism
Approved
49
Insurance
We
do not have any business liability, interruption or litigation insurance coverage for our operations in China. Insurance companies
in China offer limited business insurance products. While business interruption insurance is available to a limited extent in China,
we have determined that the risks of interruption, cost of such insurance and the difficulties associated with acquiring such
insurance on commercially reasonable terms make it impractical for us to have such insurance. Therefore, we are subject to business
and product liability exposure. See "Risk Factors—Risks Related to Our Business—We have limited insurance coverage
in China and may not be able to recover insurance proceeds if we experience uninsured losses."
Impact
of the COVID-19 pandemic
The impact of the COVID-19 pandemic on the Company's business
has been severe, widespread and continues to evolve. The recent COVID-19 pandemic adversely affected many businesses in China. China implemented
nationwide efforts to contain the spread of the novel coronavirus, particularly. during 2021 and 2022, when the most severe additional
lockdowns were implemented, including lockdowns in Hainan Island. These lockdowns had a significant impact on our operations, particularly
on Hainan Island, where we are based. As a result of the lockdown on Hainan Island, Chinese customs were closed, preventing the sanitization
and inspection of imported products for potential COVID-19 contamination. This effectively halted our cross-border operations. The global
spread of COVID-19 also affected our sales. This growth in revenue, especially revenues from our tourism business, has been adversely
impacted by COVID-19 pandemic at various times during 2021 because of government-enforced lockdowns.
Regulation
This
section sets forth a summary of the most significant rules and regulations that affect our business activities in the PRC.
REGULATIONS
RELATING TO FOREIGN INVESTMENT
The
establishment, operation and management of companies in China are mainly governed by the PRC Company Law, as most recently amended in
2018, which applies to both domestic companies and foreign-invested companies. Prior to January 1, 2020, the fundamental laws governing
the foreign-invested enterprises were the Sino-foreign Equity Joint Venture Enterprise Law of the PRC, the Sino-foreign Cooperative Joint
Venture Enterprise Law of the PRC, and the Wholly Foreign-invested Enterprise Law of the PRC, together with their implementation rules
and regulations. On March 15, 2019, the National People's Congress of the PRC approved the Foreign Investment Law of the PRC (the
"Foreign Investment Law"), which came into effect on January 1, 2020 and replaced the Sino-foreign Equity Joint Venture Enterprise
Law of the PRC, the Sino-foreign Cooperative Joint Venture Enterprise Law of the PRC and the Wholly Foreign-invested Enterprise Law of
the PRC. Pursuant to the Foreign Investment Law, "foreign investment" refers to investment activities conducted by foreign
investors (including foreign natural persons, foreign enterprises or other foreign organizations) directly or indirectly in the PRC,
which include any of the following circumstances: (i) foreign investors setting up foreign-invested enterprises in the PRC solely or
jointly with other investors, (ii) foreign investors obtaining shares, equity interests, property portions or other similar rights and
interests of enterprises within the PRC, (iii) foreign investors investing in new projects in the PRC solely or jointly with other investors,
and (ⅳ) investment in other methods as specified in laws, administrative regulations, or as stipulated by the State Council.
On
December 26, 2019, the State Council promulgated the Implementing Regulations of the Foreign Investment Law of the PRC (the "Implementing
Rules"), with effect from January 1, 2020 to ensure the effective implementation of the Foreign Investment Law. The Implementing
Rules provide that foreign-invested enterprises that invest in the PRC shall be governed by the Foreign Investment Law and the Implementing
Rules.
50
The
Foreign Investment Law and the Implementing Rules stipulate that the PRC implements a system of pre-entry national treatment plus negative
list for the administration of foreign investment. "Pre-entry national treatment" means the treatment given to foreign investors
and their investment at the market accessing stage being not less favorable than that given to domestic investors and their investment.
"Negative list" means the special administrative measures stipulated by the State for foreign investment's access to
specific areas. Foreign investors shall not invest in any area where foreign investment is prohibited as set out in the negative list;
foreign investors shall meet the conditions prescribed in the negative list before investing in any area where foreign investment is
restricted. Thus, the PRC grants national treatment to foreign investment outside the negative list. The currently effective negative
list is published by the National Development and Reform Commission and the Ministry of Commerce on December 27, 2021, which became effective
on January 1, 2022 (the "2021 Negative List").
Except
for the regulations on market entry, the Foreign Investment Law and the Implementing Rules undertake to protect the investment, incomes
and other legitimate rights and interests of foreign investors in China. The Foreign Investment Law and the Implementing Rules allow
foreign investors' profits, capital gains, intellectual property royalties and other gains to be freely remitted outward in accordance
with the law. It also contains provisions aiming to promote foreign investment, including that the State's policies supporting
enterprise development are equally applicable to foreign-invested enterprises in accordance with the law.
In
terms of foreign-invested enterprises established according to the Sino-foreign Equity Joint Venture Enterprise Law of the PRC, the Sino-foreign
Cooperative Joint Venture Enterprise Law of the PRC or the Wholly Foreign-invested Enterprise Law of the PRC before the implementation
of the Foreign Investment Law, the Foreign Investment Law provides that they may maintain their original organization forms within five
years after the implementation of the Foreign Investment Law.
Pursuant
to the Foreign Investment Law and the Implementing Rules, and the Information Reporting Measures for Foreign Investment jointly promulgated
by the Ministry of Commerce and the State Administration for Market Regulation, which took effect on January 1, 2020, a foreign investment
information reporting system shall be established and foreign investors or foreign-invested enterprises shall report investment information
to competent commerce departments of the government through the enterprise registration system and the enterprise credit information
publicity system, and the administration for market regulation shall forward the above investment information to the competent commerce
departments in a timely manner. In addition, the Ministry of Commerce shall set up a foreign investment information reporting system
to receive and handle the investment information and inter-departmentally shared information forwarded by the administration for market
regulation in a timely manner. The foreign investors or foreign-invested enterprises shall report the investment information by submitting
reports including initial reports, change reports, deregistration reports and annual reports.
REGULATIONS
RELATING TO OVERSEAS LISTING
On
August 8, 2006, six PRC regulatory agencies, including the China Securities Regulatory Commission (the "CSRC"), promulgated
the Rules on the Merger and Acquisition of Domestic Enterprises by Foreign Investors (the "M&A Rules"), which took effect
on September 6, 2006 and was amended on June 22, 2009. The M&A Rules, among other things, requires offshore special purpose vehicles
formed for overseas listing purposes through acquisitions of PRC domestic companies and controlled by PRC domestic 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. In September 2006, the CSRC published on its official website procedures regarding its approval of overseas listings
by special purpose vehicles.
On
July 6, 2021, the State Council and General Office of the CPC Central Committee issued Opinions on Strictly Cracking Down Illegal Securities
Activities in Accordance with the Law. The opinions emphasize 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.
On
February 17, 2023, the CSRC promulgated the Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic
companies (the "Overseas Listing Trial Measures") and relevant five guidelines, which will become effective on March 31,
2023. The Overseas Listing Trial Measures will comprehensively improve and reform the existing regulatory regime for overseas securities
offering and listing of PRC domestic companies by adopting a filing-based regulatory regime. According to the Overseas Listing Trial
Measures, PRC domestic companies that seek to offer and list securities in overseas markets, either directly or indirectly, are required
to fulfill the filing procedure with the CSRC and report relevant information.
51
The Overseas Listing Trial Measures provide that
if the issuer meets both of the following criteria, the overseas securities offering and listing conducted by such issuer will be deemed
as an indirect overseas offering and listing by PRC domestic companies: (i) more than 50% of any of the issuer's operating revenue,
total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent fiscal year
is accounted for by domestic companies; and (ii) the main parts of the issuer's business activities are conducted in mainland China,
or its main place(s) of business are located in mainland China, or the majority of senior management staff in charge of its business
operations and management are PRC citizens or have their usual place(s) of residence located in mainland China. Where an issuer submits
an application for initial public offering to competent overseas regulators, such issuer must file with the CSRC within three business
days after such application is submitted. The Overseas Listing Trial Measures also requires subsequent reports to be filed with the CSRC
on material events, such as change of control, having been investigated or penalized by overseas securities regulatory authorities or
other competent authorities, converting the listing status or listing board, or voluntary or forced delisting of the issuer(s) which
have completed overseas offerings and listings.
In addition, the Overseas Listing Trial Measures
provide that an overseas listing or offering is explicitly prohibited under any of the following circumstances: (i) such securities offering
and listing is explicitly prohibited by provisions in laws, administrative regulations and relevant state rules; (ii) 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; (iii) the domestic company intending to make the securities offering and listing, or its controlling shareholder(s) and the
actual controller, have committed relevant crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining
the order of the socialist market economy during the latest three years; (iv) the domestic company intending to make the securities offering
and listing is currently under investigations for suspicion of criminal offenses or major violations of laws and regulations, and no
conclusion has yet been made thereof; or (v) there are material ownership disputes over equity held by the domestic company's controlling
shareholder(s) or by other shareholder(s) that are controlled by the controlling shareholder(s) and/or actual controller.
At a press conference held for these new regulations,
officials from the CSRC clarified that the domestic companies that have already been listed overseas before the effective date of the
Overseas Listing Trial Measures (i.e. March 31, 2023) shall be deemed as existing issuers, or the Existing Issuers. Existing Issuers
are not required to complete the filling procedures immediately, and they shall be required to file with the CSRC when subsequent matters
such as refinancing are involved. Furthermore, according to the officials from the CSRC, domestic companies that have obtained approval
from overseas regulatory authorities or securities exchanges (for example, a contemplated offering and/or listing on the U.S. stock exchange
has been declared effective) for their indirect overseas offering and listing prior to the effective date of the Overseas Listing Trial
Measures (i.e. March 31, 2023) but have not yet completed their indirect overseas issuance and listing, are granted a six-month transition
period from March 31, 2023. Those who complete their overseas offering and listing within such six months are deemed as Existing Issuers.
Within such six-month transition period, however, if such domestic companies need to reapply for offering and listing procedures to the
overseas regulatory authority or securities exchanges, or if they fail to complete their indirect overseas issuance and listing, such
domestic companies shall complete the filling procedures with the CSRC.
According to the Overseas Listing Trail Measures,
where a PRC domestic company fails to fulfill filing procedure in respect of its overseas offering and listing, the CSRC may order rectification,
issue warnings to such PRC domestic company, and impose a fine ranging from RMB1,000,000 to RMB10,000,000. Also the directly responsible
person-in-charge and other directly responsible persons of such PRC domestic company may be warned and imposed a fine up to RMB 5,000,000,
and the controlling shareholders and the actual controllers of such PRC domestic company that organize or instruct the aforementioned
violations shall be imposed a fine up to RMB10,000,000. Further, if the PRC domestic company that is not an Existing Issuer fails to
fulfill the required filing procedure, such an issuer may ultimately be forced to delist its securities that have already been listed.
In addition, since the Overseas Listing Trial Measures and relevant guidelines were newly promulgated, their interpretation, application
and enforcement remain unclear. Any failure of us to fully comply with the Overseas Listing Trail Measures may significantly limit or
completely hinder our ability to offer or continue to offer our securities, hinder our ability to remain listed on Nasdaq or any other
U.S. securities exchange, cause significant disruption to our business operations, and severely damage our reputation, which would materially
and adversely affect our financial condition and results of operations and cause shares of our Common Stock to significantly decline
in value or become worthless.
52
On February 24, 2023, the CSRC, the Ministry
of Finance, the National Administration of State Secrets Protection and the National Archives Administration jointly issued the
Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic
Companies, or the Confidentiality and Archives Provisions, which will take effective from March 31,2023. The Confidentiality and
Archives Provisions specify that during the overseas issuance of securities and listing activities of domestic enterprises, domestic
enterprises and securities companies and securities service institutions that provide relevant securities services shall, by
strictly abiding by the relevant laws and regulations of the PRC and the requirements therein, establish sound confidentiality and
archives management systems, take necessary measures to implement confidentiality and archives management responsibilities, and
shall not leak national secrets, work secrets of governmental agencies and undermine national and public interests. Work manuscripts
generated in the PRC by securities companies and securities service institutions that provide relevant securities services for
overseas issuance and listing of securities by domestic enterprises shall be kept in the PRC. Without the approval of relevant
competent authorities, it shall not be transferred overseas. Where archives or copies need to be transferred outside of the PRC, it
shall be subject to the approval procedures in accordance with relevant PRC regulations.
REGULATIONS RELATING TO CYBERSECURITY AND
DATA SECURITY
According to the Cybersecurity Law of the PRC
(the "Cybersecurity Law") which was promulgated by the Standing Committee of the National People's Congress of the
PRC (the "SCNPC") on November 7, 2016 and came into effect on June 1, 2017, network operators shall take all necessary
measures in accordance with applicable laws, regulations and compulsory national requirements to safeguard the safe and stable operation
of networks, respond to cybersecurity incidents effectively, prevent illegal and criminal activities, and maintain the integrity, confidentiality
and usability of network data. The Cybersecurity Law also stipulates that the China adopts classified system for cybersecurity protection,
under which network operators are required to fulfil relevant obligations of security protection to ensure that the network is free from
interference, disruption or unauthorized access, and to prevent network data from being disclosed, stolen or tampered.
On September 22, 2020, the Ministry of Public
Security issued the Guiding Opinions on Implementing the Cyber Security Protection System and Critical Information Infrastructure Security
Protection System to further improve the national cyber security prevention and control system. On December 28, 2021, the Cyberspace
Administration of China (the
"CAC"
) and several other government authorities published the Revised Cybersecurity
Review Measures, which came into effect on February 15, 2022 and replaced the previous version. Pursuant to these measures, the purchase
of network products and services by a critical information infrastructure operator or the data processing activities of a network platform
operator that affect or may affect national security will be subject to a cybersecurity review. In addition, network platform operators
with personal information of over one million users shall be subject to cybersecurity review before listing in foreign countries. The
competent governmental authorities may also initiate a cybersecurity review against the operators if the authorities believe that the
network product or service or data processing activities of such operators affect or may affect national security. Article 10 of the
Revised Cybersecurity Review Measures also sets out certain general factors which would be the focus in assessing the national security
risk during a cybersecurity review, including (i) risks of critical information infrastructure being illegally controlled or subject
to interference or destruction; (ii) the harm caused by the disruption of the supply of the product or service to the business continuity
of critical information infrastructure; (iii) the security, openness, transparency and diversity of sources of the product or service,
the reliability of supply channels, and risks of supply disruption due to political, diplomatic, trade and other factors; (iv) compliance
with PRC laws, administrative regulations and departmental rules by the provider of the product or service; (v) the risk of core data,
important data or a large amount of personal information being stolen, leaked, damaged, illegally used, or illegally transmitted overseas;
(vi) the risk that critical information infrastructure, core data, important data or a large amount of personal information being affected,
controlled, and maliciously used by foreign governments for a listing, as well as network information security risks; and (vii) other
factors that may endanger the security of critical information infrastructure, cybersecurity and data security.
On July 30, 2021, the State Council promulgated
the Regulations on Security Protection of Critical Information Infrastructures, which took effect on September 1, 2021 and provide that
"critical information infrastructures" refer to any important network facilities or information systems of important industries
or fields such as public communication and information service, energy, communications, water conservation, finance, public services,
e-government affairs and national defense science, and any other important network facilities or information systems which may endanger
national security, people's livelihood and public interest in case of damage, function loss or data leakage. In addition, relevant
administration departments of each critical industry and sector, or Protection Departments, shall be responsible to formulate eligibility
criteria and determine the critical information infrastructure operator in the respective industry or field. The operators shall be informed
about the final determination as to whether they are categorized as critical information infrastructure operators. The regulations further
require critical information infrastructures operators, among others, (i) to report to the competent Protection Departments in a timely
manner when the identification result may be affected due to material changes in the critical information infrastructures; (ii) to plan,
construct or put into use the security protection measures and the critical information infrastructures simultaneously; and (iii) to
report to the competent Protection Departments in a timely manner in the event of merger division or dissolution, and deal with critical
information infrastructures as required by the competent Protection Departments. Operators in violation of the regulations may be ordered
to rectify, subject to warnings, fines and other administrative penalties or even criminal liabilities, and the directly responsible
personnel in charge may also be imposed on fines or other liabilities.
53
On June 10, 2021, the SCNPC promulgated the Data
Security Law of the PRC (the "
Data Security Law
"), with effect from September 1, 2021. The Data Security Law establishes
a data classification and hierarchical protection system depending on the importance of the data in economic and social development,
and the damage caused to national security, public interests, or the legitimate rights and interests of individuals and organizations
if the data is falsified, damaged, disclosed, illegally obtained or illegally used. Under the Data Security Law, critical information
infrastructure operators shall be subject to the Cybersecurity Law in connection with the cross-border transfer of important data collected
and generated through their operations in China; and the cross-border transfer of important data collected and generated by other data
processors shall be subject to the administrative measures adopted by the CAC in conjunction with other competent departments.
On July 7, 2022, the CAC promulgated the Security
Assessment Measures for Cross-border Data Transfers with effect from September 1, 2022, a data processor shall declare security assessment
for its outbound data transfer if: (i)where a data processor provides critical data abroad;(ii) where a critical information infrastructure
operator or a data processor processing the personal information of more than one million individuals provides personal information abroad;
(iii) where a data processor has provided personal information of 100,000 individuals or sensitive personal information of 10,000 individuals
in total abroad since January 1 of the previous year; and (iv) any other circumstances prescribed by the CAC.
On November 14, 2021, the CAC released the Regulations
for the Administration of Network Data Security (Draft for Comments) (the "
Draft Network Data Security Regulations
").
The Draft Internet Data Security Regulations cover a wide range of internet data security issues, including the supervision and management
of data security in the PRC, and apply to situations using networks to carry out data processing activities. The Draft Network Data Security
Regulations set out general guidelines covering subjects including protection of personal information, security of important data, security
management of cross-border data transmission, obligations of internet platform operators, supervision and management, and legal liabilities
of internet data security. The Draft Network Data Security Regulations also require a data processor to apply to the CAC for cybersecurity
review if it process the personal information of more than one million individuals and goes listing in foreign countries. As of the date
of this Annual Report, the Draft Network Data Security Regulations were released for public comment only, and the provisions and anticipated
adoption or effective date may be subject to change with substantial uncertainty.
REGULATIONS RELATING TO PRIVACY PROTECTION
The Civil Code of the PRC, issued by the National
People's Congress of the PRC on May 28, 2020 and effective from January 1, 2021, provides legal basis for privacy and personal
information infringement claims under the Chinese civil laws.
Criminal Law of the PRC, as amended on December
26, 2020, prohibits institutions, companies and their employees from selling or otherwise illegally disclosing a citizen's personal
information obtained in performing duties or providing services or obtaining such information through theft or other illegal ways.
According to the Personal Information Protection
Law of the PRC which was promulgated by the SCNPC on August 20, 2021 and came into effect on November 1, 2021, personal information shall
be handled in accordance with the principles of lawfulness, legitimacy, necessity and good faith, and it is not allowed to handle personal
information by misleading, fraud, coercion or otherwise. It creates a range of compliance obligations and sets forth specific requirements
on protection of electronic and non-electronic information which is related to identified or identifiable natural persons.
54
According to the Law of the PRC on the Protection
of Minors (2020 Revision), which was promulgated by the SCNPC on October 17, 2020 and came into effect on June 1, 2021, information processors
shall obtain consent from minors' parents or other guardians when processing personal information of minors under the age of 14
via the internet. In addition, information processors must promptly take measures to correct or delete the personal information of minors
if alerted by the minors, parents or other guardians.
REGULATIONS ON LAND OR PROPERTY USE
In June 1986, the SCNPC promulgated the Land
Administration Law of the PRC, which was last amended on August 26, 2019 and became effective on January 1, 2020. In January 1991, the
State Council published Regulations for Implementation of the Land Administration Law of the PRC which was last amended on July 2, 2021
and came into effect on September 1, 2021. According to the Land Administration Law and its regulations, enterprises and individuals
shall use land strictly in accordance with the purpose stipulated in the land use master plan. Construction entities shall use state-owned
land according to the stipulations of the land use right assignment contract or according to the provisions of the approval documents
relevant to the allocation of land use rights. The conversion of the construction purposes of the land shall receive the consent of the
competent land administrative authority and be submitted to the people's governments that originally granted land use approval.
When changing the purpose of land within urban planning areas, consent shall be obtained from the relevant urban planning administration
department before submission; without such approvals, the use of land specified in the relevant overall land utilization plan shall not
be changed. Under these regulations, failure to comply with the approved usage may subject to fines or other penalties, including potentially
being required by the relevant land administrative authority to return the land.
REGULATIONS RELATING TO LEASING
Pursuant to the Law on Administration of Urban
Real Estate of the PRC which took effect in January 1, 1995 with the latest amendment in August 26, 2019, lessors and lessees are required
to enter into a written lease contract, containing such provisions as the term of the lease, the use of the premises, liability for rent
and repair, and other rights and obligations of both parties. Pursuant to Administrative Measures on Leasing of Commodity Housing which
were promulgated by the Ministry of Housing and Urban-Rural Development on December 1, 2010 and came into effect on February 1, 2011,
the lessor and the lessee shall complete property leasing registration and filing formalities within 30 days from execution of the property
lease contract with competent authority, otherwise individuals or organizations who violate the provision shall be ordered to make correction
within a stipulated period. Where the individual or organization failed to make correction within the stipulated period, a fine shall
be imposed.
REGULATIONS RELATING TO INTELLECTUAL PROPERTY
Regulations on Copyright
Pursuant to the Copyright Law of the PRC (the
"Copyright Law"), which was promulgated by the SCNPC and last amended on November 11, 2020 with effect from June 1, 2021,
creators of protected works enjoy personal and property rights with respect to publication, authorship, alteration, integrity, reproduction,
distribution, lease, exhibition, performance, projection, broadcasting, dissemination via information network, production, adaptation,
translation, compilation and related activities. Under the Copyright Law, the term of protection for copyrighted software is 50 years.
The Regulations on the Protection of the Right to Communicate Works to the Public over Information Networks, as most recently amended
on January 30, 2013, provide specific rules on fair use, statutory license, and a safe harbor for use of copyrights and copyright management
technology and specify the liabilities of various entities for violations, including copyright holders, libraries and internet service
providers. The Computer Software Copyright Registration Measures, promulgated by the National Copyright Administration on February 20,
2002, regulate registrations of software copyrights, exclusive licensing contracts for software copyrights and assignment agreements.
The National Copyright Administration administers software copyright registration and the Copyright Protection Center of China are designated
as the software registration authority. The Copyright Protection Center of China grants registration certificates to the computer software
copyrights applicants which meet the relevant requirements.
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Regulations on Trademark
Pursuant to the Trademark Law of the PRC, which
was promulgated by the SCNPC and last amended on April 23, 2019 with effect from November 1, 2019, registered trademarks refer to trademarks
that have been approved and registered by the Trademark Office of China National Intellectual Property Administration. Trademark registrants
enjoy an exclusive right to use the trademark, which shall be protected by law. The initial effective term of a registered trademark
is ten years and will be granted another ten-year effective term upon request after expiration of the first or any renewed ten-year term.
As with patents, the Trademark Law has adopted
a first-to-file principle with respect to trademark registration. If a trademark applied for is identical or similar to another trademark
which has already been registered or subject to a preliminary examination and approval for use on the same or similar kinds of products
or services, such trademark application may be rejected. Any person applying for the registration of a trademark may not injure existing
trademark rights first obtained by others, nor may any person register in advance a trademark that has already been used by another party
and has already gained a "sufficient degree of reputation" through such party's use.
Regulations on Patent
Pursuant to the Patent Law of the PRC, which
was promulgated by the SCNPC and last amended on October 17, 2020 with effect from June 1, 2021, after the grant of the patent right
for an invention, utility model, or design, unless otherwise provided thereunder, no entity or individual may, without the authorization
of the patent owner, infringe the patent. A patent is valid for a twenty-year term in the case of an invention, a fifteen-year term in
the case of a design, and a ten-year term in the case of a utility model, starting from the application date.
Regulations on Domain Name
Pursuant to the Administrative Measures for Internet
Domain Names, which were promulgated by the MIIT on August 24, 2017 with effect from November 1, 2017, the registration of domain names
adopts the "first to file, first to register" principle and the registrant shall complete the registration via the domain
name registration service institutions.
REGULATIONS RELATING TO LABOR PROTECTION
Pursuant to the Labor Law of the PRC, which was
promulgated by the SCNPC on July 5, 1994 and most recently amended on December 29, 2018, an employer shall establish a comprehensive
management system to safeguard the rights of its employees, including developing and improving its labor safety and health system, stringently
implementing national protocols and standards on labor safety and health, conducting labor safety and health education for workers, guarding
against labor accidents and reducing occupational hazards. An employer must provide employees with the necessary labor protection equipment
that comply with labor safety and health conditions stipulated under national regulations, as well as provide regular check-ups for workers
that engage in operations with occupational hazards.
The Labor Contract Law of the PRC, which was
promulgated by the SCNPC on June 29, 2007 and became effective on January 1, 2008, and was amended on December 28, 2012, and the Implementation
Regulations on Labor Contract Law of the PRC, which were promulgated and became effective on September 18, 2008, regulate employer and
employee relations and contain specific provisions on the terms of the labor contract. Labor contracts must be made in writing. An employer
may legally terminate a labor contract and dismiss its employees after reaching agreement upon due negotiations with the employee or
by fulfilling the statutory conditions. Employers in most cases are also required to provide severance payment to their employees after
their employment relationships are terminated. In addition, if an employer intends to enforce a non-compete provision in an employment
contract or non-competition agreement with an employee, it has to compensate the employee on a monthly basis during the term of the restriction
period after the termination or expiry of the labor contract.
Moreover, all PRC enterprises are generally required
to implement a standard working time system of eight hours a day and forty hours a week, and if the implementation of such standard working
time system is not appropriate due to the nature of the job or the characteristics of business operation, the enterprise may implement
a flexible working time system or comprehensive working time system after obtaining approvals from the relevant authorities.
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Pursuant to the Social Insurance Law of the PRC,
the Interim Regulations on the Collection and Payment of Social Insurance Premiums, the Regulations on Work Injury Insurance, the Regulations
on Unemployment Insurance, the Trial Measures on Employee Maternity Insurance of Enterprises, enterprises in China are required by PRC
laws and regulations to participate in certain employee benefit plans, including social insurance funds, namely a pension plan, a medical
insurance plan, an unemployment insurance plan, a work-related injury insurance plan and a maternity insurance plan, and contribute to
the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of the employees as specified by the
local government from time to time at locations where they operate their businesses or where they are located. According to the Social
Insurance Law, an employer that fails to make social insurance contributions may be ordered to rectify the non-compliance and pay the
required contributions within a stipulated deadline, and may be subject to a late payment fine at a daily rate of 0.05% of the outstanding
amount, accruing from the date when the social insurance contributions were due and a fine equal to one to three times the outstanding
amount.
According to the Regulations on the Administration
of Housing Provident Fund, which were promulgated by the State Council and last amended on March 24, 2019, employers are required to
contribute to housing provident funds for the benefit of their employees. According to the Regulations on the Administration of Housing
Provident Fund, an enterprise that fails to make housing fund contributions may be ordered to rectify the noncompliance and pay the required
contributions within a stipulated deadline; if the enterprise fails to rectify the non-compliance with the stipulated deadline, it be
may be made to a local court for compulsory enforcement. In addition, an enterprise that fails to undertake contribution registration
of housing provident fund or fails to go through the formalities of opening housing provident fund accounts for its employees may be
ordered to rectify the noncompliance within a stipulated deadline, where failing to rectify the non-compliance at the expiration of the
time limit, it be may be subject to a fine ranging from RMB10,000 or RMB 50,000.
REGULATIONS RELATED TO TAXATION
Regulations on Income Tax
We and our subsidiaries
may be subject to tax in the jurisdictions in which we are organized or operate, reducing the amount of our net income and cash flows,
including cash available for dividend payments. Under current Marshall Islands law, there is no income, corporate or profits tax or withholding
tax, capital gains tax or capital transfer tax, estate or inheritance tax payable by us or our stockholders, other than stockholders
ordinarily resident in the Republic of the Marshall Islands, if any. We believe that we should not be subject to tax under the laws of
various countries, other than the United States, in which our subsidiaries' vessels conduct activities or in which our subsidiaries'
customers are located. However, our belief is based on our understanding of the tax laws of those countries, and our tax position is
subject to review and possible challenge by taxing authorities and to possible changes in law or interpretation. We cannot determine
in advance the extent to which certain jurisdictions may require us to pay corporate income tax or to make payments in lieu of such tax.
In addition, payments due to us from our subsidiaries' customers may be subject to tax claims. In computing our tax obligation
in these jurisdictions, we may be required to take various tax accounting and reporting positions on matters that are not entirely free
from doubt and for which we have not received rulings from the governing authorities. We cannot assure you that upon review of these
positions the applicable authorities will agree with our positions. A successful challenge by a tax authority could result in additional
tax imposed on us or our subsidiaries, further reducing the cash available for distribution. In addition, changes in our operations or
ownership could result in additional tax being imposed on us or our subsidiaries in jurisdictions in which operations are conducted.
Enterprise Income Tax Law
According to the Enterprise Income Tax Law of
the PRC, which was promulgated by the SCNPC and last amended on December 29, 2018, and the Implementation Rules to the Enterprise Income
Tax Law of the PRC, which were promulgated by the State Council and last amended on April 23, 2019, enterprises are classified as either
resident enterprises or non-resident enterprises. The income tax rate for resident enterprises, including both domestic-invested and
foreign-invested enterprises, shall typically be 25%. Non-resident enterprises which have not established agencies or offices in China,
or which have established agencies or offices in China but whose income has no association with such agencies or offices shall pay enterprise
income tax on its income deriving from inside China at the reduced rate of 10%.
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According to the Circular of Printing the Administrative
Measures for Recognition of High-Tech Enterprises amended by the Ministry of Science and Technology, Ministry of Finance and State Taxation
Administration on January 29, 2016 and came into effect since January 1, 2016, upon the accreditation of the qualification of High-tech
enterprises, such enterprises may apply for the entitlement of the preferential enterprise income tax treatment since the current year
beginning from the valid period approved by the accreditation. A High and New Technology Enterprise is entitled to a favorable statutory
tax rate of 15% and such enterprise should keep all statutory required relevant materials in case of future inspection. This qualification
is reassessed by relevant government authorities every three years.
According to the Notice on the Implementation
of Inclusive Tax Concessions for Small and Micro Enterprises which took effect on January 1, 2019, jointly issued by the Ministry of
Finance and the State Taxation Administration, for the portion of annual taxable income which does not exceed RMB1,000,000, the annual
taxable income shall be deducted to 25% and the income tax shall be calculated at the rate of 20%; for the portion of annual taxable
income from RMB1,000,000 to RMB3,000,000, the taxable income shall be deducted to 50% and the income tax shall be calculated at the rate
of 20%, for the period from January 1, 2019 to December 31, 2021. The above-mentioned small and micro-enterprises refer to those enterprises
that are engaged in industries not restricted or prohibited by the state and meet certain conditions, including annual taxable income
not exceeding RMB3,000,000, number of employees not exceeding 300, and total assets not exceeding RMB50,000,000. In 2021, the Ministry
of Finance and State Taxation Administration issued the Notice on the Implementation of Preferential Income Tax for Small and Micro Enterprises
and Individual Entrepreneurs, which provides a 50% reduction in corporate income tax for small and micro enterprises with annual taxable
income not exceeding RMB1,000,000, on top of the preferential policies stipulated in the Notice on the Implementation of Inclusive Tax
Concessions for Small and Micro Enterprises, for the period from January 1, 2021 to December 31, 2022. In 2022, the Ministry of Finance
and the State Taxation Administration issued the Notice on the Further Implementation of Preferential Income Tax for Small and Micro
Enterprises, according to which the annual taxable income shall be deducted to 25% and the income tax shall be calculated at the rate
of 20% for small and micro enterprises with annual taxable income from RMB1,000,000 to RMB3,000,000, on top of the preferential policies
stipulated in the Notice on the Implementation of Inclusive Tax Concessions for Small and Micro Enterprises for the period from January
1, 2022 to December 31, 2024.
Regulations on Value-added Tax
According to the Provisional Regulations of the
PRC on Value-added Tax which were promulgated by the State Council on December 13, 1993 and last amended on November 19, 2017, and the
Implementation Rules for the Provisional Regulations the PRC on Value-added Tax, which were promulgated by the Ministry of Finance on
December 25, 1993, and last amended on October 28, 2011, all taxpayers selling goods, providing processing, repair or replacement services,
selling services, intangible properties or immovable properties within the China or importing goods to the China shall pay value-added
tax.
REGULATIONS RELATING TO FOREIGN EXCHANGE AND
DIVIDEND DISTRIBUTION
Regulations on Foreign Exchange
The fundamental regulation governing foreign
exchange in China is the Foreign Exchange Administration Rules of the PRC (the "Foreign Exchange Administration Rules"),
promulgated by the State Council on January 29, 1996 and most recently amended on August 5, 2008. Under these rules, Renminbi is generally
freely convertible for payments of current account items, such as trade and service-related foreign exchange transactions and dividend
payments, but not freely convertible for capital account items, such as direct investment, loan or investment in securities outside China,
unless a prior approval of the State Foreign Exchange Administration of the PRC (the "SAFE") or its local counterparts is
obtained.
Pursuant to the Circular of the State Administration
of Foreign Exchange on Further Promoting the Reform of Foreign Exchange Administration and Improving the Examination of Authenticity
and Compliance, which was promulgated by SAFE on January 26, 2017, a foreign-invested enterprise may pay dividends to its foreign direct
investors through the financial institutions without the approval of SAFE; the bank shall check the relevant documents under the principle
of authenticity.
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According to the Circular on the Management of
Foreign Exchange Control on Offshore Investment and Financing and Round Trip Investment by Domestic Residents through Special Purpose
Vehicles (the "SAFE Circular 37") which was promulgated by SAFE on July 4, 2014 with effect from the same day, domestic residents
shall register with the local branch of SAFE for foreign exchange registration of overseas investment before contributing the domestic
and overseas lawful assets or interests into a special purpose vehicle (the "SPV"), and to update such registration in the
event of any change of basic information of the registered SPV or major changes in the SPV's capital, including increases and decreases
of capital, share transfers, share swaps, mergers or divisions. The SPV is defined as an "offshore enterprise directly established
or indirectly controlled by the domestic resident (including domestic institution and resident individual) with their legally owned assets
and equity of the domestic enterprise, or legally owned offshore assets or equity, for the purpose of investment and financing";
"Round Trip Investment refers to "the direct investment activities carried out by a domestic resident directly or indirectly
via a SPV, i.e., establishing a foreign-invested enterprise or project within the PRC through a new entity, merger or acquisition and
other ways, while obtaining ownership, control, operation and management and other rights and interests".
On February 13, 2015, SAFE promulgated the Circular
of the State Administration of Foreign Exchange on Further Simplifying and Improving the Direct Investment-related Foreign Exchange Administration
Policies (the "
SAFE Circular 13
"), which came into effect on June 1, 2015. According to the SAFE Circular 13, the
initial foreign exchange registration for establishing or taking control of a SPV by domestic residents can be conducted with a qualified
bank, instead of a local branch of SAFE. The SAFE Circular 13 simplifies some procedures relating to foreign exchange for direct investments.
On March 30, 2015, SAFE promulgated the Circular on Reforming of the Management Method of the Settlement of Foreign Currency Capital
of Foreign-Invested Enterprises (the "
SAFE Circular 19
"), which came into effect from June 1, 2015. According to the
SAFE Circular 19, the foreign exchange capital of foreign-invested enterprises shall be subject to the Discretional Foreign Exchange
Settlement (the "
Discretional Foreign Exchange Settlement
"). The Discretional Foreign Exchange Settlement refers to
the foreign exchange capital in the capital account of a foreign-invested enterprise for which the rights and interests of monetary contribution
has been confirmed by the local branch of SAFE (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 foreign-invested enterprise. Furthermore, the SAFE Circular 19 stipulates that
the use of capital by foreign-invested enterprises shall follow the principles of authenticity and self-use within the business scope
of enterprises.
On June 9, 2016, SAFE promulgated the Circular
on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts (the "
SAFE Circular
16
"), which came into effect on the same day. Pursuant to the SAFE Circular 16, enterprises registered in the PRC may also
convert their foreign debts from foreign currency to Renminbi on self-discretionary basis. The 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 self-discretionary basis which applies to all enterprises registered in the PRC. The 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.
On October 23, 2019, SAFE issued the Circular
on Further Promoting the Facilitation of Cross- border Trade and Investment (the "
SAFE Circular 28
"), which came into
effect on the same day. The SAFE Circular 28 allows all foreign-invested enterprises to make equity investment in the PRC using their
capital, with genuine investment projects and subject to compliance with the negative list. As of the date of this Annual Report, its
interpretation and implementation in practice are still subject to substantial uncertainties.
Regulations on Dividend Distribution
Distribution of dividends of foreign investment
enterprises are mainly governed by the Foreign Investment Enterprise Law, issued in 1986 and amended in 2000 and 2016, respectively,
and the Implementation Rules under the Foreign Investment Enterprise Law, issued in 1990 and amended in 2001 and 2014, respectively.
Under these regulations, foreign investment enterprises in the PRC may distribute dividends only out of their accumulative profits, if
any, determined in accordance with PRC accounting standards and regulations. In addition, no less than 10% of the accumulated profits
of the foreign investment enterprises in the PRC are required to be allocated to fund certain reserve funds each year unless these reserves
have reached 50% of the registered capital of the enterprises. A PRC company is not permitted to distribute any profits until any losses
from previous fiscal years have been offset. Profits retained from prior fiscal years may be distributed together with distributable
profits from the current fiscal year. Under our current corporate structure, our Marshall Islands holding company may rely on dividend
payments from Hongri PRC, which is a wholly foreign-owned enterprise incorporated in China, to fund any cash and financing requirements
we may have.
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Regulations on Loans by Foreign Companies
to their PRC Subsidiaries
A loan made by foreign investors as shareholders
in a foreign-invested enterprise is considered to be foreign debt in China and is regulated by various laws and regulations, including
the Regulation of the People's Republic of China on Foreign Exchange Administration, the Interim Provisions on the Management of
Foreign Debts, the Statistical Monitoring of Foreign Debts Tentative Provisions (Revised in 2020), the Detailed Rules for the Implementation
of Provisional Regulations on Statistics and Supervision of External Debt, and the Administrative Measures for Registration of Foreign
Debts. Under these rules and regulations, a shareholder loan in the form of foreign debt made to a PRC entity does not require the prior
approval of the SAFE. However, such foreign debt must be registered with and recorded by the SAFE or its local branches within fifteen
business days after entering into the foreign debt contract. Pursuant to these rules and regulations, the balance of the foreign debts
of a foreign-invested enterprise shall not exceed the difference between the total investment and the registered capital of the foreign-invested
enterprise (the "
Total Investment and Registered Capital Balance
").
On January 12, 2017, the People's Bank
of China, promulgated the Notice of the People's Bank of China on Matters concerning the Macro-Prudential Management of Full-Covered
Cross-Border Financing (the "
PBOC Notice No. 9
"). Pursuant to PBOC Notice No. 9, within a transition period of one
year from January 12, 2017, the foreign-invested enterprises may adopt the currently valid foreign debt management mechanism (the "
Current
Foreign Debt Mechanism
"), or the mechanism as provided in PBOC Notice No. 9 (the "
Notice No. 9 Foreign Debt Mechanism
"),
at their own discretions. PBOC Notice No. 9 provides that enterprises may conduct independent cross-border financing in RMB or foreign
currencies as required. Pursuant to PBOC Notice No. 9, the outstanding cross-border financing of an enterprise (the outstanding balance
drawn, here and below) shall be calculated using a risk-weighted approach, and shall not exceed certain specified upper limits. PBOC
Notice No. 9 further provides that the upper limit of risk-weighted outstanding cross-border financing for enterprises shall be equal
to 200% of its net assets multiplied by macro-prudential regulation parameter. The macro-prudential regulation parameter shall be 1.
Enterprises shall file with SAFE in its capital item information system after entering into the relevant cross-border financing contracts
and prior to three business days before drawing any money from the foreign debts.
In March 2020, the PBOC and SAFE issued the Notice
on Adjustments to Comprehensive Macro-Prudential Regulation Parameters for Cross-border Financing, further increasing outstanding cross-border
financing for enterprises to 250% of its net assets. FIEs can choose to calculate their maximum amount of foreign debts based on either
(i) the Total Investment and Registered Capital Balance, or (ii) the Net Asset Limits. In addition, a foreign debt with a term longer
than one year must be filed with the NDRC before the debt issuance, and the issuer shall submit the foreign debt information to the NDRC
within 10 business days from completion of each debt issuance according to the Circular on Promoting the Reform of Filing and Registration
Administrative Regime for the Foreign Debt Issuance by the NDRC. According to the Notice on Adjustments to the Macro-Prudential Adjustment
Parameter for Cross-border Financing of Companies promulgated by the PBOC and SAFE, which took effect on January 7, 2021, the PBOC and
the SAFE decide to lower the macro-prudential adjustment parameter for cross-border financing of companies to 1 from 1.25.
The HFCAA and AHFCAA
As part of a continued regulatory focus in the
United States on access to audit and other information currently protected by national law, in particular China's, on May 20, 2020,
the U.S. Senate passed the HFCAA, which includes requirements for the SEC to identify issuers whose audit work is performed by auditors
that the PCAOB is unable to inspect or investigate completely because of a restriction imposed by a non-U.S. authority in the auditor's
local jurisdiction. The U.S. House of Representatives passed the HFCAA on December 2, 2020, and the HFCAA was signed into law on December
18, 2020. The HFCAA states if the SEC determines that we have filed audit reports issued by a registered public accounting firm
that has not been subject to inspection for the PCAOB for three consecutive years beginning in 2021, the SEC shall prohibit its securities
from being traded on a national securities exchange or in the over-the-counter trading market in the United States.
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On September 22, 2021, the PCAOB adopted a final
rule implementing the HFCAA, which provides a framework for the PCAOB to use when determining, as contemplated under the HFCAA, whether
the Board is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because
of a position taken by one or more authorities in that jurisdiction.
On December 16, 2021, the PCAOB issued the Determination
Report which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in:
(1) China of the China or Hong Kong, because of a position taken by one or more authorities in China; and (2) Hong Kong, a Special Administrative
Region and dependency of the PRC, because of a position taken by one or more authorities in Hong Kong. Our auditor, Onestop, is a Singapore-based
independent accounting firm that is registered with the PCAOB and can be inspected by the PCAOB, and is subject to laws pursuant to which
the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. The PCAOB currently has access
to inspect the working papers of our auditor. We have no intention of dismissing Onestop in the future or of engaging any auditor not
subject to regular inspection by the PCAOB.
On August 26, 2022,
the PCAOB announced and signed a Statement of Protocol (the "Protocol") with CSRC and the Ministry of Finance of the People's
Republic of China. The Protocol provides the PCAOB with: (1) sole discretion to select the firms, audit engagements and potential violations
it inspects and investigates, without any involvement of Chinese authorities; (2) procedures for PCAOB inspectors and investigators to
view complete audit work papers with all information included and for the PCAOB to retain information as needed; (3) direct access to
interview and take testimony from all personnel associated with the audits the PCAOB inspects or investigates. On December 15, 2022,
the PCAOB issued a new Determination Report which: (1) vacated the December 16, 2021 Determination Report; and (2) concluded that the
PCAOB has been able to conduct inspections and investigations completely in the PRC in 2022. The December 15, 2022 Determination Report
cautions, however, that authorities in the PRC might take positions at any time that would prevent the PCAOB from continuing to inspect
or investigate completely. As required by the HFCAA, if in the future the PCAOB determines it no longer can inspect or investigate completely
because of a position taken by an authority in the PRC, the PCAOB will act expeditiously to consider whether it should issue a new determination.
Prior to enactment of the AHFCAA, the HFCAA provided
that our securities will be prohibited from trading on any national securities exchange and in the over-the-counter market in the United
States if our auditor cannot continue to be subject to full inspection by the PCAOB for three consecutive years. On December 29, 2022,
the omnibus spending bill was signed into law, which included the enactment of provisions under the AHFCAA to accelerate the timeline
for implementation of trading prohibitions under the HFCAA from three consecutive years to two consecutive years. The termination in
or any restriction on the trading of our securities will significantly limit or completely hinder our ability to offer securities to
investors, or cause such securities to significantly decline in value or become worthless.
Regulations Relating to Product Quality
The principal legal provisions governing product
liability are set forth in the PRC Product Quality Law, which was promulgated in February 1993 by the SCNPC and amended in July 2000
and August 2009.
The PRC Product Quality Law stipulates the responsibilities
and obligations of product sellers and producers. Violations of the PRC Product Quality Law may result in the imposition of fines. In
addition, the seller or producer may be ordered to suspend its operations, and its business license may be revoked. There may also be
criminal liability in serious cases.
According to the PRC Product Quality Law, consumers
or other victims who suffer injury or property losses due to product defects may demand compensation from the manufacturer as well as
the seller. After compensating the consumer, the seller may recover the corresponding amount from the manufacturer if the manufacturer
is responsible for the product defects, and vice versa.
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Regulations Relating to Consumer Protection
The principal legal provisions for the protection
of consumer interests are set forth in the Law of the PRC on Protection of Consumer Rights and Interests, or the Consumer Protection
Law, which was promulgated in October 1993 amended in October 2013. The Consumer Protection Law sets forth standards of behavior that
businesses must observe in their dealings with consumers.
Violations of the Consumer Protection Law may
result in the imposition of fines. In addition, the violating entity may be ordered to suspend its operations, and its business license
may be revoked. There may also be criminal liability in serious cases.
According to the Consumer Protection Law, if
the legal rights and interests of a consumer are violated during the purchase or use of goods, the consumer may seek compensation from
the seller. If the manufacturer or an upstream distributor is responsible, after compensating the consumer, the seller may recover the
corresponding amount from the manufacturer or the upstream distributor. Consumers or other persons who suffer personal injury or property
damages due to defects in products may seek compensation from the manufacturer as well as the seller. After compensating the consumer,
the seller may recover the corresponding amount from the manufacturer if the manufacturer is responsible for the product defects, and
vice versa.
Regulations Relating to Environmental Matters
Our facilities are subject to various governmental
regulations related to environmental protection. We use a myriad of chemicals in our operations and produce emissions that could pose
environmental risks. Our manufacturing facilities are subject to various pollution control regulations with respect to noise, water and
air pollution and the disposal of waste and hazardous materials, including, China's Environmental Protection Law, Law of the People's
Republic of China on Appraising of Environment Impacts, China's Law on the Prevention and Control of Water Pollution and its implementing
rules, China's Law on the Prevention and Control of Air Pollution and its implementing rules, China's Law on the Prevention
and Control of Solid Waste Pollution, and China's Law on the Prevention and Control of Noise Pollution. We are subject to periodic
inspections by local environmental protection authorities.
We did not incur material costs in environmental compliance in fiscal
years 2022, 2021 and 2020. We believe we are in material compliance with the relevant PRC environmental laws and regulations. We are not
currently subject to any pending actions alleging any violations of applicable PRC environmental laws.
Regulations on Stock Incentive Plans
The State Administration of Foreign Exchange
promulgated the Notice on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive
Plan of Overseas Publicly Listed Company, or the Stock Incentive Plan Notice, in February 2012, replacing the previous rules issued by
the State Administration of Foreign Exchange in March 2007. Pursuant to the Stock Incentive Plan Notice and other relevant rules and
regulations, PRC residents participating in stock incentive plan in an overseas publicly-listed company are required to register with
the State Administration of Foreign Exchange or its local branches and follow certain other procedures. Participants of a stock incentive
plan who are PRC residents must conduct the registration and other procedures with respect to the stock incentive plan through a qualified
PRC agent, which could be a PRC subsidiary of the overseas publicly listed company or another qualified institution appointed by the
PRC subsidiary. In addition, the PRC agent is required to update the relevant registration should there be any material change to the
stock incentive plan, the PRC agent or other material changes. The PRC agent must, on behalf of the PRC residents who have the right
to exercise the employee stock options, apply to the State Administration of Foreign Exchange or its local branches for an annual quota
for the payment of foreign currencies in connection with the PRC residents' exercise of the employee stock options. The foreign
exchange proceeds received by the PRC residents from the sale of shares under the stock incentive plans granted and dividends distributed
by the overseas listed companies must be remitted into the bank accounts in the PRC opened by the PRC agents prior to distribution to
such PRC residents.
We have initially adopted an equity incentive
plan in 2018, under which we have the discretion to award incentives and rewards to eligible participants. On January 11, 2022, our Board
terminated the initial equity incentive plan and adopted a new equity incentive plan (the "2022 Plan"). On October 26, 2022,
our Board terminated the 2022 Plan, and adopted the New 2022 EIP. We have advised the recipients of awards under our equity incentive
plan to handle relevant foreign exchange matters in accordance with the Stock Incentive Plan Notice. However, we cannot guarantee that
all employee-awarded equity-based incentives can successfully register with SAFE in full compliance with the Stock Incentive Plan Notice.
See "Risk
Factors—Risks Related to Doing Business in China—
62
C. Organizational
Structure
See "—A.
History and Development
of the Company—Corporate Structure
" above for details of our current organizational structure.
D. Property,
Plants and Equipment
ITEM 4A. UNRESOLVED STAFF COMMENTS
Not required.
ITEM 5. OPERATING AND
FINANCIAL REVIEW AND PROSPECTS
From 2022, we disposed menswear business and operate
tourism business, which can be further divided into three segments, which are air-tickets and other tourism services, Software Solution
for Tourism Cross-border operation and tourism(cross-board) merchandise products sales.
The Company's non-menswear business operation,
which includes tourism cross-border merchandize, technology and tourism services, commenced in fourth quarter of 2020 as result of acquisition
of Flower Crown Holding. The non-menswear business in 2020 includes packaged travel service and cross-board merchandise, which generate
a revenue of $1,335,443. During 2021, the Company started airline tickets business to enhance its tourism supplying network and capability.
In 2022, the Company disposed menswear business, the comparative operating results excluded the menswear business into discontinued operation.
Recent Developments
The impact of the COVID-19 pandemic on the Company's
business has been severe, widespread and continues to evolve. The recent COVID-19 pandemic adversely affected many businesses in China.
China implemented nationwide efforts to contain the spread of the novel coronavirus, particularly. during 2021 and 2022, when the most
severe additional lockdowns were implemented, including lockdowns in Hainan Island. These lockdowns had a significant impact on our operations,
particularly on Hainan Island, where we are based. As a result of the lockdown on Hainan Island, Chinese customs were closed, preventing
the sanitization and inspection of imported products for potential COVID-19 contamination. This effectively halted our cross-border operations.
The global spread of COVID-19 also affected our sales. This growth in revenue, especially revenues from our tourism business, has been
adversely impacted by COVID-19 pandemic at various times during 2021 because of government-enforced lockdowns.
On April 8, 2021, we offered and sold to a single
accredited investor 1,500,000 shares of our newly-designated Series A Preferred in a transaction exempt from registration requirements
of the Securities Act pursuant to Rule 506(b) of Regulation D. On April 25, 2022, we filed the Certificate of Designation of Series A
Preferred with the Registrar of Corporations; on April 27, 2022 we filed the First Amended and Restated Certificate of Designation of
Series A Preferred, and on May 10, 2022, we filed the Second Amended and Restated Certificate of Designation of Series A Preferred. As
stated in the Second Amended and Restated Certificate of Designation of Series A Preferred, all shares of Common Stock issuable upon conversion
of the Series A Preferred are subject to a two-year lock-up agreement running from the date of the sale. On May 11, 2022, 260,000 shares
of the Series A Preferred were converted into 26,000 shares of our Common Stock without additional consideration.
63
On March 12, 2021, we announced the authorization
and declaration of a dividend distribution of one right (a "Right") for each outstanding share of Common Stock of the Company
to stockholders of record as of the close of business on March 31, 2021 (the "Record Date"). Each Right entitles the registered
holder to purchase from the Company one 0.00667 portion of a share of Series B Participating Preferred Stock of the Company at an exercise
price of $50.00 (the "Exercise Price"). The complete terms of the Rights are set forth in a Preferred Stock Rights Agreement
(the "Rights Agreement"), dated as of March 11, 2021, between the Company and American Stock Transfer & Trust Company,
LLC, as rights agent.
Our Board of Directors adopted the Rights Agreement
to protect stockholders from coercive or otherwise unfair takeover tactics. In general terms, it works by imposing a significant penalty
upon any person or group that acquires 15% or more of the Company's Common Stock without the approval of the Board. As a result,
the overall effect of the Rights Agreement and the issuance of the Rights may be to render more difficult or to discourage a merger, tender
or exchange offer or other business combination involving the Company that is not approved by the Board. However, neither the Rights Agreement
nor the Rights should interfere with any merger, tender or exchange offer or other business combination approved by our Board.
On September 3, 2021, we offered and sold an aggregate
of 150,000 of Series C Convertible Preferred Stock ("Series C") for aggregate proceeds of $1,500,000 to our Chief Executive
Officer.
On November 1, 2021, we offered and sold an aggregate of 100,000 shares
of Series D Preferred to the accredited investor for the aggregate proceed of $3,900,000. On May 2, 2022, the investor converted 20,000
shares of Series D Preferred into 26,000 shares of Common Stock without additional consideration.
On April 9, 2022, the Company dismissed its independent
registered public accounting firm, WWC, P.C. The Board of Directors of the Company approved the dismissal of WWC, P.C. and approved the
engagement of Onestop Assurance PAC as our independent registered public accounting firm, to audit the Company's financial statements
for the year ended December 31, 2021, in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission (the "SEC") for foreign private issuers and the PCAOB.
On October 19, 2022, the Company entered into
a stock purchase agreement and closed the transaction, resulting in the Company's sale of 20,000 shares of common stock (the "Shares")
of Hongri International , constituting all of the issued and outstanding capital stock of Hongri International, to the Purchaser, in consideration
for $10,000,000. Prior to the closing of the Sale and Purchase Transaction (the "Closing"), Hongri was a wholly-owned subsidiary
of the Company through which the Company operated its menswear business. As a result, the Company disposed the whole menswear business
thereon.
64
A.
Operating Results
Our operating results are primarily affected by
the following factors:
●
Our ability to maintain
and expand our brand portfolio or maintain and enhance our brand recognition,
We mainly depend on our brand portfolio to scale
our business, attract and retain our brand partners and customers. Our Luxventure portfolio seamlessly connected various brands from
our suppliers. Although we have devoted significant resources to and incurred large amount of expenses on sourcing, maintaining, promoting
and expanding our brands, we cannot assure you that these efforts will be successful. In addition, maintaining and enhancing the recognition
of our brands are also key to our success, which could be affected by various factors, including the effectiveness of our brand marketing
strategy, publicity about our business, quality of products offered under the brands as well as preference of consumers, certain of which
are beyond our control. Any failure to maintain and expand our brand portfolio or maintain and enhance our brand recognition could have
a material and adverse effect on our business, results of operations and prospects.
Flexibility and sustainability
of our product supply chain.
Our success largely depends on our ability to consistently gauge customers' tastes and market
trends, provide a balanced assortment of merchandize and source brands that satisfies customer demands in a timely manner. Our failure
to anticipate, identify or react appropriately and timely to changes in customer preferences, tastes and market trends or economic conditions
could lead to, among other things, missed opportunities, excess inventory or inventory shortages, markdowns and write-offs, all of which
could negatively impact our profitability. In addition, failure to respond to changing customer preferences and trends in brand could
negatively impact our brand image with our customers and result in diminished brand loyalty, and thus harm the prospects of our business.
The ability to develop, upgrade and apply our technologies
to support and expand our business.
We rely on our technology infrastructure and operating systems to carry out the key aspects
of our business, including identifying market trends in brands, selecting and partnering with quality brand partners, assisting in product
designs for our private label brands, forecasting customers' demands, supporting our product supply chain, enabling effective marketing
and distribution, and refining customer services. We use third party social media platforms to promote our products. If we are unable
to leverage third party social media platforms to effectively attract followers and convert them into active buyers, if there is any
change, disruption or discontinuity in the features and functions of such social media platforms, our ability to acquire new consumers
and our financial condition may suffer.
65
Financial Statement Presentation
In December 2020, the Company acquired Flower
Crown, which at the time, contributed two new segments, tourism cross-border merchandize sales and tourism. Flower Crown add Technology
Solution for Tourism Cross-border operation segment in 2022. In October 2022, the Company disposed the whole menswear business segment,
which was presented as discontinued operation as set out below.
Revenue.
During the periods covered
by this section, we generated revenue from a) sales of tourism cross-border merchandize, b) sales of Software Solution for Tourism Cross-border
operation , and c) tourism products, which covers tourism package and airline ticket sale (including related services).
Cost of sales.
Cost of sales for non-menswear
business primarily consisted of (a) the purchased costs of products online sold in connection with the revenue from cross-border merchandize,
(b) the cost to purchase tourism supply up front and cancelling cost if any, and (c) the cost for outsourcing the travelling work to certain
travel agencies
Gross profit and gross margin.
For
the periods covered by this section, our gross profit is equal to the difference between our net sales and cost of sales. Our gross margin
is equal to the gross profit divided by net sales.
Administrative expenses.
For the periods
covered by this section, general and administrative expenses consisted primarily of compensation and benefits to our general management,
finance and administrative staff, rental costs, office supplies, utilities, and other expenses incurred in connection with general operations.
Comparison of Fiscal Years Ended December
31, 2022, 2021, and 2020
The following table sets forth key components
of our results of operations, for the years ended December 31, 2022, 2021, and 2020, both in U.S. dollars and as a percentage of or revenue.
Year ended
December 31, 2022
Year ended
December 31, 2021
Year ended
December 31, 2020
Amount
% of
Sales
Amount
% of
Sales
Amount
% of
Sales
Revenue
79,874,727
54,040,948
1,335,374
Cost of sales
(78,410,244
)
-98
%
(53,193,237
)
-98
%
(1,168,808
)
-88
%
Gross profit (loss)
1,464,483
2
%
847,711
2
%
166,566
12
%
Operating expenses
0
0
Distribution and selling expenses
(721,388
)
-1
%
(1,353,843
)
-3
%
-
0
%
Administrative expenses
(56,043,741
)
-70
%
(6,858,210
)
-13
%
(1,164,981
)
-87
%
Total operating expenses
(56,765,129
)
-71
%
(8,212,053
)
-15
%
(1,164,981
)
-87
%
Other income
16,636
0
%
34,793
0
%
3,122
0
%
Other gains and losses
(98,650
)
0
%
(17,325
)
0
%
-
0
%
Loss before tax
(55,382,660
)
-69
%
(7,346,874
)
-14
%
(995,293
)
-75
%
Income tax
(621
)
0
%
(5,495
)
0
%
-
0
%
Loss from continuing operations
(55,383,281
)
-69
%
(7,352,369
)
-14
%
(995,293
)
-75
%
Discontinued operations
(18,109,150
)
-8
%
(29,863,116
)
-55
%
(4,672,124
)
-350
%
Total Loss for the year
(73,492,431
)
-78
%
(37,215,483
)
-69
%
(5,667,417
)
-424
%
66
Flower Crown is a subsidiary operating three sub-segment
business, which are tourism (Luxury travel experiences), cross-border merchandise and B2B technology solution. The consolidated financial
statements for the year ended December 31, 2020 includes 1 month operation result of Flower Crown. The three sub-segments are presented
as below:
Tourism
Technology
Cross border
merchandize revenue
For the year ended
December 31,
For the year ended
December 31,
For the year ended
December 31,
By business
2022
2021
2020
2022
2021
2020
2022
2021
2020
Sales to external customers
79,092,342
51,818,166
991,929
782,302
-
-
83
2,222,782
343,445
Segment revenue
79,092,342
51,818,166
991,929
782,302
-
-
83
2,222,782
343,445
Segment gross margins/(loss)
704,391
541,889
96,578
760,028
-
-
64
305,822
69,988
Gross margin rate
1
%
1
%
9.7
97
%
-
-
77
%
13.7
%
20.3
In 2022, the total revenue increased to $79.87
million by 47.80% from $54.0 million in 2021. The increase mainly due to the reason that the airline tickets business started in 2021
only included 7 month of operation result in 2021, while the revenue in 2022 is a full year. The increase in revenue of tourism segment
is due to the same reason.
In 2022, the revenue of technology segment generated
$782,302 compared to zero in previous years due to our self-developed B2B technology solution for tourism cross-board merchandize were
accepted by small players, which are not able to develop the system by themselves.
In 2022, the revenue of Cross board merchandise
segment decreased to $83, by $2,222,699 or 99.9% from $2,222,782 in 2021. The decrease is mainly due to our efforts and strategy shift
to find other profitable sub-segments in 2022 and China's continuing lock-down enforcement of Covid-19 policy, which resulted in
less products sales in 2022.
In 2021, the total revenue of tourism segment
increased to $51.82 million by 5082% from $1.0 million in 2020. The increase mainly due to following factors: 1) the revenue in 2020 only
included 1 month of operation result of Flower Crown; and 2) Flower Crown started its airline tickets business in 2021, which contributed
a revenue of $51.20 million.
In 2021, the revenue for cross-border merchandise
sub-segment increase to $2.2 million by 547% from $0.34 million in 2020. The increase of revenue is mainly due to the reason that the
revenue in 2020 only included 1 month of operation result. If compared to the projected result of 2020's revenue, the revenue for
cross-border merchandise sub-segment in 2021 decreased by 46%.
67
Cost of sales and gross profit rate
Cost of sales primarily consisted of (a) the purchased
costs of products sold in connection with the revenue from cross-border merchandize, (b) the cost to purchase tourism supply up front
and cancelling cost if any, and (c) the cost for outsourcing the travelling work to certain travel agencies.
Our cost of sales increased from $53.19 million
in year 2021 to $78.41 million in year 2022. The increase was mainly due to the increase of cost in connection with the increasing tourism
segment's revenue in year 2022 compared to 2021.
The gross profit ratio increased slightly from
1.6% in 2021 to 1.8% in 2022, which is mainly due to the reason that the suppliers offered to the Company lower purchase prices as compared
to 2021 due to larger and more stable volume of purchase. The gross profit ratio of technology sub-segment in 2022 achieved 97% due to
the reason that most of the revenue in 2022 of this sub-segments was contributed to self-developed cross-board related software sold to
customers and the developing costs of the software was recorded as general and administrative expenses in 2022 or prior years.
Our cost of sales increased from $1.17 million
in year 2020 to $53.19 million in year 2021. The increase was mainly due to the increase of cost in connection with the increasing travel
segment's revenue in year 2021 compared to 2020.
The gross profit rate decreased from 12% in year
2020 to 2% in year 2021 due to the reason that the new business of airline tickets with gross margin at 1% which contributed $51.2 million
or 94.8% of total revenue in 2021. The Company's strategy is to build up tourism supply chain network so that can be a tailored
one-stop tourism online platform eventually. As a result, a competitive supply resources, including the airline tickets, are essential
to the strategy. To reach such goal, the Company connected to different airlines and tried to create more transaction volume in order
to achieve a higher discount rates from the airline companies. As a result, the gross margin for this sector may be higher once the volume
is higher enough or more overseas airline tickets can be sold once Covid-19 impact to tourism is reduced.
Administrative expenses
Administrative expenses increased by $49.19 million
or 717.2% to $56.04 million for year 2022 from $6.86 million for year 2021. The change was mainly due to the increase of the company's
share-based compensation paid to employees, officers and directors of the company in year 2022, which was $53.3 million in 2022 compared
to $4.4 million in 2021, representing an increase of $48.8 million.
Administrative expenses increased by $5.69 million
or 486% to $6.86 million for year 2021 from $1.17 million for year 2020. The change was mainly due to 1) increase of the company's
share-based compensation paid to vendors, employees, officers and directors of the company in year 2021; and 2) increase of such expenses
for Flower Crown's business by $2.09 million or 1300% compared to $0.15 million in 2020 for 1 month's operation result.
68
Distribution and selling expenses
The selling and distribution expenses decreased
by $0.63 million or 46% to $0.72 million for the year ended December 31, 2022 from $1.35 million for the year ended December 31, 2021,
primarily due to the reason that in 2021, the Company outsourced certain sales functions to third parties, while in middle of 2022, the
Company fully executed the sales functions by its own team, which reduced the outsourced expenses significantly.
The selling and distribution expenses increased
by $1.35 million to $1.35 million for the year ended December 31, 2021 from nil for the year ended December 31, 2020, primarily due to
the reason that the selling and distribution expenses in 2020 only include 1 month's operation result of the two segments and no
selling or distribution expenses was incurred during the last month of 2020.
Profit for the year
We had a loss of $73.5 million in 2022 as compared
to a loss of $37.2 million in 2021, representing an increase of loss of $36.3 million or 97%. Net margin was -93% for the year ended December
31, 2022, compared to -69% for the year ended December 31, 2021.
We had a loss of $37.2 million in 2021 as compared
to a loss of $5.7 million for 2020, representing an increase of loss of $31.5 million or 557%. Net margin was -69% for the year ended
December 31, 2021, compared to -424% for the year ended December 31, 2020.
Loss for the year increased from 2021 to 2022
mainly due to the following reasons: (1) increment expenses for share-based compensations to employees, Directors and managements of $48.8
million; (2) by netting of the decrease of loss on discontinued operations of 11.8 million, presenting a decrease from $29.9 million in
2021 to $18.1 million in 2022.
Loss for the year increased from 2020 to 2021
mainly due to the following reasons: (1) increment expenses for newly started tourism business while the gross profit from the segments
were not able to cover the expenses yet; (2) the increment of discontinued operation loss of $25.2 million, representing an increase from
$4.7 million in 2020 to $29.9 million in 2021.
69
B.
Liquidity and Capital Resources
As of December 31, 2022, we had cash and cash
equivalents of $520,916. Our cash and cash equivalents consist of cash on hand and cash in the banks. As of December 31, 2022, the Company
had a net working capital (defined as total current assets deducted by total current liabilities) deficit of $463,812, accumulated deficit
of $66,080,395, net loss of $62,121,310, and net cash outflows from operating activities of $2,224,308.
The Company's current business remains an
early-stage growth company. The management of the company believes that its operating income, combined with the CEO's commitment to cover
operating expenses through loans, will enable the business to continue its operations. In parallel, the Company's management continually
monitors its capital structure and operating plans and evaluates various potential funding alternatives that may be needed in order to
finance the Company research and development activities, general and administrative expenses and growth strategy. These alternatives include
raising funds through public or private equity markets and either from institutional or retail investors. Although there is no assurance
that, if needed, the Company will be successful with its fundraising initiatives, management believes that the Company will be able to
secure the necessary financing.
Given the above, the accompanying consolidated
financial statements have been prepared assuming the Company will continue as a going concern.
The following table provides detailed information
about our net cash flow for all financial statement periods presented in this report:
Fiscal Year Ended December 31,
2022
2021
2020
Net cash provided by (used in) operating activities
$
(4,957,411
)
$
(7,775,819
)
$
(6,520,790
)
Net cash provided by (used in) investing activities
(9,443,746
)
(3,279,171
)
607,414
Net cash provided by (used in) financing activities
2,220,098
6,958,971
846,854
Net increase (decrease) in cash and cash equivalents
(12,181,059
)
(4,096,019
)
(5,066,462
)
Effects of exchange rate change in cash
(212,939
)
389,643
1,067,274
Cash and cash equivalents at beginning of the period
12,914,914
16,621,290
20,620,478
Cash and cash equivalent at end of the period
$
520,916
$
12,914,914
$
16,621,290
Operating Activities
The net cash provided by operating activities
consists of profit before tax, as adjusted by finance costs, change in fair value of warrant liabilities, interest income, shared based
compensation, bad debt allowance, depreciation of property, plant and equipment, amortization of prepaid lease payment and trademark,
amortization of subsidies prepaid to distributors, amortization of prepayment and premiums under operating leases, provision(Reversal)
of inventory obsolescence, provision of impairment loss in prepayments, loss(gain) on disposal of property, plant and equipment, deferred
income tax, which include trade and other receivables, prepayment and deferred expenses, inventory, trade and other payables.
70
Net cash used in operating activities in fiscal year 2022 was $5.0
million, compared with net cash used in operating activities of $7.78 million in the year ended December 31, 2021. The cash outflow in
2022 is mainly resulted from net loss of $73.5 million and gain on disposal of subsidiary of $2.2 million, by netting off stock-based
compensation of $53.3 million, loss on disposal of subsidiaries of $9.2 million, bad debt provision of $5.0 million, depreciation of $0.7
million and other working capital changes effects.
Net cash used in operating activities in fiscal
year 2021 was $7.78 million, compared with net cash used in operating activities of $6.5 million in the year ended December 31, 2020.
The cash outflow in 2021 is mainly resulted from net loss of $37.2 million by netting off bad debt provision and impairment of $9.0 million,
and stock-based compensation of $4.4 million, deferred tax assets net decrease of $17.5 million, adding the effect of increase of receivables
of $3.3 million and other working capital changes effects.
Investing Activities
Net cash used in investing activities in fiscal
year 2022 was $12.3 million, compared with $3.3 million net cash used in investing activities in 2021. The net cash used in investing
activities in 2022 mainly resulted from cash decreased due to disposal of discontinued operations.
Net cash used in investing activities in fiscal
year 2021 was $3.3 million, compared with $0.61 million net cash provided by investing activities in 2020. The net cash used in investing
activities in 2021 mainly resulted from acquiring property, plants and equipment of $3.3 million.
Financing Activities
Net cash generated from financing activities in
fiscal year 2022 was $2.22 million, compared with $6.96 million net cash generated in financing activities in 2021.
Net cash generated from financing activities in 2022
represents the proceeds from related parties of $2.2 million.
Net cash generated from financing activities in
fiscal year 2021 was $6.95 million, compared with $0.857 million net cash generated in financing activities in 2020.
Net cash generated from financing activities in 2021
were primarily due to proceeds of US$1,500,000 raised from the sale of our Series A Preferred in April 2021 to a single investor,
US$1,500,000 raised from the sale of our Series C Preferred in September 2021 to our Chief Executive Officer; and $3,900,000 raised from
the sale of the Series D Convertible Preferred Stock to a single investor on November 1, 2021. All sale of shares of Preferred Stock were
exempt from the registration requirements of the Securities Act.
71
Loans, Other Commitments, Contingencies
As of December 31, 2022, the Company does not
have any bank loans. As of December 31, 2022, the Company guaranteed a loan to a third party with maximum liability exposure of US$652,293.
We may, however, in the future, require additional
cash resources due to changing business conditions, implementation of our strategy to expand our business or other investments or acquisitions
we may decide to pursue. If our own financial resources are insufficient to satisfy the capital requirements, we may seek to sell additional
equity or debt securities or obtain additional credit facilities. The sale of additional equity securities could result in dilution to
our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating
and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if
at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business
operations and could harm our overall business prospects.
C.
Research and Development, Patents and Licenses, Etc.
Our industry is characterized by rapid technological
change, evolving industry standards and changing customer demands. These conditions require continuous expenditures on product research
and development to enhance existing products create new products and avoid product obsolescence. See Item 3 "Key Information—D.
Risk Factors—If we are unable to develop competitive new products and service offerings our future results of operations could be
adversely affected," —"If we are unable to keep pace with the rapid technological changes in our industry, demand for
our products and services could decline which would adversely affect our revenue," and —"Our technology may become obsolete
which could materially adversely affect our ability to sell our products and services." For a detailed analysis of research and
development costs, see Item 5.A. "Operating Results—Results of Operations—Research and development expenses".
D.
Trend Information
Other than as disclosed elsewhere in this annual
report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2021 that are reasonably
likely to have a material adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause
the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.
E.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements
that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, sales
or expenses, results of operations, liquidity or capital expenditures, or capital resources that are material to an investment in our
securities.
F.
Tabular Disclosure of Contractual Obligations
We have no other material long-term debt, capital
or operating lease or fixed purchase obligations.
72
Inflation
Inflation and changing prices have not had a material
effect on our business, and we do not expect that inflation or changing prices will materially affect our business in the foreseeable
future. However, our management will closely monitor price changes in the Chinese economy and the apparel industry and continually maintain
effective cost controls in operations.
Seasonality
Our business, like that of many retailers, is
seasonal. Historically, we have realized more of our revenue and earnings in the fourth quarter, which includes the majority of the holiday
shopping season, than in any other fiscal quarter.
Critical Accounting Policies
The preparation of financial statements is in
conformity with IFRS as issued by the IASB. It requires the Company's management to make assumptions, estimates and judgments that
affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. The Company
has identified certain accounting policies that are significant to the preparation of Company's financial statements. These accounting
policies are important for an understanding of the Company's financial condition and results of operation. Critical accounting policies
are those that are most important to the portrayal of the Company's financial condition and results of operations and require management's
difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently
uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance
to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management's
current judgments. The Company believes the following critical accounting policies involve the most significant estimates and judgments
used in the preparation of the Company's financial statements.
Revenue recognition
Revenue from contracts with customers
Revenue from contracts with customers is recognized
when control of goods or services is transferred to the customers at an amount that reflects the consideration to which the Company expects
to be entitled in exchange for those goods or services.
When the consideration in a contract includes
a variable amount, the amount of consideration is estimated to which the Company will be entitled in exchange for transferring the goods
or services to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable
that a significant revenue reversal in the amount of cumulative revenue recognized will not occur when the associated uncertainty with
the variable consideration is subsequently resolved. Currently, the Company's contracts do not include such variable amount.
73
When the contract contains a financing component
which provides the customer a significant benefit of financing the transfer of goods or services to the customer for more than one year,
revenue is measured at the present value of the amount receivable, discounted using the discount rate that would be reflected in a separate
financing transaction between the Company and the customer at contract inception. When the contract contains a financing component which
provides the Company a significant financial benefit for more than one year, revenue recognized under the contract includes the interest
expense accreted on the contract liability under the effective interest method. For a contract where the period between the payment by
the customer and the transfer of the promised goods or services is one year or less, the transaction price is not adjusted for the effects
of a significant financing component, using the practical expedient in IFRS 15. Currently, the Company's contract with its customers
do not include financial benefit for more than one year.
Nature and timing of satisfaction of performance
obligations for each of the revenue streams are as follows:
Revenue from the sale of goods
Performance obligation is satisfied at the point
in time when control of the asset is transferred to the customer, generally on delivery and acceptance of the goods. The Company presents
revenues from such transactions on a gross basis in the consolidated statements of comprehensive loss, as the Company acts as a principal
to take inventory risks of these goods.
Revenue from the sale of Tourism Package
Performance obligation is satisfied when the tourism
package is completed, generally when the tour group successfully returned from the tour destination to the place of origination. The Company
presents revenues from such transactions on a gross basis in the consolidated statements of comprehensive loss, as the Company acts as
a principal to provide a package of tourism services and take a full obligation to provide such services even if the suppliers are not
able to deliver service.
Revenue from reselling of airline-ticket
The Company is a reseller of air-ticket, it provides
value add services to its customers including guaranteed flight replacement and other financial benefits. The revenue is recognized when
performance obligation has been satisfied, which could be significantly after the ticket sale. The Company recognizes gross revenue with
an expense from the cost of purchasing from the supplier.
Other income
Interest income is recognized on an accrual basis
using the effective interest method by applying the rate that exactly discounts the estimated future cash receipts over the expected life
of the financial instrument or a shorter period, when appropriate, to the net carrying amount of the financial asset.
74
Rental income is recognized on a time proportion
basis over the lease terms.
Dividend income is recognized when the shareholders'
right to receive payment has been established, it is probable that the economic benefits associated with the dividend will flow to the
Company and the amount of the dividend can be measured reliably.
Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for
their intended use or sale, are added to the cost of those assets until such time as the assets are substantially ready for their intended
use or sale.
All other borrowing costs are recognized in profit
or loss in the period in which they are incurred.
Retirement benefit costs
Pursuant to the relevant regulations of the PRC
government, the Group's subsidiaries located in the PRC participate in a local municipal government retirement benefits scheme (the
"Scheme"), whereby they contribute a prescribed percentage of the basic salaries of their employees to the Scheme to fund
their retirement benefits. Once the Scheme has been funded via contributions by the Group's participating subsidiaries, the local
municipal government takes responsibility for the retirement benefits obligations of all existing and future retired employees of those
subsidiaries located in the PRC; accordingly, the only obligation of the Group with respect to the Scheme is to pay the on-going required
contributions as long as the employees maintain employment with the Group. There are no provisions under the Scheme whereby forfeited
contributions may be used to reduce future contributions. These plans are considered defined contribution plans. The Group has no legal
or constructive obligations to pay further contributions after its payment of the fixed contributions into the pension schemes. Contributions
to pension schemes are recognized as an expense in the period in which the related service is performed.
Taxation
The tax expense for the period comprises current
and deferred tax. Tax is recognized in the income statement, except to the extent that it relates to items recognized in other comprehensive
income or directly in equity. In this case the tax is also recognized in other comprehensive income or directly in equity, respectively.
75
The current income tax charge is calculated on
the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Group operates and generates
taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation
is subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred tax is recognized on temporary differences
between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in
the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax
assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be
available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized
if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets
and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognized for taxable
temporary differences associated with investments in subsidiaries, except where the Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from
deductible temporary differences associated with such investments are only recognized to the extent that it is probable that there will
be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the
foreseeable future.
The carrying amount of deferred tax assets is
reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will
be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured
at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates
(and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities
and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period,
to recover or settle the carrying amount of its assets and liabilities.
Deferred income tax assets and liabilities are
offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income
tax assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable
entities where there is an intention to settle the balances on a net basis.
Current and deferred tax are recognized in profit
or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the
current and deferred tax are also recognized in other comprehensive income or directly in equity respectively. Where current tax or deferred
tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.
76
Leasing
IFRS 16 Leases requires lessees to recognize assets
and liabilities for most leases based on a 'right-of-use model' which reflects that, at the commencement date, a lessee has
a financial obligation to make lease payments to the lessor for its right to use the underlying asset during the lease term. The lessor
conveys that right to use the underlying asset at lease commencement, which is the time when it makes the underlying asset available for
use by the lessee.
IFRS 16 defines a lease term as the noncancellable
period for which the lessee has the right to use an underlying asset including optional periods when an entity is reasonably certain to
exercise an option to extend (or not to terminate) a lease.
Under IFRS 16 lessees may also elect not to recognize assets and liabilities
for leases with a lease term of 12 months or less. In such cases a lessee recognizes the lease payments in profit or loss on a straight-line
basis over the lease term. The exemption is required to be applied by class of underlying assets. Lessees can also make an election for
leases for which the underlying asset is of low value. This election can be made on a lease-by-lease basis. For leases where the Group
is the lessee, the lease term is either cancelable or no longer than 12 months, so the Group has elected not to record the leased assets.
Lessor accounting under IFRS 16 is substantially
unchanged from IAS 17. Lessors continue to classify leases as either operating or finance leases using similar principles as in IAS 17.
IFRS 16 did not have any significant impact on leases where the Group is the lessor.
Leasehold improvements
Leasehold improvements, principally comprising
costs of office buildings and shops renovation, are held for administrative and selling purposes. Leasehold improvements are initially
measured at cost and amortized systematically over its useful life.
Property, plant and equipment
Property, plant and equipment ("PPE")
including buildings held for use in the production or supply of goods or services, or for administrative purposes other than construction
in progress are stated at cost less subsequent accumulated depreciation and accumulated impairment losses.
Depreciation is provided to write off the cost
of items of property, plant and equipment other than construction in progress over their estimated useful lives and after taking into
account of their estimated residual value, using the straight-line method.
Construction in progress includes property, plant
and equipment in the course of construction for production or for its own use purposes. Construction in progress is carried at cost less
any recognized impairment loss. Construction in progress is classified to the appropriate category of property, plant and equipment when
completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets
are ready for their intended use.
77
An item of property, plant and equipment is derecognized
upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising
on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is
included in profit or loss in the period in which the item is de-recognized.
Inventories
Inventories are stated at the lower of cost and
net realizable value. Costs of inventories are determined using the weighted average method. Net realizable value represents the estimated
selling price for inventories less all estimated costs of completion and costs necessary to make the sale.
Financial instruments – investments and
other financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition,
as subsequently measured at amortized cost, fair value through other comprehensive income, and fair value through profit or loss.
The classification of financial assets at initial
recognition depends on the financial asset's contractual cash flow characteristics and the Group's business model for managing
them. With the exception of trade receivables that do not contain a significant financing component or for which the Group has applied
the practical expedient of not adjusting the effect of a significant financing component, the Group initially measures a financial asset
at its fair value, plus in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables
that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction
price determined under IFRS 15 in accordance with the policies set out for "Revenue recognition".
In order for a financial asset to be classified
and measured at amortized cost or fair value through other comprehensive income, it needs to give rise to cash flows that are solely payments
of principal and interest ("SPPI") on the principal amount outstanding.
The Group's business model for managing
financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether
cash flows will result from collecting contractual cash flows, selling the financial assets, or both.
All regular way purchases and sales of financial
assets are recognized on the trade date, that is, the date that the Group commits to purchase or sell the asset. Regular way purchases
or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation
or convention in the marketplace.
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Subsequent measurement
The subsequent measurement of financial assets
depends on their classification as follows:
Financial assets at amortized cost (debt instruments)
The Group measures financial assets at amortized
cost if both of the following conditions are met:
●
The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows.
●
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at amortized cost are subsequently
measured using the effective interest method and are subject to impairment. Gains and losses are recognized in the income statement when
the asset is derecognized, modified or impaired.
Financial assets at fair value through other
comprehensive income (debt instruments)
The Group measures debt instruments at fair value
through other comprehensive income if both of the following conditions are met:
●
The financial asset is held within a business model with the objective of both holding to collect contractual cash flows and selling.
●
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
For debt instruments at fair value through other
comprehensive income, interest income, foreign exchange revaluation and impairment losses or reversals are recognized in the income statement
and computed in the same manner as for financial assets measured at amortized cost. The remaining fair value changes are recognized in
other comprehensive income. Upon derecognition, the cumulative fair value change recognized in other comprehensive income is recycled
to the income statement.
Financial assets at fair value through other
comprehensive income (equity investments)
Upon initial recognition, the Group can elect
to classify irrevocably its equity investments as equity investments designated at fair value through other comprehensive income when
they meet the definition of equity under HKAS 32 Financial Instruments: Presentation and are not held for trading. The classification
is determined on an instrument-by-instrument basis.
79
Gains and losses on these financial assets are
never recycled to the income statement. Dividends are recognized as other income in the income statement when the right of payment has
been established, it is probable that the economic benefits associated with the dividend will flow to the Group and the amount of the
dividend can be measured reliably, except when the Group benefits from such proceeds as a recovery of part of the cost of the financial
asset, in which case, such gains are recorded in other comprehensive income. Equity investments designated at fair value through other
comprehensive income are not subject to impairment assessment.
Financial assets at fair value through profit
or loss
Financial assets at fair value through profit
or loss include financial assets held for trading, financial assets designated upon initial recognition at fair value through profit or
loss, or financial assets mandatorily required to be measured at fair value. Financial assets are classified as held for trading if they
are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also
classified as held for trading unless they are designated as effective hedging instruments. Financial assets with cash flows that are
not solely payments of principal and interest are classified and measured at fair value through profit or loss, irrespective of the business
model. Notwithstanding the criteria for debt instruments to be classified at amortized cost or at fair value through other comprehensive
income, as described above, debt instruments may be designated at fair value through profit or loss on initial recognition if doing so
eliminates, or significantly reduces, an accounting mismatch.
Financial assets at fair value through profit
or loss are carried in the statement of financial position at fair value with net changes in fair value recognized in the income statement.
This category includes derivative financial instruments and structured bank deposits.
A derivative embedded in a hybrid contract, with
a financial liability or non-financial host, is separated from the host and accounted for as a separate derivative if the economic characteristics
and risks are not closely related to the host; a separate instrument with the same terms as the embedded derivative would meet the definition
of a derivative; and the hybrid contract is not measured at fair value through profit or loss. Embedded derivatives are measured at fair
value with changes in fair value recognized in the income statement. Reassessment only occurs if there is either a change in the terms
of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a financial asset
out of the fair value through profit or loss category.
A derivative embedded within a hybrid contract
containing a financial asset host is not accounted for separately. The financial asset host together with the embedded derivative is required
to be classified in its entirety as a financial asset at fair value through profit or loss.
Financial instruments – impairment of
financial assets
The Group recognizes an allowance for ECLs for
all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows
due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original
effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements
that are integral to the contractual terms.
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General approach
ECLs are recognized in two stages. For credit
exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses
that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there
has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over
the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
At each reporting date, the Group assesses whether
the credit risk on a financial instrument has increased significantly since initial recognition. When making the assessment, the Group
compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on
the financial instrument as at the date of initial recognition and considers reasonable and supportable information that is available
without undue cost or effort, including historical and forward-looking information.
The Group considers a financial asset in default
when contractual payments are 120 days past due. However, in certain cases, the Group may also consider a financial asset to be in default
when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before
taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation
of recovering the contractual cash flows.
Debt instruments at fair value through other comprehensive
income and financial assets at amortized cost are subject to impairment under the general approach and they are classified within the
following stages for measurement of ECLs except for trade receivables which apply the simplified approach as detailed below.
Stage 1 –
Financial instruments for which credit risk has not increased significantly since initial recognition and for which the loss allowance is measured at an amount equal to 12-month ECLs
Stage 2 –
Financial instruments for which credit risk has increased significantly since initial recognition but that are not credit-impaired financial assets and for which the loss allowance is measured at an amount equal to lifetime ECLs
Stage 3 –
Financial assets that are credit-impaired at the reporting date (but that are not purchased or originated credit-impaired) and for which the loss allowance is measured at an amount equal to lifetime ECLs
Simplified approach
For trade receivables that do not contain a significant
financing component or when the Group applies the practical expedient of not adjusting the effect of a significant financing component,
the Group applies the simplified approach in calculating ECLs. Under the simplified approach, the Group does not track changes in credit
risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix
that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic
environment.
81
For trade receivables that contain a significant
financing component and lease receivables, the Group chooses as its accounting policy to adopt the simplified approach in calculating
ECLs with policies as described above.
Financial instruments – derecognition
of financial assets
A financial asset (or, where applicable, a part
of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Group's consolidated
statement of financial position) when:
●
the rights to receive cash flows from the asset have expired; or
●
the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a "pass-through" arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Group has transferred its rights to receive
cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risk
and rewards of ownership of the asset. When it has neither transferred nor retained substantially all the risks and rewards of the asset
nor transferred control of the asset, the Group continues to recognize the transferred asset to the extent of the Group's continuing
involvement. In that case, the Group also recognizes an associated liability. The transferred asset and the associated liability are measured
on a basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of
a guarantee over the transferred asset is measured at the lower of the original amount of the asset and the maximum amount of consideration
that the Group could be required to repay.
Financial instruments – financial liabilities
Initial recognition and measurement
All financial liabilities are recognized initially
at fair value and, in the case of loans and borrowings, net of directly attributable transaction costs. The Group's financial liabilities
include trade payables, other payables, financial liabilities included in accruals and interest-bearing bank borrowings.
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Subsequent measurement
After initial recognition, interest-bearing loans
and borrowings are subsequently measured at amortized cost, using the effective interest rate method unless the effect of discounting
would be immaterial, in which case they are stated at cost. Gains and losses are recognized in the income statement when the liabilities
are derecognized as well as through the effective interest rate amortization process.
Amortized cost is calculated by taking into account
any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest
rate amortization is included in finance costs in the income statement.
Financial instruments – derecognition
of financial liabilities
A financial liability is derecognized when the
obligation under the liability is discharged or cancelled, or expires.
When an existing financial liability is replaced
by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such
an exchange or modification is treated as a derecognition of the original liability and a recognition of a new liability, and the difference
between the respective carrying amounts is recognized in the income statement.
Financial instruments – offsetting financial
instruments
Financial assets and financial liabilities are
offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset
the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.
G.
Safe Harbor
See "Introductory Notes—Forward-Looking
Information."
83
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A.
Directors and Senior Management
The following table sets forth certain information
regarding our directors and senior management, as well as employees upon whose work we are dependent, as of the date of this annual report.
NAME
AGE
POSITION
Sun Lei
39
Chief Executive Officer, Co-chairwoman and Director
Huidan Li
41
Co-chairman and Director
Mu Ruifeng
59
Independent Director
Baojun Zhu
46
Independent Director
Jin Yan
53
Independent Director
Ms. Sun Lei.
Ms. Sun, age 39, has been
our Chief Executive Officer and a director of our board since December 21, 2020, and our Interim Financial Officer and Co-Chairwoman since
November 7, 2022. She is an expert in management operation and an avid world traveler. She was: i) the CEO of a family-owned conglomerate
and, during her tenure, fully revamped its operation and expanded its business operation through mergers and acquisitions; ii) formed
a partnership with Richemont International Group in Paris; and iii) founded Jinxuan Luxury Tourism Group in 2016, engaging in the operation
of global high-end business jets, luxury brand yachts and automobiles. In addition to her rich experience in luxury goods management,
Ms. Sun is also an E-Commerce entrepreneur. Ms. Sun Lei graduated from Emlyon Business School in France with a Bachelor's degree
in business administration, a Master's Degree in economics and a Master's degree in finance. She also studied at School of
Economics and Management of Tsinghua University.
Mr. Huidan Li.
Mr. Li, age 41, has been
our Chairman and a director of our board since December 21, 2020, and now is a Co-chairman since November 7, 2022. He is the founder
of Baofu (Beijing) Holding Co., Ltd ("Baofu"). For the past fifteen (15) years, Mr. Li successfully expanded its business
into real estate, import and export, fin-tech and medical sectors. Baofu currently operates more than 15 companies. Mr. Li received his
MBA degree from University of Hawaii.
Baojun Zhu,
age 46, was appointed as a
member to our Board and a member of the Audit Committee on May 3, 2022. He has over 20 years of experience in the hospitality industry.
He is currently the Chairman of Baoxuan Group Co., Ltd, Vice President of China Hospitality Association, Vice President of Chinese Cuisine
Association. Mr. Zhu received award for Outstanding Meritorious Personage in Chinese hotel industry. Mr. Zhu acquired a range of expertise
in business based upon his over 20 years in the business world. The Board determined that Mr. Zhu is an independent director within the
meaning of the NASDAQ listing rules.
Mr. Mu Ruifeng.
Mr. Mu, age 59, has been
the independent director of our board since October 25, 2020. He is the founder of Xinruifeng Property Marketing Management Co., Ltd.
and Xinruifeng Investment Group Co., Ltd. He is currently serving as the general manager and chairman of the board of those two companies.
In addition, Mr. Mu also is the vice president of the Overseas Chinese Chamber of Commerce and a Hong Kong, Macao and Taiwanese specially
invited member of the Foreign Affairs Committee. Mr. Mu is also an investor in Touch Stone Investment Pty, Ltd., a fund based in Australia
focusing on the real estate market since 2015. Mr. Mu has acquired a range of expertise in business based upon his over 30 years in the
business world. In addition, Mr. Mu was appointed by the board of directors as the Chair of the Audit Committee. Our board of directors
has also determined that Mr. Mu is an "audit committee financial expert".
Mr. Jin Yan.
Mr. Jin, age 53, has been
the independent director of our board since October 25, 2020. He has over 20 years of marketing experience in the entertainment industry.
He is also a well-known entertainment agent, having represented superstars such as Andy Lau for almost ten years. Mr. Jin is currently
the president of Zhongshi Culture Communication Co., Ltd, which he founded in 2015. Mr. Jin was also appointed as a member of the Audit
Committee of the Company.
Our Board currently consists of five (5) members.
Each director will serve until the next annual meeting of shareholders of the Company or until removed by other actions, in accordance
with the Company's bylaws.
Huidan Li and Sun Lei are spouses. No other family
relationship exists between any of the persons named above.
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B. Compensation
For the year ended December 31, 2022, we did
not paid cash as compensation to our directors and executive officers as a group. We do not set aside or accrue any amounts for pension,
retirement or other benefits for our directors and senior management. However, we reimburse our directors for out-of-pocket expenses
incurred in connection with their services in such capacity.
For the year ended December 31, 2022, we granted
100,000 shares to our Chief Executive Officer, Interim Financial Officer, Co-chairwoman and director, pursuant to the employment agreement
entered into and executed on June 22, 2021. The 2021 Employment Agreement provided, in pertinent terms, that if the Company reaches its
annual revenue of US$50,000,000, as reported in the Company's 2021 annual report on Form 20-F for the fiscal year end December
31, 2021, Sun Lei will receive 100,000 shares of the Company's Common Stock as her stock compensation. The CEO Employment Agreement
and the issuance of the Shares have been previously approved by the Board and by the written consent of a majority of stockholders of
the voting power of the Company. The Shares bear the restrictive legend, as issued without registration under the Securities Act of 1933,
as amended (the "Securities Act"), in reliance upon an exemption under Section 4(a)(2) of the Securities Act.
For the year ended December 31, 2022, we
granted under our 2022 Equity Incentive Plan, as amended, an aggregate of 30,000 shares of our Common Stock to our executive
officers and directors as compensation for their services. Each share had the value of $22.80.
The grants to the Company's executive officers
and directors were as follows:
●
Ruifeng
                                            Mu, Director, was granted 10,000 shares;
●
Jin
                                            Yan, Director, was granted 10,000 shares
●
Huidan
                                            Li, Co-chairman and director, was granted 10,000 shares
The total compensation to Directors and Executives
as a group is as follows:
Directors and Executives
Shares issued
Total compensation (including cash)
Sun Lei
100,000
2,280,000,
Huidan Li
10,000
228,000
Ruifeng Mu
10,000
228,000
Jin Yan
10,000
228,000
2018 Equity Incentive Plan
On December 24, 2018, the Board of Directors of the Company adopted
the 2018 Equity Incentive Plan, or the 2018 Plan, pursuant to which the Company could offer up to two hundred thousand (200,000) shares
of Common Stock as equity incentives to its directors, employees and consultants.
2022 Equity Incentive Plan
On January 11, 2022, we terminated the 2018 equity
incentive plan and adopted the new equity incentive plan (the "2022 Plan"). We have advised the recipients of awards under
our equity incentive plan to handle relevant foreign exchange matters in accordance with the Stock Incentive Plan Notice. However, we
cannot guarantee that all employee awarded equity-based incentives can successfully register with SAFE in full compliance with the Stock
Incentive Plan Notice.
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The New 2022 EIP
On October 26, 2022, the Board terminated the
2022 Plan and adopted the New 2022 EIP with 4,000,000 maximum authorized shares of Common Stock for issuance.
The following paragraphs summarize the terms of
the New 2022 EIP
Purpose.
The purposes of the New 2022 EIP
are to promote the long-term growth and profitability of the Company and its affiliates by stimulating the efforts of employees, directors
and consultants of the Company and its affiliates who are selected to be participants, aligning the long-term interests of participants
with those of shareholders, heightening the desire of participants to continue in working toward and contributing to our success, attracting
and retaining the best available personnel for positions of substantial responsibility, and generally providing additional incentive for
them to promote the success of our business through the grant of awards of or pertaining to our Common Stock. The New 2022 EIP permits
the grant of ISOs, NSOs, Restricted Shares, Restricted Share Units, Share Appreciation Rights, Performance Units and Performance Shares
as the administrator of the New 2022 EIP may determine.
Administration
. The New 2022 EIP is administered
by our Board. The administrator has the authority to determine the specific terms and conditions of all awards granted under the New 2022
EIP, including, without limitation, the number of shares of common stock subject to each award, the price to be paid for the shares and
the applicable vesting criteria. The administrator has the discretion to make all other determinations necessary or advisable for the
administration of the New 2022 EIP.
Eligibility
. NSOs, Restricted Shares, Restricted
Share Units, Share Appreciation Rights, Performance Units and Performance Shares may be granted to employees, directors or consultants
either alone or in combination with any other awards. ISOs may be granted only to employees of the Company, and of any parent or subsidiary.
Shares Available for Issuance Under the New
2022 EIP
. Subject to adjustment as described below, (a) the maximum aggregate number of shares that may be issued under the New 2022
EIP is 4,000,000 shares of Common Stock, (b) to the extent consistent with Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code"), Subject to the certain provisions of the New 2022 EIP, including but not limited to, the reorganizations, combinations,
mergers,  to the extent consistent with Section 422 of the Code, up to an aggregate of ten million (10,000,000) shares may be issued
as ISOs under the New 2022 EIP; only employees of the Company or any parent or subsidiary shall be eligible for the grant of ISOs; for
awards denominated in Shares and satisfied in cash, the maximum Award to any individual participant of the New 2022 EIP in the aggregate
in any one fiscal year of the Company shall not exceed the Fair Market fair market value of one hundred (100,000) shares on the Grant
Date. The number and class of shares available under the New 2022 EIP are subject to adjustment in the event of certain reorganizations,
mergers, combinations, recapitalizations, share splits, share dividends, or other similar events which change the number or kind of shares
outstanding.
Transferability.
Unless otherwise provided
in the New 2022 EIP or otherwise determined by the administrator, an award may not be sold, pledged, assigned, hypothecated, transferred,
or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of
the participant, only by the participant. However, the administrator may, at or after the grant of an award other than an ISO, provide
that such award may be transferred by the recipient to a "family member" (as defined in the New 2022 EIP); provided, however,
that any such transfer is without payment of any consideration whatsoever and that no transfer shall be valid unless first approved by
the administrator, acting in its sole discretion, and as required by our Restated Articles . If the administrator makes an award transferable,
such award will contain such additional terms and conditions as the administrator deems appropriate.
Termination of, or Amendments to, the New 2022
EIP
. The Board may at any time amend, alter, suspend or terminate the 2022 Plan, provided that the Company will obtain shareholder
approval of any amendment to the extent necessary and desirable to comply with applicable Laws. No amendment, alteration, suspension or
termination of the New 2022 EIP will impair the rights of any participant, unless mutually agreed otherwise between the participant and
the administrator, which agreement must be in writing and signed by the participant and the Company. Termination of the New 2022 EIP will
not affect the administrator's ability to exercise the powers granted to it hereunder with respect to awards granted prior to the
date of such termination.
The New 2022 EIP will terminate ten years following
the date it was adopted by the Board, unless sooner terminated by the Board.
86
Employment Agreements
With the exception of Sun Lei, we have not entered
into any fixed compensation arrangements with any of our directors.
On July 12, 2022, the Company entered into the
2022 Employment Agreement with Sun Lei. The 2022 Employment Agreement has a term of one (1) year. Pursuant to the terms of the 2022 Employment
Agreement, Sun Lei shall receive cash compensation of USD1.00 and stock compensation, the amount of which will be based upon the Company's
achievements, as to be reported on this Annual Report for the fiscal year ended December 22, 2022.
Company Revenue
Number of
Common Stock
US$59,000,0000 - US$99,999,999
2,500 Shares
US$100,000,000 or more
5,000 Shares
Profit (Loss) Margin from Operation
A 5% - 9% improvement compared to 2021
5,000 Shares
A 10% - 19% improvement compared to 2021
7,5000 Shares
A 20% or more improvement compared to 2021
10,000 Shares
Profit from Non-Menswear operation
Achieve profitability on an adjusted basis
5,000 Shares
The Employment Agreement has been approved by
unanimous written consent of the Board and by written consent of holders of a majority of the total issued and outstanding capital stock
of the Company.
C.
Board Practices
Our board of directors currently consists of five
members, namely Sun Lei, Huidan Li, Mu Ruifeng, Jin Yan, and Baojun Zhu.
The Board has established the Audit Committee,
which is comprised entirely of independent directors. From time to time, the Board may establish other committees.
Audit Committee
Our Audit Committee is currently composed of three
members: Baojun Zhu, Mu Ruifeng, and Jin Yan. Our Board of Directors determined that each member of the Audit Committee meets the independence
criteria prescribed by applicable regulation and the rules of the SEC for audit committee membership. Each Audit Committee member also
meets NASDAQ's financial literacy requirements. Mu Ruifeng serves as Chair of the Audit Committee.
Our Board of Directors has determined that Mr.
Mu Ruifeng is the "audit committee financial expert" as such term is defined in Item 407(d) of Regulation S-K promulgated
by the SEC and also meets NASDAQ's financial sophistication requirements.
The Audit Committee oversees our accounting and
financial reporting processes and the audits of the financial statements of our Company. The Audit Committee is responsible for, among
other things:
●
the appointment, compensation, retention and oversight of the work of the independent auditor;
●
reviewing and pre-approving all auditing services and permissible non-audit services (including the fees and terms thereof) to be performed by the independent auditor;
●
reviewing and approving all proposed related-party transactions;
●
discussing the interim and annual financial statements with management and our independent auditors;
●
reviewing and discussing with management and the independent auditor (a) the adequacy and effectiveness of the Company's internal controls, (b) the Company's internal audit procedures, and (c) the adequacy and effectiveness of the Company's disclosure controls and procedures, and management reports thereon;
●
reviewing reported violations of the Company's code of conduct and business ethics; and
●
reviewing and discussing with management and the independent auditor various topics and events that may have significant financial impact on the Company or that are the subject of discussions between management and the independent auditors.
87
D.
Employees
As of December 31, 2022, we employed 55 full-time
employees. The following table sets forth the number of our full-time employees by function.
Function
Number of
Employees
Management and Administration
6
Finance
2
Business Development
14
IT R&D
33
TOTAL
55
We believe that we have maintained a satisfactory
working relationship with our employees, and we have not experienced any significant labor disputes or any difficulty in recruiting staff
for company's operations. None of company's employees is represented by a labor union.
Our employees in China participate in a state
pension plan organized by Chinese municipal and provincial governments. In addition, the company is required by Chinese law to cover employees
in China with various types of social insurance. See "Item 3. Key Information—D. Risk Factors—Risks Related to Doing
Business in China— Our failure to fully comply with PRC laws relating to social insurance and housing accumulation fund may expose
it to potential administrative penalties."
E.
Share Ownership
The following table
lists, as of May 12, 2023, the number of shares of common stock beneficially owned by (i) each person, entity or group (as that term
is used in Section 13(d)(3) of the Securities Exchange Act of 1934) known to the Company to be the beneficial owner of more than 5% of
the outstanding common stock; (ii) each of our directors (iii) each of our Named Executive Officers and (iv) all executive officers and
directors as a group. Information relating to beneficial ownership of common stock by our principal stockholders and management is based
upon information furnished by each person using "beneficial ownership" concepts under the rules of the SEC. Under these rules,
a person is deemed to be a beneficial owner of a security if that person directly or indirectly has or shares voting power, which includes
the power to vote or direct the voting of the security, or investment power, which includes the power to dispose or direct the disposition
of the security. 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. Under the SEC rules, more than one person may be deemed to be a beneficial owner of the same securities, and
a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary interest.
Except as noted below,
each person has sole voting and investment power with respect to the shares beneficially owned and each stockholder's address is c/o JX
Luxventure Limited, Bin Hai Da Dao No. 270, Lang Qin Wan Guo Ji Du Jia Cun Zong He Lou, Xiu Ying District, Haikou City, Hainan Province
570100, People's Republic of China.
88
The percentages below
are calculated based on 6,063,192 shares of common stock issued and outstanding as of May 12, 2023.
Name
Office, If Any
Title of
Class
Amount and
Nature of
Beneficial
Ownership
Percent of
Class
(3)
Officers and Directors
Sun Lei
Chief Executive Officer, Interim Chief Financial Officer, Co-Chairwoman and Director
Common Stock
316,310
(1)(2)
9.7
%
Huidan Li
Co-Chairman
Common Stock
30,000
*
Baojun Zhu
Director
Common Stock
0
0
Mu Ruifeng
Director
Common Stock
10,000
*
Jin Yan
Director
Common Stock
10,000
*
All current officers and directors as a group (5 persons named above)
Common Stock
366,310
(1)(2)
10.4
%
(4)
5% Security Holders
None
*
Less than 1%
(1)
Includes 20,989 shares of common stock held by Happy Brilliance Limited, a Cayman Islands company in which Sun Lei, our Chief Executive Officer, interim Chief Financial Officer, Co-Chairwoman and Director, has the sole voting and dispositive power
(2)
Does not include (i)124,000 shares of common stock issuable upon conversion of 1,240,000 shares of Series A Preferred Stock; (ii) 75,000 shares of common stock issuable upon conversion of 150,000 shares of Series C Convertible Preferred Stock; and (iii) 104,000 shares of common stock issuable upon conversion of 80,000 shares of Series D Preferred Stock. All shares of preferred stock vote together with common stock on an as-converted basis
(3)
The percentage is calculated based upon Ms. Lei's sole voting
and dispositive power over 619,310 shares of common stock, including 303,000 shares of common stock issuable upon conversion of shares
of Series A, C and D Preferred Stock
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY
TRANSACTIONS
A.
Major Shareholders
Please refer to Item 6 "Directors, Senior
Management and Employees—E. Share Ownership."
B.
Related Party Transactions
On May 22, 2022, the Board granted 100,000
shares of the Company's Common Stock to Sun Lei pursuant to the employment agreement between the Company and Sun Lei dated June
22, 2021 (the "2021 Employment Agreement"). The 2021 Employment Agreement provided, in pertinent terms, that if the Company
reaches its annual revenue of US$50,000,000, as reported in the Company's 2021 annual report on Form 20-F for the fiscal year end
December 31, 2021, Sun Lei will receive 100,000 shares of the Company's Common Stock as her stock compensation. The CEO Employment
Agreement and the issuance of the Shares have been previously approved by the Board and by the written consent of a majority of stockholders
of the voting power of the Company. The Shares bear the restrictive legend, as issued without registration under the Securities Act of
1933, as amended (the "Securities Act"), in reliance upon an exemption under Section 4(a)(2) of the Securities Act.
89
On June 22, 2022, the Board authorized a share repurchase program of
up to US$5,000,000 of the Company's common stock from time to time during a 12-month period by Mr. Lei, our Chief Executive Officer
of Company (the "Share Repurchase Program"). Pursuant to the Repurchase Program, Mrs. Lei will not sell the shares in the
public market for at least two years. As of the date of this Annual Report, Ms. Lei completed the Repurchase Program. Purchase to the
Repurchase Program, on March 28, 2023, she acquired in private negotiated transactions 152,000 shares of Common Stock, at the total purchase
price of $1,780,000; 1,240,000 shares of Series A Convertible Preferred Stock, convertible into 124,000 shares of Common Stock at the
total purchase price of $1,240,000; and 80,000 shares of Series D Convertible Preferred Stock, convertible into 104 shares of Common Stock
at the purchase price of $2,080,000.
On July 12, 2022, the Company entered into a new
Employment Agreement with Sun Lei. The Employment Agreement has a term of one (1) year. Pursuant to the terms of the Employment Agreement,
Sun Lei shall receive cash compensation of USD1.00 and stock compensation, the amount of which will be based upon the Company's
achievements, as to be reported on this Annual Report for the fiscal year ended December 22, 2022.
Company Revenue
Number of Common Stock
US$59,000,0000 - US$99,999,999
2,500 Shares
US$100,000,000 or more
5,000 Shares
Profit (Loss) Margin from Operation
A 5% - 9% improvement compared to 2021
5,000 Shares
A 10% - 19% improvement compared to 2021
7,5000 Shares
A 20% or more improvement compared to 2021
10,000 Shares
Profit from Non-Menswear operation
Achieve profitability on an adjusted basis
5,000 Shares
The Employment Agreement has been approved by
unanimous written consent of the Board and by written consent of holders of a majority of the total issued and outstanding capital stock
of the Company.
C.
Interests of Experts and Counsel
Not applicable.
ITEM 8. FINANCIAL INFORMATION
A.
Consolidated Statements and Other Financial Information
Financial Statements
We have appended consolidated financial statements
filed as part of this report. See Item 18 "Financial Statements."
Legal Proceedings
We may be subject to legal proceedings, investigations
and claims incidental to the conduct of our business from time to time. We are currently not party to any legal or arbitration proceedings,
including those relating to bankruptcy, receivership or similar proceedings and those involving any third party, which may have, or have
had in the recent past, significant effects on our financial position or profitability.
Dividend Policy
To date, we have not paid any cash dividends on
our shares. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.
90
We are a holding company incorporated in the Marshall
Islands. As a Marshall Islands company, we may only declare and pay dividends except when the corporation is insolvent or would thereby
be made insolvent or when the declaration or payment would be contrary to any restrictions contained in our Restated Articles. Dividends
may be declared and paid out of surplus only; but in case there is no surplus, dividends may be declared or paid out of the net profits
for the fiscal year in which the dividend is declared and for the preceding fiscal year. We currently anticipate that we will retain any
available funds to finance the growth and operation of our business and we do not anticipate paying any cash dividends in the foreseeable
future. Additionally, our cash held in foreign countries may be subject to certain control limitations or repatriation requirements, limiting
our ability to use this cash to pay dividends.
PRC regulations may restrict the ability of our
PRC subsidiaries to pay dividends to us. See "
Risk Factors—Risks Related to Doing Business in China
." We may
rely on dividends paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability
of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.
Our board of directors has discretion as to whether
to distribute dividends, subject to above-referenced restrictions under Marshall Islands law. Even if our board of directors decides to
pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, the
amount of distribution, if any, received by us from our subsidiaries, general financial condition, contractual restrictions and other
factors that the board of directors may deem relevant. Please see the section entitled "
PRC Regulations - Taxation
"
for information on the potential tax consequences of any cash dividends declared.
B.
Significant Changes
No significant change has occurred since the date
of our consolidated financial statements filed as part of this annual report.
ITEM 9. THE OFFER AND LISTING
A.
Offer and Listing Details
Our Common Stock is listed on the NASDAQ Capital
Market and trade under the symbol "JXJT" since October 10, 2022. Between January November 3, 2014 and October 7, 2021, our
Common Stock was traded on the NASDAQ Capital Market under the symbol "KBSF, and between October 8, 2021 and October 9, 2022, our
Common Stock was traded on the Nasdaq under the symbol "LLL."
On February 3, 2017, a special shareholder
meeting was held at the Company's headquarters in China and at the meeting, our shareholders approved a proposal to grant discretionary
authority to the Board of Directors of the Company to effect a reverse stock split of issued and outstanding shares of Common Stock at
a ratio within the range from one-for-two up to one-for-twenty; and determine whether to pay in cash the fair value of fractions of a
share of Common Stock as of the time when those entitled to receive such fractions are determined or to entitle shareholders to receive,
in lieu of any fractional share, the number of shares of Common Stock rounded up to the next whole number. On February 3, 2017, after
the special shareholder meeting, our Board of Directors approved a one-for-fifteen reverse stock split of the Company's issued and
outstanding Common Stock. In addition, in lieu of issuing any fractional share, the Board of Directors decided that shareholders are entitled
to receive the number of shares of Common Stock rounded up to the next whole number. Our Common Stock began trading on the NASDAQ Stock
Market on a split-adjusted basis when the market opened on February 9, 2017.
On March 24, 2023, the Board and holders of a
majority of the Company's voting power, approved, by written consent in lieu of a meeting (a) a reverse stock split of the Company's
outstanding Common Stock in a ratio of not less than 1-for-5 and not more than 1-for-15 (the "Split Range") and granted the
Board the ultimate authority to determine the exact split ratio of the reverse stock split within the Split Range, and (b) the form, terms,
and provisions of an Amendment to the Amended and Restated Articles of Incorporation (the "Amendment"). On April 17, 2023,
the Board determined that, based on the market price of the Company's Common Stock, a 1-for-10 split ratio would be appropriate
(the "Reverse Stock Split"). On April 25, 2023, the Company filed the Amendment to the Restated Articles with the Registrar
or Deputy Registrar of Corporations in the Marshall Islands, implementing the Reverse Stock Split. Upon the opening of the market on April
26, 2023, the Company's common stock began trading on the Nasdaq Capital Market on a post-split basis.
91
Approximate Number of Holders of Our Securities
On May 12, 2023, there were approximately 372
shareholders of record of our Common Stock and 1 holder of record of our Preferred Stock. Certain of our securities are held in nominee
or street name so the actual number of beneficial owners of our securities is greater than the number of record holders set forth above.
B.
Plan of Distribution
Not applicable.
C.
Markets
See our disclosures above under "A. Offer
and Listing Details."
D.
Selling Shareholders
Not applicable.
E.
Dilution
Not applicable.
F.
Expenses of the Issue
Not applicable.
ITEM 10. ADDITIONAL INFORMATION
A.
Share Capital
Our Restated Articles of Incorporation, as amended, authorize the Company
to issue up to 155,000,000 shares with a par value of $0.0001, consisting of 150,000,000 shares of Common Stock and 5,000,000 shares of
Preferred stock. As of date of this report, 6,063,192 shares of Common Stock are issued and outstanding and 1,470,000 of Preferred Stock
are issued and outstanding, consisting of 1,240,000 shares of Series A Preferred; 150,000 shares of Series C Preferred, and 80,000 shares
of Series D Preferred.
B.
Memorandum and Articles of Association
The following represents a summary of certain
key provisions of our articles of incorporation and bylaws. The summary does not purport to be a summary of all of the provisions of our
articles of incorporation and bylaws. For more complete information you should read our amended and restated articles of incorporation,
as amended, and bylaws, each listed as an exhibit to this report.
We were incorporated in the Marshall Islands on
January 26, 2012 under the Marshall Islands Business Corporations Act ("BCA"). The purpose of the Company is to engage in
any lawful act or activity for which corporations may now or hereafter be organized under the BCA. Our amended and restated articles of
incorporation, as amended, and bylaws do not impose any limitations on the ownership rights of our stockholders.
Description of Common Stock
Each outstanding share of Common Stock entitles
the holder to one vote on all matters submitted to a vote of stockholders. Upon our dissolution, liquidation or winding up of the affairs
of the Company, after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation
preferences, if any, the holders or our Common Stock will be entitled to receive pro rata our remaining assets available for distribution.
Holders of Common Stock do not have conversion, redemption or preemptive rights to subscribe to any of our securities.
92
Preferred Stock.
Our Board of Directors is authorized, without
any further vote or action by our stockholders, to issue up to 5,000,000 shares of preferred stock in different classes and series and,
with respect to each class or series, to determine the designations, powers, preferences, privileges and other rights, including dividend
rights, conversion rights, terms of redemption and liquidation preferences, any or all of which may be greater than the powers and rights
associated with the common stock, at such times and on such other terms as they think proper. Our Board of Directors may issue shares
of preferred stock on terms calculated to discourage, delay or prevent a change of control of our company or the removal of our management.
Designations of our Preferred Stock.
Series A Convertible Preferred Stock
On April 8, 2021, our Board of Directors,
acting by unanimous written consent, in accordance with Section 35 of the BCA, duly adopted the resolutions creating a new series of
preferred stock, par value $0.0001 per share ("Preferred Stock"), designated as "Series A Convertible Preferred
Stock" and adopted the Certificate of Designations of the Series A Convertible Preferred Stock (the "Certificate of
Designations of Series A") which authorized for issuance 1,500,000 shares of Series A Convertible Preferred Stock and had the
stated initial stated value of US$1.00 per share (the "Series A Preferred"). On April 8, 2021, the Company offered and
sold 1,500,000 shares of the Series A Preferred to a single investor for total subscription proceeds of $1,500,000. On April 20,
2022, our Board adopted resolutions, by unanimous written consent, pursuant to Section 35 of the BCA, in which it determined that
the Certificate of Designation of Series A") was not filed with the Registrar of Corporations, in accordance with the
provisions of sections 35 and 5 of the BCA at the time the Certificate of Designation of Series A Preferred was approved by the
Board, and that it is in the best interests of the Corporation and its stockholders to correct the file the Certificate of
Designation of Series A Preferred with the Registrar of Corporations, to correct an administrative oversight. On April 25, 2022, the
Company filed the Certificate of Designations of Series A Preferred with the Registrar of Corporations under the Company's
former name, KBS Fashion Group Limited, and on April 27, 2022, the Company filed with the Registrar of Corporations the First
Amended and Restated Certificate of Designations of Series A, reflecting the Company's current name "JX Luxventure
Limited" and restating all provisions set forth in the Certificate of Designations of Series A Preferred. Pursuant to this
unanimous written consent dated April 20, 2022, the Board of Directors ratified and confirmed to treat the investor that purported
to have been issued 1,500,000 shares of Series A economically, as if such holder (the "Holder") has been the holder of
1,500,000 shares of Series A since April 8, 2021, the date of the purported issuance of Series A Preferred, rather than the date of
the filing of the Certificate of Series A Preferred and the First Amended and Restated Certificate of Series A Preferred with the
Registrar of Corporations. On May 10, 2022, the Company filed with the Registrar of Corporations the Second Amended and Restated
Certificate of Designation of Series A Preferred. As set forth in the Second Amended and Restated Certificate of Series A Preferred,
it features a stated value of $1.00 and is convertible to shares of our Common Stock at any time from the date of issue. Conversions
are limited, however, such that no conversion may made to the extent that the number of shares of Common Stock to be issued pursuant
to such conversion, when aggregated with all other shares of Common Stock owned by the Holder at such time, would result in the
Holder beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act and the rules thereunder) in excess
of 9.99% of our then issued and outstanding shares of Common Stock. Series A Convertible Preferred Stock votes together with holders
of shares of Common Stock on an as-if-converted basis, has no special dividend rights, and ranks equally to our common stock with
respect to rights upon liquidation. All shares of Common Stock issuable upon conversion of the Series A Preferred are subject to a
two-year lock-up agreement running from the initial closing of the financing. Our offer and sale of the Series A Preferred was
exempt under Rule 506(b) under Regulation D, as it did not involve any general solicitation or advertising and was made to an
accredited investor within the meaning of Rule 501 under Regulation D. On May 10, 2022, the Holder converted 260,000 shares of
Series A Preferred into 26,000 shares of Common Stock. On the date of this Annual Report, there are 1,240,000 shares of Series A
Preferred issued and outstanding.
Series B Participating Preferred Stock and
Rights Dividend
On March 12, 2021, we announced the authorization
and declaration of a dividend distribution of one right (a "Right") for each outstanding share of Common Stock, par value
$0.0001 per share, of the Company to stockholders of record as of the close of business on March 31, 2021 (the "Record Date").
Each Right entitles the registered holder to purchase from the Company one 0.00667 portion of a share of Series B Participating Preferred
Stock, par value $0.0001 per share (the "Preferred Stock"), of the Company at an exercise price of $50.00 (the "Exercise
Price"). The complete terms of the Rights are set forth in a Preferred Stock Rights Agreement (the "Rights Agreement"),
dated as of March 11, 2021, between the Company and American Stock Transfer & Trust Company, LLC, as rights agent.
93
Our Board of Directors adopted the Rights Agreement
to protect stockholders from coercive or otherwise unfair takeover tactics. In general terms, it works by imposing a significant penalty
upon any person or group that acquires 15% or more of the Company's Common Stock without the approval of the Board. As a result,
the overall effect of the Rights Agreement and the issuance of the Rights may be to render more difficult or to discourage a merger, tender
or exchange offer or other business combination involving the Company that is not approved by the Board. However, neither the Rights Agreement
nor the Rights should interfere with any merger, tender or exchange offer or other business combination approved by our Board. On April
20, 2022, our Board adopted resolutions, by unanimous written consent, pursuant to Section 35 of the BCA, in which it determined that
the Certificate of Designation of Series B Participating Preferred Stock was not filed with the Registrar of Corporations, in accordance
with the provisions of sections 35 and 5 of the BCA at the time the Certificate of Designation of Series B Participating Preferred Stock
was approved by the Board, and that it is in the best interests of the Corporation and its stockholders to correct the file the Certificate
of Designation of Series B Participating Preferred Stock with the Registrar of Corporations, to correct an administrative oversight. On
April 25, 2022, the Company filed the Certificate of Designation of Series B Participating Preferred Stock with the Registrar of Corporations
under the Company's former name, and on April 27, 2022, we filed the Amended and Restated Certificate of Designation of Series B
Participating Stock with the Registrar of Corporations reflecting the Company's current name.
Series C Convertible Preferred Stock
On September 1, 2021, our Board, acting by unanimous
written consent, in accordance with Section 35 of the BCA, duly adopted the resolutions creating a new series of Preferred Stock, designated
as "Series C Convertible Preferred Stock" and adopted the Certificate of Designations of the Series C Convertible Preferred
Stock (the "Certificate of Designations of Series C") which authorized for issuance 150,000 shares of Series C Convertible
Preferred Stock and had the stated initial stated value of US$10.00 per share (the "Series C Preferred"). On September 1,
2021, the Company sold 150,000 shares of the Series C Preferred for total subscription proceeds of $1,500,000 to Sun Lei, our Chief Executive
Officer and a member of our board. Our Series C Convertible Preferred Stock features a stated value of $10.00 and is convertible to shares
of our Common Stock at any time after 6 months from the date of issue. On April 20, 2022, our Board adopted resolutions, by unanimous
written consent, pursuant to Section 35 of the BCA, in which it determined that the Certificate of Designation of Series C Preferred was
not filed with the Registrar of Corporations, in accordance with the provisions of sections 35 and 5 of the BCA at the time the Certificate
of Designation of Series C Preferred was approved by the Board, and that it is in the best interests of the Corporation and its stockholders
to correct the file the Certificate of Designation of Series C Preferred with the Registrar of Corporations, to correct an administrative
oversight. Pursuant to this unanimous written consent dated April 20, 2022, the Board of Directors ratified and confirmed to treat the
investor that purported to have been issued 150,000 shares of Series C economically, as if such holder (the "Holder") has
been the holder of 150,000 shares of Series C Preferred since September 1, 2021, the date of the purported issuance of Series C Preferred,
rather than the date of the filing of the Certificate of Series C Preferred and the Amended and Restated Certificate of Series C Preferred
with the Registrar of Corporations. On April 25, 2022, the Company filed the Certificate of Designation of Series C Preferred with the
Registrar of Corporations under the Company's former name, and on April 27, 2022, we filed the Amended and Restated Certificate
of Designation of Series C Preferred with the Registrar of Corporations reflecting the Company's current name.
As stated in our Amended and Restated Certificate of Designation of
Series C Preferred, each share of Series C  Preferred is convertible into 5 shares of Common Stock, subject to adjustments resulting
from reverse stock splits. As a result of the 1-for-10 Reverse Stock Split, which became effective on April 26, 2023, two shares of the
Series C Preferred Stock is convertible into 1 share of Common Stock. Series C Preferred votes together with holders of Common Stock on
an as-if-converted basis, which is not exercisable for one year, has no special dividend rights, and ranks equally to our Common Stock
with respect to rights upon liquidation. All shares of Common Stock issuable upon conversion of the Series C Preferred are subject to
a one-year lock-up agreement running from the initial closing of the financing. Our offer and sale of the Series C Preferred was exempt
under Rule 506(b) under Regulation D, as it did not involve any general solicitation or advertising and was made to an accredited investor
within the meaning of Rule 501 under Regulation D.
94
Series D Convertible Preferred Stock
On October 18, 2021, our Board acting by unanimous written consent,
in accordance with Section 35 of the BCA, duly adopted the resolutions creating a new series of Preferred Stock, designated as "Series
D Convertible Preferred Stock" and adopted the Certificate of Designations of the Series D Convertible Preferred Stock (the "Certificate
of Designations of Series D") which authorized for issuance 100,000 shares of Series D Convertible Preferred Stock and had the stated
initial stated value of US$39.00 per share (the "Series D Preferred"). On November 1, 2021, the Company offered and sold 100,000
shares of Series D Preferred to an accredited investor for the total gross proceeds of $3,900,000, in reliance upon Section 4(a)(2) of
the Securities Act. On April 20, 2022, our Board adopted resolutions, by unanimous written consent, pursuant to Section 35 of the BCA,
in which it determined that the Certificate of Designation of Series D Preferred was not filed with the Registrar of Corporations, in
accordance with the provisions of sections 35 and 5 of the BCA at the time the Certificate of Designation of Series D Preferred was approved
by the Board, and that it is in the best interests of the Corporation and its stockholders to correct the file the Certificate of Designation
of Series D Preferred with the Registrar of Corporations, to correct an administrative oversight. Pursuant to this unanimous written consent
dated April 20, 2022, the Board of Directors ratified and confirmed to treat the investor that purported to have been issued 100,000 shares
of Series D Preferred economically, as if such holder (the "Holder") has been the holder of 100,000 shares of Series D Preferred
since November 1, 2021, the date of the purported issuance of Series D Preferred, rather than the date of the filing of the Certificate
of Series D Preferred and the Amended and Restated Certificate of Series D Preferred with the Registrar of Corporations. On April 25,
2022, the Company filed the Certificate of Designation of Series D Preferred with the Registrar of Corporations, and on April 27, 2022,
we filed the Amended and Restated Certificate of Designation of Series D Preferred with the Registrar of Corporations. As stated in the
Amended and Restated Certificate of Designation of Series D Preferred, shares of Series D Preferred vote together with holders of shares
of Common Stock on an as-if-converted basis; have no special dividend right, ranks equal to the Common Stock with respect to rights upon
liquidation and are convertible into shares of Common Stock on a 1 do 13 basis at any time following the issuance, subject to the adjustments
with respect to the reverse stock split, as a result of which each share of Series D Preferred Stock may be currently converted into 1.3
shares of Common Stock However, the conversion is limited to the extent that no conversion may occur if the number of shares of Common
Stock to be issued pursuant to such conversion, when aggregated with all other shares of Common Stock owned by the holder of such shares
at such time, would result in the holder beneficially owning (as determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended, and the rules thereunder) in excess of 9.99% of the then issued and outstanding shares of Common Stock. On May
2, 2022, the Holder converted 20,000 shares of Series D Preferred into 26,000 shares of Common Stock.
Directors
The business and affairs of the Company are managed
by or under the direction of our Board of Directors.
Our directors are elected by the holders of the
shares representing a majority of the total voting power of the then-outstanding capital stock of the Company entitled to vote generally
in the election of directors ("Voting Stock"). Our Restated Articles provide that cumulative voting shall not be used to elect
directors. Each director will be elected to serve until the next annual meeting of shareholders and until his/her successor shall have
been duly elected and qualified, except in the event of his/her death, resignation, removal or the earlier termination of his/her term
of office.
Any director or the entire Board of Directors
may be removed at any time, with or without cause, by the affirmative vote of the holders of at least a majority of the total voting power
of the Voting Stock entitled to vote thereon or with cause by directors constituting at least two-thirds of the entire Board.
Vacancies in the Board of Directors occurring
by death, resignation, the creation of new directorships, the failure of the shareholders to elect the whole board at any annual election
of directors, or, except as herein provided, for any other reason, including removal of directors for cause, may be filled either by the
affirmative vote of a majority of the remaining directors then in office, although less than a quorum, at any special meeting called for
that purpose or at any regular meeting of the Board. Vacancies occurring by removal of directors without cause may be filled only by vote
of the shareholders.
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Shareholder Meetings
Annual stockholder meetings will be held at a
time and place selected by our board of directors. The meetings may be held in or outside of the Marshall Islands. Under our Restated
Articles, special meetings may be called by the board of directors, or by the secretary of the Company requested by stockholders representing
certain amount of voting power. Our board of directors shall give not less than 15 days and not more than 60 days prior written notice
of a shareholders' meeting to each shareholder of record entitled to vote thereat and to each shareholder of record who, by reason
of any action proposed at such meeting would be entitled to have his/her shares appraised if such action were taken, and the notice shall
include a statement of that purpose and to that effect.
Our bylaws provide that a meeting of shareholders
is duly constituted if, at the commencement of the meeting, there are shareholders present in person or by proxy representing not less
than a majority of the votes of the shares issued and outstanding and entitled to vote on resolutions of shareholders to be considered
at the meeting.
If a quorum is present, the affirmative vote of
a majority of the shares of stock represented at the meeting will be the act of the shareholders. At any meeting of shareholders, each
shareholder entitled to vote any shares on any manner to be voted upon at such meeting shall be entitled to one vote on such matter for
each such share. Any action required or permitted to be taken at a meeting, may be taken without a meeting if a consent in writing setting
forth the action so taken, is signed by all the shareholders entitled to vote with respect to the subject matter thereof.
Dissenters' Rights of Appraisal and
Payment.
Under the BCA, our stockholders have the right
to dissent from various corporate actions, including any merger or sale of all or substantially all of our assets not made in the usual
course of our business, and receive payment of the fair value of their shares. However, the right of a dissenting stockholder to receive
payment of the fair value of his or her shares shall not be available for any shares of stock of the constituent corporation surviving
a merger if the merger did not require for its approval the vote of the stockholders of the surviving corporation. In the event of any
further amendment of our articles of incorporation, a stockholder also has the right to dissent and receive payment for his or her shares
if the amendment alters certain rights in respect of those shares. The dissenting stockholder must follow the procedures set forth in
the BCA to receive payment. In the event that we and any dissenting stockholder fail to agree on a price for the shares, the BCA procedures
involve, among other things, the institution of proceedings in the circuit court in the judicial circuit in the Marshall Islands in which
our Marshall Islands office is situated. The value of the shares of the dissenting stockholder is fixed by the court after reference,
if the court so elects, to the recommendations of a court-appointed appraiser.
Stockholders' Derivative Actions
Under the BCA, any of our stockholders may bring
an action in our name to procure a judgment in our favor, also known as a derivative action, provided that the stockholder bringing the
action is a holder of common stock both at the time the derivative action is commenced and at the time of the transaction to which the
action relates.
Indemnification of Officers and Directors
The BCA authorizes corporations to limit or eliminate
the personal liability of directors and officers to corporations and their stockholders for monetary damages for breaches of directors'
fiduciary duties. Our Restated Articles include a provision that eliminates the personal liability of directors for monetary damages for
actions taken as a director to the fullest extent permitted by law. We must indemnify our directors and officers to the fullest extent
authorized by law. We are also expressly authorized to advance certain expenses (including attorneys' fees and disbursements and
court costs) to our directors and offices and carry directors' and officers' insurance providing indemnification for our directors,
officers and certain employees for some liabilities.
The limitation of liability and indemnification
provisions in our Restated Articles and bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their
fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers,
even though such an action, if successful, might otherwise benefit us and our stockholders. In addition, your investment may be adversely
affected to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification
provisions.
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C.
Material Contracts
We have not entered into any material contracts
other than in the ordinary course of business and other than those described in Item 4 "Information on the Company," Item
5 "Operating and Financial Review and Prospects—F. Tabular Disclosure of Contractual Obligations," Item 7 "Major
Shareholders and Related Party Transactions," or filed (or incorporated by reference) as exhibits to this annual report or otherwise
described or referenced in this annual report.
D.
Exchange Controls
Marshall Islands Exchange Controls
Under Marshall Islands law, there are currently
no restrictions on the export or import of capital, including foreign exchange controls or restrictions that affect the remittance of
dividends, interest or other payments to nonresident holders of our shares.
BVI Exchange Controls
There are no material exchange controls restrictions
on payment of dividends, interest or other payments to the holders of our common stock or on the conduct of our operations in the BVI,
where we were incorporated. There are no material BVI laws that impose any material exchange controls on us or that affect the payment
of dividends, interest or other payments to nonresident holders of our common stock. BVI law and our memorandum and articles of association
do not impose any material limitations on the right of non-residents or foreign owners to hold or vote our common stock.
PRC Exchange Controls
Regulations on Foreign Currency Exchange
Under the PRC Foreign Currency Administration
Rules promulgated on January 29, 1996 and last amended on August 5, 2008 and various regulations issued by SAFE and other relevant PRC
government authorities, payment of current account items in foreign currencies, such as trade and service payments, payment of interest
and dividends can be made without prior approval from SAFE by following the appropriate procedural requirements. By contrast, the conversion
of RMB into foreign currencies and remittance of the converted foreign currency outside the PRC for the purpose of capital account items,
such as direct equity investments, loans and repatriation of investment, requires prior approval from SAFE or its local office.
On February 13, 2015, SAFE promulgated the Circular
on Simplifying and Improving the Foreign Currency Management Policy on Direct Investment, effective from June 1, 2015, which cancels the
requirement for obtaining approvals of foreign exchange registration of foreign direct investment and overseas direct investment from
SAFE. The application for the registration of foreign exchange for the purpose of foreign direct investment and overseas direct investment
may be filed with qualified banks, which, under the supervision of SAFE, may review the application and process the registration.
The Circular of the SAFE on Reforming the Management
Approach regarding the Settlement of Foreign Capital of Foreign-invested Enterprise, or SAFE Circular 19, was promulgated on March 30,
2015 and became effective on June 1, 2015. According to SAFE Circular 19, a foreign-invested enterprise may, according to its actual business
needs, settle with a bank the portion of the foreign exchange capital in its capital account for which the relevant foreign exchange bureau
has confirmed monetary contribution rights and interests (or for which the bank has registered the account-crediting of monetary contribution).
For the time being, foreign-invested enterprises are allowed to settle 100% of their foreign exchange capitals on a discretionary basis;
a foreign-invested enterprise shall truthfully use its capital for its own operational purposes within the scope of business; where an
ordinary foreign-invested enterprise makes domestic equity investment with the amount of foreign exchanges settled, the invested enterprise
shall first go through domestic re-investment registration and open a corresponding Account for Foreign Exchange Settlement Pending Payment
with the foreign exchange bureau (bank) at the place of registration. The Circular of the SAFE on Reforming and Regulating Policies on
the Control over Foreign Exchange Settlement of Capital Accounts, or SAFE Circular 16, was promulgated and became effective on June 9,
2016. According to SAFE Circular 16, enterprises registered in PRC may also convert their foreign debts from foreign currency into Renminbi
on 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 self—discretionary basis, which applies to all
enterprises registered in the PRC. 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 and may not be used for investments
in securities or other investment with the exception of bank financial products that can guarantee the principal within the PRC unless
otherwise specifically provided. Besides, the converted Renminbi shall not be used to make loans for related enterprises unless it is
within the business scope or to build or to purchase any real estate that is not for the enterprise own use with the exception for the
real estate enterprise.
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On January 26, 2017, SAFE promulgated the Circular
on Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness and Compliance Verification, or SAFE Circular
3, which stipulates several capital control measures with respect to the outbound remittance of profits from domestic entities to offshore
entities, including (i) banks must check whether the transaction is genuine by reviewing board resolutions regarding profit distribution,
original copies of tax filing records and audited financial statements, and (ii) domestic entities must retain income to account for previous
years' losses before remitting any profits. Moreover, pursuant to SAFE Circular 3, domestic entities must explain in detail the
sources of capital and how the capital will be used, and provide board resolutions, contracts and other proof as a part of the registration
procedure for outbound investment.
Regulations on Foreign Exchange Registration
of Overseas Investment by PRC Residents
SAFE issued the Circular on Relevant Issues Relating
to Domestic Resident's Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37,
which became effective in July 2014, to replace the Circular of the State Administration of Foreign Exchange on Issues Concerning the
Regulation of Foreign Exchange in Equity Finance and Roundtrip Investments by Domestic Residents through Offshore Special Purpose Vehicles,
to regulate 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 or conduct round trip investment in China. SAFE Circular 37 defines a SPV as 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 onshore or offshore assets or interests, while "round trip investment" is defined as direct investment in
China by PRC residents or entities through SPVs, namely, establishing foreign-invested enterprises to obtain the ownership, control rights
and management rights. SAFE Circular 37 stipulates that, prior to making contributions into an SPV, PRC residents or entities be required
to complete foreign exchange registration with SAFE or its local branch. In addition, SAFE promulgated the Notice on Further Simplifying
and Improving the Administration of the Foreign Exchange Concerning Direct Investment in February 2015, which amended SAFE Circular 37
and became effective on June 1, 2015, requiring PRC residents or entities to register with qualified banks rather than SAFE in connection
with their establishment or control of an offshore entity established for the purpose of overseas investment or financing.
PRC residents or entities who had contributed
legitimate onshore or offshore interests or assets to SPVs but had not obtained registration as required before the implementation of
the SAFE Circular 37 must register their ownership interests or control in the SPVs with qualified banks. An amendment to the registration
is required if there is a material change with respect to the SPV registered, such as any change of basic information (including change
of the PRC residents, name and operation term), increases or decreases in investment amount, transfers or exchanges of shares, and mergers
or divisions. Failure to comply with the registration procedures set forth in SAFE Circular 37 and the subsequent notice, or making misrepresentation
on or failure to disclose controllers of the foreign-invested enterprise that is established through round-trip investment, may result
in restrictions being imposed on the foreign exchange activities of the relevant foreign-invested enterprise, 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. See "Risk Factors—Risks Related to Doing Business in China—PRC regulations relating
to investments in offshore companies by PRC residents may subject our PRC-resident beneficial owners or our PRC subsidiary to liability
or penalties, limit our ability to inject capital into our PRC subsidiary or limit our PRC subsidiary's ability to increase their
registered capital or distribute profits."
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Regulations on Stock Incentive Plans
SAFE promulgated the Notice on Issues Concerning
the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly Listed Company,
or the Stock Incentive Plan Notice, in February 2012, replacing the previous rules issued by SAFE in March 2007. Pursuant to the Stock
Incentive Plan Notice and other relevant rules and regulations, PRC residents participating in stock incentive plan in an overseas publicly-listed
company are required to register with SAFE or its local branches and follow certain other procedures. Participants of a stock incentive
plan who are PRC residents must conduct the SAFE registration and other procedures with respect to the stock incentive plan through a
qualified PRC agent, which could be a PRC subsidiary of the overseas publicly listed company or another qualified institution appointed
by the PRC subsidiary. In addition, the PRC agent is required to update the relevant SAFE registration should there be any material change
to the stock incentive plan, the PRC agent or other material changes. The PRC agent must, on behalf of the PRC residents who have the
right to exercise the employee stock options, apply to SAFE or its local branches for an annual quota for the payment of foreign currencies
in connection with the PRC residents' exercise of the employee stock options. The foreign exchange proceeds received by the PRC
residents from the sale of shares under the stock incentive plans granted and dividends distributed by the overseas listed companies must
be remitted into the bank accounts in the PRC opened by the PRC agents prior to distribution to such PRC residents.
We initially adopted an equity incentive plan
in 2018 under which we have the discretion to award incentives and rewards to eligible participants. On January 11, 2022, we terminated
the 2018 equity incentive plan and adopted the new equity incentive plan (the "2022 Plan"). On October 26, 2022, we terminated
the 2022 Plan and adopted the New 2022 EIP with 4,000,000 maximum authorized shares of Common Stock for issuance. We have advised the
recipients of awards under our equity incentive plan to handle relevant foreign exchange matters in accordance with the Stock Incentive
Plan Notice. However, we cannot guarantee that all employee awarded equity-based incentives can successfully register with SAFE in full
compliance with the Stock Incentive Plan Notice. See "
Risk Factors—Risks Related to Doing Business in China
"
E.
Taxation
The following is a general summary of the material
Marshall Islands, Hong Kong, BVI, PRC and U.S. federal income tax consequences relevant to an investment in our shares of common stock,
sometimes referred to collectively in this summary as our "securities". The discussion is not intended to be, nor should it
be construed as, legal or tax advice to any particular prospective purchaser. The discussion is based on laws and relevant interpretations
thereof in effect as of the date of this Annual Report, all of which are subject to change or different interpretations, possibly with
retroactive effect. The discussion does not address United States state or local tax laws, or tax laws of jurisdictions other than the
Marshall Islands, Hong Kong, the BVI, the PRC and the United States. We recommend that you consult your own tax advisors with respect
to the consequences of acquisition, ownership and disposition of our securities.
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Marshall Islands Taxation
The following are the material Marshall Islands
tax consequences of our activities to us and to our stockholders of investing in our Common Stock. Under current Marshall Islands law,
we are not subject to tax on income or capital gains, and no Marshall Islands withholding tax or income tax will be imposed upon payments
of dividends by us to our stockholders or proceeds from the disposition of our Common Stock, provided such stockholders are not residents
in the Marshall Islands. There is no tax treaty between the United States and the Republic of the Marshall Islands.
BVI Taxation
The BVI does not impose a withholding tax on dividends
paid to us by our BVI subsidiary, nor does the BVI levy any capital gains or income taxes on us or our BVI subsidiary. However, our BVI
subsidiary is required to pay the BVI government an annual license fee based on the number of shares it is authorized to issue.
There is no income tax treaty or convention currently
in effect between the United States and the BVI.
Hong Kong Taxation
Our Hong Kong subsidiaries, under the current
laws of Hong Kong, are subject to profits tax of 16.5%. No provision for Hong Kong profits tax has been made as our Hong Kong subsidiaries
have no taxable income.
PRC Taxation
We are a holding company incorporated in the Marshall
Islands, which indirectly holds our equity interests in our PRC operating subsidiaries. The EIT Law and its implementation rules, both
of which became effective as of January 1, 2008, provide that a PRC enterprise is subject to a standard income tax rate of 25% and China-sourced
income of foreign enterprises, such as dividends paid by a PRC subsidiary to its overseas parent, will normally be subject to PRC withholding
tax at a rate of 10%, unless there are applicable treaties between the overseas parent's jurisdiction of incorporation and China
to reduce such rate.
Under the Arrangement between the Mainland and
the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to
Taxes on Income, or the Double Taxation Arrangement, effective as of January 1, 2007, such dividend withholding tax rate is reduced to
5% if a Hong Kong resident enterprise owns over 25% of the PRC company distributing the dividends. Under the aforesaid arrangement, any
dividends that our PRC operating subsidiaries pay to their Hong Kong holding companies may be subject to a withholding tax at the rate
of 5% if they are not considered to be a PRC "resident enterprise" as described below. However, if the Hong Kong holdings
companies are not considered to be the "beneficial owner" of such dividends under the Notice Regarding Interpretation and
Recognition of Beneficial Owners under Tax Treaties promulgated by the State Administration of Taxation on October 27, 2009 (and not a
PRC "resident enterprise"), such dividends would be subject to the withholding tax rate of 10%. The withholding tax rate of
5% or 10% applicable will have a significant impact on the amount of dividends to be received by us and ultimately by shareholders.
According to the Notice Regarding Interpretation
and Recognition of Beneficial Owners under Tax Treaties, the term "beneficial owner" refers to a person who has the right
to own and dispose of the income and the rights or properties generated from the said income. The "beneficial owner" may be
an individual, a company or any other organization which is usually engaged in substantial business operations. A conduit company is not
a "beneficial owner." The term "conduit company" refers to a company which is usually established for purposes
of dodging or reducing taxes, and transferring or accumulating profits. Such a company is only registered in the country of domicile to
satisfy the organizational form as required by law, but it does not engage in such substantial business operations as manufacturing, distribution
and management. As our Hong Kong holding companies are controlling companies and are not engaged in substantial business operations, they
could be considered as conduit companies by tax authorities and we do not expect them to be a beneficial owner.
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In addition to the changes to the current tax
structure, under the EIT Law, an enterprise established outside of China with "de facto management bodies" within China is
considered a resident enterprise and will normally be subject to an EIT of 25% on its global income. The implementing rules define the
term "de facto management bodies" as "an establishment that exercises, in substance, overall management and control
over the production, business, personnel, accounting, etc., of a Chinese enterprise."
It remains unclear whether the PRC tax authorities
would require or permit our overseas registered entities to be treated as PRC resident enterprises. We do not currently consider our company
to be a PRC resident enterprise. However, if the PRC tax authorities determine that we are a "resident enterprise" for PRC
enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. First, we may be subject to the enterprise
income tax at a rate of 25% on our worldwide taxable income as well as PRC enterprise income tax reporting obligations. In our case, this
would mean that income such as interest on offering proceeds and non-China source income would be subject to PRC enterprise income tax
at a rate of 25%. Second, although under the EIT Law and its implementing rules dividends paid to us from our PRC subsidiaries would qualify
as "tax-exempt income," we cannot guarantee that such dividends will not be subject to a 10% withholding tax, as the PRC foreign
exchange control authorities, which enforce the withholding tax, have not yet issued guidance with respect to the processing of outbound
remittances to entities that are treated as resident enterprises for PRC enterprise income tax purposes. Finally, it is possible that
future guidance issued with respect to the new "resident enterprise" classification could result in a situation in which a
10% withholding tax is imposed on dividends we pay to our non-PRC shareholders and with respect to gains derived by our non-PRC shareholders
from transferring our shares.
U.S. Federal Income Taxation
The following is a discussion of certain material
U.S. federal income tax consequences of the acquisition, ownership and disposition of our securities. It does not purport to be a comprehensive
description of all of the tax considerations that may be relevant to a particular person's situation. The discussion applies only
to holders that hold their securities as capital assets (generally property held for investment) within the meaning of Section 1221 of
the Internal Revenue Code of 1986, as amended, or the Code. This discussion is based on the Code, income tax regulations promulgated thereunder,
judicial positions, published positions of the Internal Revenue Service, or the IRS, and other applicable authorities, all as in effect
as of the date hereof and all of which are subject to change, possibly with retroactive effect. This discussion is general in nature and
is not exhaustive of all possible tax considerations, nor does the discussion address any state, local or foreign tax considerations or
any U.S. tax considerations (e.g., estate or gift tax) other than U.S. federal income tax considerations, that may be applicable to particular
holders.
This discussion does not address all aspects of
U.S. federal income taxation that may be relevant in light of particular circumstances, nor does it address the U.S. federal income tax
consequences to persons who are subject to special rules under U.S. federal income tax law, including:
●
banks, insurance companies or other financial institutions;
●
persons subject to the alternative minimum tax;
●
tax-exempt organizations;
●
controlled foreign corporations, passive foreign investment companies and corporations that accumulate earnings to avoid United States federal income tax;
●
certain former citizens or long-term residents of the United States;
●
dealers in securities or currencies;
●
traders in securities that elect to use a mark-to-market method of accounting for their securities holdings;
●
persons that own, or are deemed to own, more than five percent of our capital stock;
●
holders who acquired our stock as compensation or pursuant to the exercise of a stock option; or
●
persons who hold our shares as a position in a hedging transaction, "straddle," or other risk reduction transaction.
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For purposes of this discussion, a U.S. holder
is (i) an individual who is a citizen or resident of the United States for U.S. federal income tax purposes; (ii) a corporation, or other
entity treated as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States (or
treated as such under applicable U.S. tax laws), any state thereof, or the District of Columbia; (iii) an estate the income of which is
subject to U.S. federal income tax regardless of its source; or (iv) a trust if (a) a U.S. court is able to exercise primary supervision
over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust,
or (b) it has a valid election in effect under applicable law and regulations to be treated as a U.S. person for U.S. federal income tax
purposes. A non-U.S. holder is a holder that is neither a U.S. holder nor a partnership or other entity classified as a partnership for
U.S. federal income tax purposes.
In the case of a partnership or entity classified
as a partnership for U.S. federal income tax purposes, the U.S. federal income tax treatment of a partner generally will depend on the
status of the partner and the activities of the partnership. Partners of partnerships should consult their tax advisors regarding the
U.S. federal income tax consequences to them of the merger or of the ownership and disposition of our shares.
As a result of consummation of the Share Exchange,
(i) we acquired substantially all the properties of KBS International, a U.S. corporation, and (ii) the former shareholders of KBS International
held at least 80 percent of our Common Stock by reason of having held stock of KBS International. Accordingly, under Section 7874 of the
Code, we are treated for U.S. federal tax purposes as a U.S. corporation and, among other consequences, are subject to U.S. federal income
tax on our worldwide income. This discussion assumes that Section 7874 of the Code continues to apply to treat us as a U.S. corporation
for all purposes under the Code. If, for some reason (e.g., future repeal of Section 7874 of the Code), we were no longer treated as a
U.S. corporation under the Code, the U.S. federal income tax consequences described herein could be materially and adversely affected.
U.S. Federal Income Tax Consequences for U.S. Holders
Distributions
In the event that distributions are paid on our
common stock, the gross amount of such distributions will be included in the gross income of the U.S. holder as dividend income on the
date of receipt to the extent that the distribution is paid out of current or accumulated earnings and profits, as determined under U.S.
federal income tax principles. Such dividends will be eligible for the dividends-received deduction allowed to corporations in respect
of dividends received from other U.S. corporations. Dividends received by non-corporate U.S. holders, including individuals, may be subject
to reduced rates of taxation under current law. A U.S. holder may be eligible to claim a foreign tax credit with respect to any PRC withholding
tax imposed on dividends paid by us. However, the foreign tax credit rules are complex, and their application in connection with Section
7874 of the Code and the Agreement Between the Government of the United States of America and the Government of the People's Republic
of China for the Avoidance of Double Taxation and the Prevention of Tax Evasion with Respect to Taxes on Income, or the U.S.-PRC Tax Treaty,
is not entirely clear at this time. U.S. holders should consult their own tax advisors with respect to any benefits they may be entitled
to under the foreign tax credit rules and the U.S.-PRC Tax Treaty.
The extent that dividends paid on our Common
Stock exceed current and accumulated earnings and profits, the distributions will be treated first as a tax-free return of tax basis on
our Common Stock, and to the extent that the amount of the distribution exceeds tax basis, the excess will be treated as gain from the
disposition of those common stock. Because Section 7874 of the Code has applied to treat us as a U.S. corporation only since the consummation
of the Share Exchange in 2014, we may not be able to demonstrate to the IRS the extent to which a distribution on our common stock exceeds
our current and accumulated earnings and profits (as determined under U.S. federal income tax principles), in which case all of such distribution
will be treated as a dividend for U.S. federal income tax purposes.
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Sale or Other Disposition
U.S. holders of our Common Stock will recognize
taxable gain or loss on any sale, exchange, or other taxable disposition of common stock equal to the difference between the amount realized
for the common stock and the U.S. holder's tax basis in the common stock. This gain or loss generally will be capital gain or loss.
Under current law, non-corporate U.S. holders, including individuals, are eligible for reduced tax rates if the common stock has been
held for more than one year. The deductibility of capital losses is subject to limitations. A U.S. holder may be eligible to claim a foreign
tax credit with respect to any PRC withholding tax imposed on gain from the sale or other disposition of common stock. However, the foreign
tax credit rules are complex, and their application in connection with Section 7874 of the Code and the U.S.-PRC Tax Treaty is not entirely
clear at this time. U.S. holders should consult their own tax advisors with respect to any benefits they may be entitled to under the
foreign tax credit rules and the U.S.-PRC Tax Treaty.
Unearned Income Medicare Contribution
Certain U.S. holders who are individuals, trusts
or estates are required to pay an additional 3.8% Medicare tax on, among other things, dividends on and capital gains from the sale or
other disposition of shares of stock. U.S. holders should consult their own advisors regarding the effect, if any, of this rule on their
ownership and disposition of our Common Stock.
U.S. Federal Income Tax Consequences for
Non-U.S. Holders
Distributions
The rules applicable to non-U.S. holders for determining
the extent to which distributions on our Common Stock, if any, constitute dividends for U.S. federal income tax purposes are the same
as for U.S. holders.
See "–U.S. Federal Income Tax Consequences for U.S. Holders– Distributions."
Any dividends paid to a non-U.S. holder by us
are treated as income derived from sources within the United States and generally will be subject to U.S. federal income tax withholding
at a rate of 30% of the gross amount of the dividends, or at a lower rate provided by an applicable income tax treaty if non-U.S. holders
provide proper certification of eligibility for the lower rate (usually on IRS Form W-8BEN or W-8BEN-E). Dividends received by a non-U.S.
holder that are effectively connected with such holder's conduct of a U.S. trade or business (and, if an income tax treaty applies,
are attributable to a permanent establishment maintained by the non-U.S. holder in the U.S.) are exempt from such withholding tax, provided
that applicable certification requirements are satisfied. In such case, however, non-U.S. holders will be subject to U.S. federal income
tax on such dividends, net of certain deductions, at the rates applicable to U.S. persons. In addition, corporate non-U.S. holders may
be subject to an additional branch profits tax equal to 30% or such lower rate as may be specified by an applicable tax treaty on dividends
received that are effectively connected with the conduct of a trade or business in the United States.
If non-U.S. holders are eligible for a reduced
rate of U.S. withholding tax pursuant to an applicable income tax treaty, such non-U.S. holders may obtain a refund of any excess amounts
withheld by filing an appropriate claim for refund with the IRS.
Sale or Other Disposition
Except as described below for a reduced rate of
U.S. withholding tax pursuant to an applicable income tax treaty, any gain realized by a non-U.S. holder upon the sale or other disposition
of our Common Stock generally will not be subject to U.S. federal income tax unless:
●
the gain is effectively connected with the conduct of a trade or business in the United States by such non- U.S. holder, and, if an income tax treaty applies, is attributable to a permanent establishment maintained by such non-U.S. holder in the U.S.;
●
the non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of the disposition, and certain other conditions are met; or
●
We are or have been a "U.S. real property holding corporation," or USRPHC, for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period during which the holder has held our Common Stock.
103
Non-U.S. holders whose gain is described in the
first bullet point above will be subject to U.S. federal income tax on the gain derived from the sale, net of certain deductions, at the
rates applicable to U.S. persons. Corporate non-U.S. holders whose gain is described in the first bullet point above may also be subject
to the branch profits tax described above at a 30% rate or lower rate provided by an applicable income tax treaty. Individual non-U.S.
holders described in the second bullet point above will be subject to a flat 30% U.S. federal income tax rate on the gain derived from
the sale, which may be offset by U.S.-source capital losses, even though such non-U.S. holders are not considered to be residents of the
United States.
A corporation will be a USRPHC if the fair market
value of its U.S. real property interests equals or exceeds 50 percent of the aggregate of its real property interests (U.S. and non-U.S.)
and its assets used or held for use in a trade or business. Because we do not currently own significant U.S. real property, we believe
that we are not currently and will not become a USRPHC. However, because the determination of whether we are a USRPHC depends on the fair
market value of our U.S. real property relative to the fair market value of our other business assets, there can be no assurance that
we will not become a USRPHC in the future. Even if we become a USRPHC, however, as long as our common stock are regularly traded on an
established securities market, such common stock will be treated as U.S. real property interests only if a non-U.S. holder actually or
constructively holds more than 5% of such regularly traded common stock at any time during the applicable period that is specified in
the Code.
Foreign Account Tax Compliance
The Foreign Account Tax Compliance provisions
of the Hiring Incentives to Restore Employment Act (generally referred to as "FATCA"), when applicable, will impose a U.S.
federal withholding tax of 30% on payments of dividends on, and (for dispositions after December 31, 2018) gross proceeds from dispositions
of, our common stock that are held through "foreign financial institutions" (which is broadly defined for this purpose and
in general includes investment vehicles) and certain other non-U.S. entities unless various U.S. information reporting and due diligence
requirements (generally relating to ownership by U.S. persons of certain interests in or accounts with those entities) have been satisfied
or an exemption applies. An intergovernmental agreement between the United States and an applicable foreign country may modify these requirements.
U.S. Holders should consult their tax advisers regarding the effect, if any, of the FATCA provisions on their particular circumstances.
Information Reporting and Backup Withholding
Payments of dividends or of proceeds on the disposition
of stock made to a holder of our Common Stock may be subject to information reporting and backup withholding at a current rate of 24%
unless such holder provides a correct taxpayer identification number on IRS Form W-9 (or other appropriate withholding form) or establishes
an exemption from backup withholding, for example by properly certifying the holder's non-U.S. status on a Form W-8BEN, Form W-8BEN-E
or another appropriate version of IRS Form W-8. Payments of dividends to holders must generally be reported annually to the IRS, along
with the name and address of the holder and the amount of tax withheld, if any. A similar report is sent to the holder. Pursuant to applicable
income tax treaties or other agreements, the IRS may make these reports available to tax authorities in the holder's country of
residence.
Backup withholding is not an additional
tax; rather, the U.S. income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If
withholding results in an overpayment of taxes, a refund or credit may generally be obtained from the IRS, provided that the required
information is furnished to the IRS in a timely manner
F.
Dividends and Paying Agents
Not applicable.
G.
Statement by Experts
Not applicable.
104
H.
Documents on Display
We have filed this annual report on Form 20-F
with the SEC under the Exchange Act. Statements made in this report as to the contents of any document referred to are not necessarily
complete. With respect to each such document filed as an exhibit to this report, reference is made to the exhibit for a more complete
description of the matter involved, and each such statement shall be deemed qualified in its entirety by such reference.
We are subject to the informational requirements
of the Exchange Act as a foreign private issuer and file reports and other information with the SEC. Reports and other information filed
by us with the SEC including this report, may be inspected and copied at the public reference room of the SEC at 100 F Street, N.E., Washington
D.C. 20549. You can also obtain copies of this report by mail from the Public Reference Section of the SEC, 100 F. Street, N.E., Washington
D.C. 20549, at prescribed rates. Additionally, copies of this material may be obtained from the SEC's Internet site at http://www.sec.gov.
The SEC's telephone number is 1-800-SEC-0330. In accordance with NASDAQ Stock Market Rule 5250(d), we will also post this annual
report on Form 20-F on our website at www.kbsfashion.com.
As a foreign private issuer, we are exempt from
the rules under the Exchange Act prescribing the furnishing and content of quarterly reports and proxy statements, and officers, directors
and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange
Act.
I.
Subsidiary Information
Not applicable.
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
Interest Rate Risk
We deposit surplus funds with Chinese banks earning
daily interest. We do not invest in any instruments for trading purposes. Most of our outstanding debt instruments carry fixed rates of
interest. Our operations generally are not directly sensitive to fluctuations in interest rates and we currently do not have any long-term
debt outstanding. Management monitors the banks' prime rates in conjunction with our cash requirements to determine the appropriate
level of debt balances relative to other sources of funds. We have not entered into any hedging transactions in an effort to reduce our
exposure to interest rate risk.
Foreign Exchange Risk
While our reporting currency is the U.S. dollar,
substantially all of our consolidated revenues and consolidated costs and expenses are denominated in RMB. Substantially all 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 the 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. Assets and liabilities are translated
at exchange rates at the balance sheet dates and revenue and expenses are translated at the average exchange rates and equity is translated
at historical exchange rates. Any resulting translation adjustments are not included in determining net income but are included in determining
other comprehensive income, a component of equity. An average appreciation (depreciation) of the RMB against the U.S. dollar of 5% would
increase (decrease) our comprehensive income by $3.0 million based on our outstanding revenues, costs and expenses, assets and liabilities
denominated in RMB as of December 31, 2019. As of December 31, 2020, our accumulated other comprehensive loss was $(3.5) million. We have
not entered into any hedging transactions in an effort to reduce our exposure to foreign exchange risk.
The value of RMB against the U.S. dollar and other
currencies is affected by, among other things, changes in China's political and economic conditions. Since July 2005, RMB has not
been pegged to the U.S. dollar. Although the People's Bank of China regularly intervenes in the foreign exchange market to prevent
significant short-term fluctuations in the exchange rate, RMB may appreciate or depreciate significantly in value against the U.S. dollar
in the medium to long term. Moreover, it is possible that in the future, PRC authorities may lift restrictions on fluctuations in RMB
exchange rate and lessen intervention in the foreign exchange market.
105
Inflation
Inflationary factors such as increases in the
cost of our product and overhead costs may adversely affect our operating results. Although we do not believe that inflation has had a
material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse
effect on our ability to maintain current levels of gross margin and selling, general and administrative expenses as a percentage of net
revenues if the selling prices of our products do not increase with these increased costs.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN
EQUITY SECURITIES
A.
Debt Securities
Not applicable.
B.
Warrants and Rights
Not applicable.
C.
Other Securities
Not applicable.
D.
American Depositary Shares
We do not have any American Depositary Shares.
106
PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND
DELINQUENCIES
None.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS
OF SECURITY HOLDERS AND USE OF PROCEEDS
None.
ITEM 15. CONTROLS AND PROCEDURES
A.
Disclosure Controls and Procedures
Our management, with the participation of our
CEO and CFO, has evaluated the effectiveness of the Company's disclosure controls and procedures, as defined in Rule 13a-15(e) and
15d-15(e) of the Exchange Act, as of December 31, 2022.
The term "disclosure controls and procedures"
as defined in Rules 13a-15(e) and 15d-15(e) means controls and other procedures of the Company that are designed to ensure that information
required to be disclosed by a company in reports, such as this report, that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SEC rules and forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files
or submits under the Exchange Act is accumulated and communicated to the company's management, including its principal executive
and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any
controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives,
and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Based on that evaluation, our CEO and interim
CFO concluded that our disclosure controls and procedures were not effective as of December 31, 2022, due to a material weakness in our
internal control over financial reporting. Specifically, we currently lack sufficient accounting personnel with the appropriate level
of knowledge, experience and training in IFRS and SEC reporting requirements.
B.
Management's Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing
and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is designed to provide
reasonable assurances regarding the reliability of financial reporting and the preparation of our consolidated financial statements in
accordance with IFRS. Our accounting policies and internal controls over financial reporting, established and maintained by management,
are under the general oversight of the Board's audit committee.
Our internal control over financial reporting
includes those policies and procedures that:
●
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
●
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
●
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the financial statements.
107
Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance
with the policies or procedures may deteriorate.
Management assessed our internal control over financial reporting as
of December 31, 2022.The standard measures adopted by management in making its evaluation are the measures in the Internal-Control Integrated
Framework published by the Committee of Sponsoring Organizations of the Treadway Commission.
Based on management's assessment using the
COSO criteria, our CEO and CFO concluded that our internal control over financial reporting as of December 31, 2021 was ineffective. 
We have taken, and are taking, certain actions to remediate the material weakness related to our lack of IFRS and SEC reporting experience.
We engaged a consultant with IFRS knowledge and experience to supplement our current internal accounting personnel and assist us in the
preparation of our financial statements to ensure that our financial statements are prepared in accordance with IFRS.
The Company continues to make efforts to implementing
our existing and newly adopted procedures to improve our disclosure controls and internal controls over financing reporting.
C.
Attestation Report of the Registered Public Accounting Firm
Because the Company is a non-accelerated filer,
this annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial
reporting.
D.
Changes in Internal Controls over Financial Reporting
Other than discussed above, there has been no
change to our internal control over financial reporting that occurred during the period covered by this annual report on Form 20-F that
has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
The audit committee of our board of directors
currently consists of three members, Mu Ruifeng, Jin Yan and Baojun Zhu. Our board of directors has determined that all of our audit committee
members are "independent" under the Exchange Act and have the requisite financial knowledge and experience to serve as members
of our audit committee. In addition, our board of directors has determined that audit committee financial expert is an "audit committee
financial expert" as defined in Item 16A of the Instructions to Form 20-F and meets NASDAQ's financial sophistication requirements
due to his current and past experience in various companies in which he was responsible for, amongst others, the financial oversight responsibilities.
ITEM 16B. CODE OF ETHICS
On October 25, 2014, our Audit Committee adopted
a Code of Ethics that applies to all of the directors, officers and employees of the Company and its subsidiaries, including our principal
executive officer, principal financial officer and principal accounting officer. The Code of Ethics addresses, among other things, honesty
and ethical conduct, conflicts of interest, compliance with laws, regulations and policies, including disclosure requirements under the
federal securities laws, confidentiality, trading on inside information, and reporting of violations of the code. A copy of the Code of
Ethics is filed as Exhibit 11.1 to the annual report on Form 20-F filed on October 27, 2015. Copies of our Code of Ethics are available
in print, free of charge, upon request to JX Luxventure Limited
，
Bin
Hai Da Dao No. 270
，
Lang Qin Wan Guo Ji Du Jia Cun Zong He Lou
，
Xiu
Ying District, Haikou City, Hainan Province 570100, People's Republic of China. During the fiscal year ended December 31, 2022,
there were no waivers of our Code of Ethics.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table sets forth the aggregate fees
by categories specified below in connection with services rendered by our principal external auditors for the periods indicated.
Fiscal Year Ended
December 31,
2021
2022
Audit Fees*
$
250,000
$
210,000
*
"Audit Fees" consisted of the aggregate fees billed for professional services rendered for the audit of our annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements.
108
Our Audit Committee pre-approves all auditing
services and permitted non-audit services to be performed for us by our independent auditor, including the fees and terms thereof (subject
to the de minimums exceptions for non-audit services described in Section 10A(i)(l)(B) of the Exchange Act that are approved by our Audit
Committee prior to the completion of the audit).
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS
FOR AUDIT COMMITTEES
Prior to July 10, 2017, in lieu of an audit
committee comprised of three independent directors, our audit committee was comprised of two independent members of our board of
directors, namely, John Sano and Matthew C. Los. On July 10, 2017, the board of directors appointed Ms. Yuet Mei Chan as an
independent director and a member of the audit committee. On October 21, 2020, John Sano and Matthew C. Los resigned from their
positions as independent directors of the Company and on October 25, 2020, Mr. Mu Ruifeng and Mr. Jin Yan were appointed as
independent directors of the Company and member of the Audit Committee of the Company. On May 2, 2022, Yuet Mei Chan resigned from
her position as independent director of the Company and on May 3, 2022, Mr. Baojun Zhu was appointed as independent directors of the
Company and a member of the Audit Committee of the Company. As a result, we are in full compliance with the Nasdaq listing rules for
the audit committee.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY
THE ISSUER AND AFFILIATED PURCHASERS
There were no purchases of equity securities made
by or on behalf of us or any "affiliated purchaser" as defined in Rule 10b-18 of the Exchange Act during the period covered
by this Annual Report.
ITEM 16F. CHANGE IN REGISTRANT'S CERTIFYING
ACCOUNTANT
None.
ITEM 16G. CORPORATE GOVERNANCE
We were incorporated in the Republic of the Marshall
Islands ("RMI") and our corporate governance practices are governed by applicable RMI law, our Restated Articles and bylaws.
In addition, because our Common Stock is listed on NASDAQ, we are subject to NASDAQ's corporate governance requirements.
NASDAQ Listing Rule 5615(a)(3) permits a foreign
private issuer like us to follow home country practices in lieu of certain requirements of Listing Rule 5600, provided that such foreign
private issuer discloses in its annual report filed with the SEC each requirement of Rule 5600 that it does not follow and describes the
home country practice followed in lieu of such requirement. Our RMI counsel has provided a letter to NASDAQ indicating that we have elected
to follow home country practices in lieu of NASDAQ Listing Rule 5600 with the exception of those rules which are required to be followed
pursuant to the provisions of Nasdaq Listing Rule 5615(a)(3), and our practices with regards to these NASDAQ requirements are not prohibited
by the laws of the RMI. We currently follow our home country practice that (i) does not require us to hold an annual meeting of shareholders
no later than one year after the end of its fiscal year, (ii) does not require us to seek shareholder approval for the adoption of share
incentive plans; and (iii) does not require us to establish a compensation committee or nominating committee or nominating process. As
a result,
●
in lieu of having a compensation committee under Nasdaq Listing Rule 5605(d), we currently do not have a compensation committee;
●
in lieu of selecting or recommending director nominees for selection by either a majority of the independent directors or a nominating committee comprised solely of independent directors under Nasdaq Listing Rule 5605(e), we currently do not have a nominating committee or such nominating process;
●
in lieu of holding a shareholder meeting each year under Nasdaq Listing Rule 5620(a), we did not hold an annual shareholder meeting in fiscal 2019; however, we may, hold annual shareholder meetings in the future if there are significant issues that require shareholders' approvals; and
●
in lieu of obtaining shareholder approval under Nasdaq Listing Rule 5635(c) prior to the adoption of an agreement pursuant to which stock may be acquired by officers, directors, employees or consultants, our board of directors approves such adoption, including our 2018 equity incentive plan.
ITEM 16H. MINE SAFETY DISCLOSURE
Not applicable.
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS
THAT PREVENT INSPECTIONS
Not applicable.
109
PART III
ITEM 17. FINANCIAL STATEMENTS
We have elected to provide financial statements
pursuant to Item 18.
ITEM 18. FINANCIAL STATEMENTS
The financial statements are filed as part of
this annual report beginning on page F-1.
ITEM 19. EXHIBITS
Exhibit
    No.
Description
1.1
Amended
    and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.3 to the Amendment No. 4 to the registrant's
    Registration Statement on Form F-1 filed on October 24, 2012 (Commission File No. 333-180571)).
1.2
Articles
    of Amendment to the Amended and Restated Articles of Incorporation, filed with the Office of the Registrar of Corporations of Republic
    of the Marshall Islands on October 31, 2014 (incorporated by reference to Exhibit 1.2 to the Annual Report on Form 20-F filed by
    the registrant on October 27, 2015)
1.3
Articles
    of Amendment to the Amended and Restated Articles of Incorporation, filed with the Office of the Registrar of Corporations of Republic
    of the Marshall Islands on February 3, 2017 (incorporated by reference to Exhibit 99.1 to the Report of Foreign Private Issuer on
    Form 6-K furnished by the registrant on February 3, 2017)
1.4
Articles of Amendment to the Amended and Restated Articles of Incorporation, filed with the Office of the Registrar of Corporations of Republic of the Marshall Islands on June 21, 2021 (incorporated by reference to Exhibit 1.4 to the Annual Report on Form 20-F filed by the registrant on May 13, 2022)
1.5
Articles
    of Amendment to the Amended and Restated Articles of Incorporation, filed with the Office of the Registrar of Corporations of Republic
    of the Marshall Islands on October 4, 2021 (incorporated by reference to Exhibit 3.1 to the Report of Foreign  Private Issuer
    on Form 6-K filed by the registrant on October 7, 2021)
1.6
Articles
    of Amendment to the Amended and Restated Articles of Incorporation, filed with the Office of the Registrar of Corporations of
    Republic of the Marshall Islands on April 25, 2023 (incorporated by reference to Exhibit 3.1 to the Report of Foreign Private Issuer
    on Form 6-K filed by the registrant on April 25, 2023)
1.7
By-laws
    as amended on September 22, 2014 (incorporated by reference to Exhibit 1.3 to the Annual Report on Form 20-F filed by the registrant
    on October 27, 2015)
2.1
Specimen
    of Common Stock Certificate (incorporated by reference to Exhibit 2.2 to the Annual Report on Form 20-F filed by the registrant on
    October 27, 2015)
2.2
Certificate of Designation, Preferences and Rights of Series A Convertible Preferred Stock, filed with the Office of the Registrar of Corporations of Republic of the Marshall Islands on April 25, 2022 (incorporated by reference to Exhibit 2.2 to the Annual Report on Form 20-F filed by the registrant on May 13, 2022)
2.3
Certificate of Designation, Preferences and Rights of Series B Participating Preferred Stock , filed with the Office of the Registrar of Corporations of Republic of the Marshall Islands on April 25, 2022 (incorporated by reference to Exhibit 2.3 to the Annual Report on Form 20-F filed by the registrant on May 13, 2022)
2.4
Certificate of Designation, Preferences and Rights of Series C Convertible Preferred Stock, filed with the Office of the Registrar of Corporations of Republic of the Marshall Islands on April 25, 2022 (incorporated by reference to Exhibit 2.4 to the Annual Report on Form 20-F filed by the registrant on May 13, 2022)
2.5
Certificate of Designation, Preferences and Rights of Series D Convertible Preferred Stock, filed with the Office of the Registrar of Corporations of Republic of the Marshall Islands on April 25, 2022 (incorporated by reference to Exhibit 2.5 to the Annual Report on Form 20-F filed by the registrant on May 13, 2022)
2.6
Amended and Restated Certificate of Designation, Preferences and Rights of Series A Convertible Preferred Stock, filed with the Office of the Registrar of Corporations of Republic of the Marshall Islands on April 27, 2022 (incorporated by reference to Exhibit 2.6 to the Annual Report on Form 20-F filed by the registrant on May 13, 2022)
2.7
Amended and Restated Certificate of Designation, Preferences and Rights of Series B Participating Preferred Stock, filed with the Office of the Registrar of Corporations of Republic of the Marshall Islands on April 27, 2022 (incorporated by reference to Exhibit 2.7 to the Annual Report on Form 20-F filed by the registrant on May 13, 2022)
2.8
Amended and Restated Certificate of Designation, Preferences and Rights of Series C Convertible Preferred Stock, filed with the Office of the Registrar of Corporations of Republic of the Marshall Islands on April 27, 2022 (incorporated by reference to Exhibit 2.8 to the Annual Report on Form 20-F filed by the registrant on May 13, 2022)
2.9
Amended and Restated Certificate of Designation, Preferences and Rights of Series D Convertible Preferred Stock, filed with the Office of the Registrar of Corporations of Republic of the Marshall Islands on April 27, 2022 (incorporated by reference to Exhibit 2.9 to the Annual Report on Form 20-F filed by the registrant on May 13, 2022)
2.10
Second Amended and Restated Certificate of Designation, Preferences and Rights of Series A Convertible Preferred Stock, filed with the Office of the Registrar of Corporations of Republic of the Marshall Islands on May 10, 2022 (incorporated by reference to Exhibit 2.10 to the Annual Report on Form 20-F filed by the registrant on May 13, 2022)
2.11*
Description of Securities
4.1
English Translation of the Employment Agreement between the registrant and Sun Lei, Chief Executive Officer, dated July 12, 2022 (incorporated by reference to Exhibit 10.1 of the Report of Foreign Private Issuer on Form 6-K filed by the registrant on July 12, 2022)
4.2
Stock Purchase Agreement between the registrant and Shenzhen Zhongjiyingfeng Investment Co., Ltd. dated October 19, 2022 (incorporated by reference to Exhibit 10.1 of the Report of Foreign Private Issuer on Form 6-K filed by the registrant on October 19, 2022)
4.3
Purchase Note related to the Stock Purchase Agreement between the registrant and Shenzhen Zhongjiyingfeng Investment Co., Ltd. dated October 19, 2022 (incorporated by reference to Exhibit 10.2 of the Report of Foreign Private Issuer on Form 6-K filed by the registrant on October 19, 2022)
110
4.4
Pledge and Security Agreement between the registrant and Shenzhen Zhongjiyingfeng Investment Co., Ltd. dated October 19, 2022 (incorporated by reference to Exhibit 10.3 of the Report of Foreign Private Issuer on Form 6-K filed by the registrant on October 19, 2022)
4.5
2022
    Equity Incentive Plan (incorporated by reference to Exhibit 99.1 to the Registration Statement on Form S-8 filed by the registrant
    on February 11, 2022)
4.6
The new 2022 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Report of Foreign Private Issuer on Form 6-K filed by the registrant on November 1, 2022)
4.7
Rights
    Agreement between KBS Fashion Group Limited and American Stock Transfer & Trust Company, LLC, as rights agent, dated March
    11, 2021 (incorporated by reference to Exhibit 4.1 to the Report of Foreign Private Issuer on Form 6-K filed by the registrant on
    March 15, 2021)
4.8
Share
    Exchange Agreement, by and among, KBS Fashion Group Limited, Flower Crown Holding and the shareholders of Flower Crown Holding, dated
    December 21, 2020 (incorporated by reference to Exhibit 10.1 to the Report of Foreign Private Issuer on Form 6-K/A filed by the registrant
    on December 28, 2020)
4.9
Stock
    Purchase Agreement, by and between KBS Fashion Group Limited and Sun Lei, dated December 21, 2020 (incorporated by reference to Exhibit
    10.2 to the Report of Foreign Private Issuer on Form 6-K/A filed by the registrant on December 28, 2020)
4.9
English Translation of Cross-Border Payment Agreement between Flower Crown (Hainan) Cross-Border E-Commerce Co., Ltd and Hainan New Generation Technology Co., Ltd., dated December 25, 2020 (incorporated by reference to Exhibit 10.1 to the Report of Foreign Private Issuer on Form 6-K filed by the registrant on March 29, 2021)
8.1*
List of the registrant's subsidiaries
10.1
Form of Lock-up Agreement with holder of Series A Convertible Preferred Stock (incorporated by reference to the Report of Foreign Private Issuer on Form 6-K filed by the registrant on April 12, 2021)
10.2
English Translation of Digital RMB Acceptance Agreement (incorporated by reference to the Report of Foreign Private Issuer on Form 6-K filed by the registrant on April 12, 2021)
10.3
English Translation of Cross-Border Payment Agreement (incorporated by reference to the Report of Foreign Private Issuer on Form 6-K filed by the registrant on March 29, 2021)
10.4
Strategic Cooperation Framework Agreement on Cross-border Supply Chain of Duty-free Merchandise (incorporated by reference to Exhibit 10.1 to the Report of Foreign Private Issuer on Form 6-K filed by the registrant on March 15, 2022)
10.5
Framework Agreement on Strategic Cooperation executed by and between Jin Xuan Luxury Tourism (Hainan) Digital Technology Co., Ltd., a subsidiary of the registrant, and Ragdoll International Trading Co., Ltd. dated March 31, 2022 (incorporated by reference to Exhibit 10.1 of the Report of Foreign Private Issuer on Form 6-K filed by the registrant on April 4, 2022)
10.6
English
    Translation of
Group Airline Ticket Framework Agreement by and between Beijing Heyang
    International Travel Service Co., Ltd., a registrant's subsidiary, and Tianjin China Travel International Travel Service Co.,
    Ltd. dated May 21, 2022 (incorporated by reference to Exhibit 10.1 of the Report of Foreign Private Issuer on Form 6-K furnished May
    24, 2022)
10.7
English Translation of
Framework Agreement on Strategic Cooperation by and between Jin Xuan Luxury Tourism (Hainan) Digital Technology Co., Ltd., a subsidiary of the registrant and Hainan Douxing Cultural Media Co., Ltd. dated June 17, 2022 (incorporated by reference to Exhibit 10.1 of the Report of Foreign Private Issuer on Form 6-K furnished June 24, 2022)
10.8
English Translation of the Cooperation Agreement by and between
Jin Xuan (Hainan) Holding Co., Ltd., a subsidiary of the Company, and Kaiwo International Trading Co. Ltd. dated July 26, 2022 (incorporated by reference to Exhibit 10.1 of the Report of Foreign Private Issuer on Form 6-K furnished July 26, 2022
10.9
English Translation of Strategic Cooperation Agreement by and between
Flower Crown (China) Holding Group Co., Ltd. ("JXFC"), a subsidiary of the registrant and with Hainan Hang Seng Zhongli Commercial Holding Co., Ltd.  dated October 3, 2022 (incorporated by reference to Exhibit 10.1 of the Report of Foreign Private Issuer on Form 6-K furnished October 3, 2022
11.1
Code of Ethics, adopted on October 25, 2014 (incorporated by reference to Exhibit 11.1 to the Annual Report on Form 20-F filed by the registrant on October 27, 2015)
12.1/12.2*
Certifications of Chief Executive Officer and Chief Financial Officer
    Pursuant to Rule 13a-14(a) or Rule 15d-1(a)
13.1/13.2*
Certifications of Chief Executive Officer and Chief Financial Officer
    Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
15.1*
Consent from Onestop Assurance PAC, Independent Registered Public Accounting Firm
15.2*
Consent from WWC, P.C., Independent Registered Public Accounting Firm
101.INS**
Inline XBRL Instance Document.
101.SCH
**
Inline XBRL Taxonomy Extension Schema Document.
101.CAL
**
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF
**
Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB
**
Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE
**
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104
**
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
*
Filed herewith.
**
Filed by amendment.
111
SIGNATURE
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 report on its
behalf.
Date: May 12, 2023
JX Luxventure Limited
/s/ Sun Lei
Sun Lei
Chief Executive Officer
112
JX Luxventure Limited
Consolidated Financial Statements
For the years ended December 31, 2022, 2021, and
2020
(Stated in US dollars)
113
CONTENTS
PAGES
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
F-2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
F-6
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
F-7
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
F-8
CONSOLIDATED STATEMENTS OF CASH FLOWS
F-9
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F-10 - F-47
F-
1
Report of Independent Registered Public Accounting
Firm
To the shareholders and board of directors
of JX Luxventure Limited.
Opinion on the Financial Statements
We
have audited the accompanying consolidated balance sheets of JX Luxventure Limited (the "Company") as of December 31, 2022
and 2021, the related consolidated statements of operation and comprehensive loss, stockholders' equity, and cash flows,
for
each of the two years in the period ended
December 31, 2022, and the related
notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in
all material respects, the financial positions of the Company as of December 31, 2022 and 2021, and the results of its operation and its
cash flows
for each of the two years in the period ended
December 31,
2022, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
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 Public Company Accounting Oversight Board (United States)
("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits
in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance
about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required
to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness
of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing
procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management,
as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for
our opinion.
Critical Audit
Matter
The critical audit matters
communicated below are matters arising from the current period audit of the financial statements that was communicated or required to
be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements
and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not
alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter
below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
F-
2
Revenue Recognition
As described in Note 7 and Note 8 to the financial
statements, the company shifted to tourism industry through acquisition of Flower Crown and disposition of menswear business. Compared
with last year, revenue from Tourism industry increased by 53% from 51.8 million to 79.1 million this year. For it's tourism business,
the Company determines itself as principal and recognizes revenue for the gross proceeds received from customers.
Significant judgment is exercised by the Company
in determining itself as principal and recognize revenue for the gross proceeds received from customers, includes the following:
●
The Company controls the ticket before transferring of the ticket
(the right) to the customer (the online platform), because the Company need to secure the seat from the airline by making a full payment
to the airline before obtaining a contract with a customer.
●
The Company has the ability to direct the use of the ticket
and obtains the remaining benefits or taking the loss from the ticket by reselling the ticket or using the ticket itself.
●
The Company's responsibility is to make sure passengers
can take the flight as their wishes.
●
The Company also has inventory risk because the Company makes
full payment to the airlines to secure the right before obtaining a contract with the customer to purchase the ticket.
●
Other than the air ticket itself, the Company also provide financing
or guarantee function to the customer, which are not provided by the airline.
Given these factors and due to the volume of transactions,
the related audit effort in evaluating management's judgments in determining itself as principal and recognize revenue for the gross proceeds
received from customers were extensive and required a high degree of auditor judgment.
Our principal audit procedures related to the
Company's revenue recognition included the following:
●
We tested the timing of the Company making a full payment of
airline tickets recorded in system to determine if the company purchased the ticket before transferring the ticket (the flight) to the
customer.
●
We evaluated management's significant accounting policies related
to these tickets selling for reasonableness.
●
We
tested a sample of flight information in sales report and compared to publicly available information to determine the authenticity of
the transaction.
●
We tested the mathematical accuracy of management's calculations
of revenue and the associated timing of revenue recognized in the financial statements.
/s/ Onestop Assurance PAC
We have served as the Company's auditor
since 2022.
Singapore
May 12, 2023
PCAOB ID number: 6732
F-
3
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To:
The
Board of Directors and Stockholders of
KBS
Fashion Group Limited
Opinion
on the Financial Statements
We
have audited the accompanying consolidated statements of financial position of KBS Fashion Group Limited (the Company) as of December
31, 2020 and 2019, and the related consolidated statements of comprehensive loss, changes in stockholders' equity, and cash flows
for each of the years in the three-year period ended December 31, 2020, and the related notes (collectively referred to as the financial
statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company
as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the three-year period
ended December 31, 2020, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards
Board.
Basis
for Opinion
These
financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits,
we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion
on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.
Critical
Audit Matters
The
critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated
or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial
statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters
does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit
matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
F-
4
Impairment
Assessment of Trade Receivables
As
described in Notes 4 and 26, the Company extends unsecured credit to its customers. The Company recognizes a loss allowance on outstanding
trade receivables based on lifetime ECLs at each reporting date. The assessment of loss allowance requires significant judgement. Addressing
the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated
financial statements. The audit engagement team performed extended procedures, which includes, among others, obtaining an understanding
of the management's assessment process, evaluating the relevant inputs and factors used during the process, and testing the reasonableness
of the loss allowance.
Impairment
Assessment of Non-Financial Assets
As
described in Notes 4 and 6, the Company is required to test certain non-financial assets for impairment based on recoverability. The
recoverable amount is determined based on the cash-generating-unit (CGU) to which the asset belongs. For each reporting period, management
reviews the recoverable amount using discounted cash flows and determine if impairment is required. The assessment of the impairment
requires significant judgement. Addressing the matter involved performing procedures and evaluating audit evidence in connection with
forming our overall opinion on the consolidated financial statements. The audit engagement team performed extended procedures, which
includes, among others, obtaining an understanding of the management's assessment process, evaluating the reasonableness of the
relevant inputs and factors used in calculating the projections, and testing the accuracy of the assessment output.
/s/
WWC, P.C.
WWC,
P.C.
Certified
Public Accountants
We
have served as the Company's auditor from 2016 to 2021.
San
Mateo, California
May
17, 2021
F-
5
JX Luxventure limited
Consolidated Statements of Comprehensive Loss
For the years ended December 31, 2022, 2021, 2020
(Stated in U.S. Dollars)
Year ended December 31,
Notes
2022
2021
2020
Revenue
8
79,874,727
54,040,948
1,335,374
Cost of sales
9
(78,410,244
)
(53,193,237
)
(1,168,808
)
Gross profit
1,464,483
847,711
166,566
Other income
10
16,636
34,793
3,122
Other losses
11
(98,650
)
(17,325
)
-
Distribution and selling expenses
12
(721,388
)
(1,353,843
)
-
Administrative expenses
13
(56,043,741
)
(6,858,210
)
(1,164,981
)
(Loss)/profit from operations
(55,382,660
)
(7,346,874
)
(995,293
)
Finance costs
14
-
-
-
(Loss)/profit before tax
(55,382,660
)
(7,346,874
)
(995,293
)
Income tax income/(expense)
15
(621
)
(5,495
)
-
Loss before discontinued operations
16
(55,383,281
)
(7,352,369
)
(995,293
)
Discontinued operation:
Discontinued operation loss
(8,915,414
)
(29,863,114
)
(4,672,124
)
Loss on disposal of discontinued operation
(9,193,736
)
-
-
Loss for the year
(73,492,431
)
(37,215,483
)
(5,667,417
)
Other comprehensive loss
- currency translation differences
(402,573
)
1,438,756
3,641,747
Total comprehensive loss for the year
(73,895,004
)
(35,776,727
)
(2,025,670
)
Loss per share of common stock attributable to the Company
- Basic
19
(43.7
)
(82.3
)
(20.9
)
- Diluted
19
(43.7
)
(82.3
)
(20.9
)
Weighted average shares outstanding:
- Basic
19
1,681,547
452,345
271,253
- Diluted
19
1,681,547
452,345
271,253
The accompanying notes are an integral part of
these consolidated financial statements.
F-
6
JX Luxventure limited
Consolidated Statements of Financial Position
As at December 31, 2022, and 2021
(Stated in U.S. Dollars)
As of December 31,
Notes
2022
2021
Non-current assets
Property, plant and equipment-net
20
2,789,704
3,798,612
Investment property-net
20
-
7,364,527
Prepayments and premiums under operating leases
21
-
2,324,695
Land use rights
24
-
380,091
Long-term receivable
22
7,000,000
-
9,789,704
13,867,925
Current assets
Inventories
25
444,551
1,163,896
Trade receivables
26
-
7,736,851
Other receivables and prepayments
26
5,501,106
2,328,122
Prepayments and premiums under operating leases
21
-
82,714
Cash and cash equivalents
27
520,916
12,914,914
6,466,573
24,226,497
Total assets
16,256,277
38,094,422
Current liabilities
Short term bank loans
30
-
1,180,656
Trade and other payables
28
1,319,076
5,355,123
Due to related parties
29
2,611,097
467,568
Contract liabilities
-
218,734
Income tax payable
212
-
3,930,385
7,222,081
Total liabilities
3,930,385
7,222,081
Equity
Share capital
32
6,063
590
Series A equity interest with preferential rights
1,240,000
1,240,000
Series C equity interest with preferential rights
1,500,000
1,500,000
Series D equity interest with preferential rights
3,120,000
3,120,000
Share premium
32
77,959,554
24,719,794
Other reserve
33
6,269,108
184,272
Statutory surplus reserve
33
-
6,084,836
Retained profits / (accumulated deficit)
33
(77,451,517
)
(3,959,086
)
Foreign currency translation reserve
33
(317,316
)
(2,018,065
)
12,325,892
30,872,341
Total liabilities and equity
16,256,277
38,094,422
The accompanying notes are an integral part of
these consolidated financial statements.
F-
7
JX Luxventure limited
Consolidated Statements of Changes in Equity
For the years ended December 31, 2022, 2021, 2020
(Stated in U.S. Dollars)
Share
capital
Preferred A
equity interest
Preferred
    C
equity interest
Preferred
    D
equity interest
Share
premium
Other
reserve
Statutory
surplus
reserve
Retained
earnings
Foreign
currency
translation
reserve
Total
equity
Note 32
Note 32
Note 32
Note 32
Note 32
Note 33
Note 33
Note 33
Note 33
Balance at December
    31, 2019
259
-
-
-
9,199,779
184,272
6,084,836
46,073,808
(7,098,568
)
54,444,386
Shares issued for stock based compensation
56
-
-
-
1,332,698
-
-
-
-
1,332,754
Shares issued for acquisition of
    subsidiary
26
-
-
-
780,166
-
-
-
-
780,192
Loss for the year
-
-
-
-
-
-
-
(5,667,417
)
-
(5,667,417
)
Other comprehensive loss for the
    year
-
-
-
-
-
-
-
-
3,641,747
3,641,747
Balance at December 31, 2020
341
-
-
-
11,312,643
184,272
6,084,836
40,406,391
(3,456,821
)
54,531,662
Shares issued for stock based compensation
130
-
-
-
4,407,724
-
-
-
-
4,407,854
Shares issued for shareholders'
    loan
67
-
-
-
809,485
-
-
-
-
809,552
Preferred shares issued
1,500,000
1,500,000
3,900,000
-
-
-
-
6,900,000
Preferred shares converted into common
    stock
52
(260,000
)
(780,000
)
1,039,948
-
-
-
-
-
Declared dividend of right
7,149,994
-
-
(7,149,994
)
-
Loss for the year
-
-
-
-
-
-
-
(37,215,483
)
-
(37,215,483
)
Other comprehensive loss for the
    year
-
-
-
-
-
-
-
-
1,438,756
1,438,756
Balance at December 31, 2021
$
590
$
1,240,000
$
1,500,000
$
3,120,000
$
24,719,794
184,272
6,084,836
(3,959,085
)
(2,018,065
)
30,872,341
Shares issued for stock based compensation
5,473
-
-
-
53,239,760
-
-
-
-
53,245,233
Disposal of subsidiaries
-
-
-
-
-
6,084,836
)
(6,084,836
)
-
2,103,322
2,103,322
Loss for the year
-
-
-
-
-
-
-
(73,492,431
)
(73,492,431
)
Other comprehensive loss for the
    year
-
-
-
-
-
-
-
-
(402,573
)
(402,573
)
Balance at December 31, 2022
$
6,063
$
1,240,000
$
1,500,000
$
3,120,000
$
77,959,554
6,269,108
-
(77,451,517
)
(317,316
)
12,325,892
The accompanying notes are an integral part of
these consolidated financial statements.
F-
8
JX Luxventure limited
Consolidated Statements of Cash Flows
For the years ended December 31, 2022, 2021, 2020
(Stated in U.S. Dollars)
Year ended December 31,
2022
2021
2020
OPERATING ACTIVITIES
Loss for the year
(73,492,431
)
(37,215,483
)
(5,667,417
)
Adjustments for:
Share-based compensation
53,245,233
4,407,853
700,250
Finance cost
-
58,726
62,383
Interest income
(22
)
(33,717
)
(54,544
)
Depreciation of property, plant and equipment & investment property
729,393
757,516
771,130
Amortization of intangible assets
7,477
14,958
13,980
Amortization of prepayments and premiums paid under operating leases
66,748
81,474
94,699
Provision/ (reversal) of inventory obsolescence
204,392
1,283
(42,884
)
Bad debt provision of trade receivables
4,991,808
6,076,620
2,334,410
Loss/(gain) on disposal of property, plant and equipment
402
97,378
45,807
Provision of impairment loss in property, plant and equipment & investment property
-
2,944,979
-
loss on disposal of subsidiary
9,193,736
(30,642
)
-
Operating cash flows before movements in working capital
(5,053,264
)
(22,839,055
)
(1,742,186
)
(Increase)/ decrease in trade and other receivables
(545,788
)
(3,284,084
)
(2,492,940
)
(Increase)/ decrease in inventories
438,849
547,593
(267,472
)
Prepayments and premiums paid under operating leases
(3,267
)
(3,411
)
210,901
Increase/ (decrease) in trade and other payables
262,510
515,003
(579,948
)
Increase/ (decrease) in income tax payable
(56,451
)
(175,469
)
(92,321
)
(Increase)/ decrease in deferred tax assets
-
17,463,604
(1,556,824
)
NET CASH USED IN OPERATING ACTIVITIES
(4,957,411
)
(7,775,819
)
(6,520,790
)
INVESTING ACTIVITIES
Interest received
21
33,717
54,544
Cash from acquisition of subsidiaries
-
-
561,424
Cash increase/ (decrease) due to disposal of a subsidiary
(9,442,759
)
6,612
-
Proceeds on disposal of property, plant and equipment
-
5,400
15,704
Purchase of property, plant and equipment
(1,008
)
(3,324,900
)
(24,198
)
NET CASH FROM INVESTING ACTIVITIES
(9,443,746
)
(3,279,171
)
607,474
FINANCING ACTIVITIES
Interest paid
-
(58,726
)
(62,383
)
New bank loans raised
-
-
2,173,882
Repayment of borrowings
-
-
(2,173,882
)
Advance from related party
2,220,098
117,697
909,237
Preferred stock subscription
-
6,900,000
-
NET CASH FROM FINANCING ACTIVITIES
2,220,098
6,958,971
846,854
NET DECREASE IN CASH AND CASH EQUIVALENTS
(12,181,059
)
(4,096,019
)
(5,066,462
)
Effects of currency translation
(212,939
)
389,643
1,067,274
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
12,914,914
16,621,290
20,620,478
CASH AND CASH EQUIVALENTS AT END OF YEAR
520,916
12,914,914
16,621,290
Cash flows of discontinued operation are presented
in Note 17.
The accompanying notes are an integral part of
these consolidated financial statements.
F-
9
JX Luxventure limited
Notes to Financial Statements
1.
GENERAL INFORMATION
On January 26, 2012, Acquisition Investments
Corp ("Company") was organized as a blank check company pursuant to the laws of the Republic of the Marshall Islands for the
purpose of acquiring through a merger, capital stock exchange, asset acquisition, stock purchase, or similar acquisition transaction,
one or more operating businesses or assets.
On March 24, 2014, the Company entered
into a Share Exchange Agreement and Plan of Liquidation (the "Agreement") among KBS International Holdings, Inc. ("KBS"),
a Nevada corporation, Hongri International Holdings Ltd ("Hongri"), a company organized under the laws of the British Virgin
Islands, and Cheung So Wa and Chan Sun Keung, the principal shareholders of KBS.
On August 1, 2014, the share exchange
was completed. The acquisition was accounted for as a reverse merger and recapitalization where the Company, the legal acquirer is the
accounting acquiree, and KBS, the legal acquiree, was the accounting acquirer.
Description of Subsidiaries:
Hongri International Holdings Limited
(the "Hongri"), formerly known as Wah Ying International Investment Inc., was incorporated in the British Virgin Islands (the
"BVI") on July 8, 2008 as a limited liability company with authorized share capital of $50,000, divided into 50,000 common
shares with $1 par value. Up through December 31, 2010, 10,000 common shares had been issued at par. On January 27, 2011, the Company
issued an additional 10,000 common shares for cash consideration at $77 per share. The principal activity of the Company is investment
holding. Hongri a directly wholly owned subsidiary of the Company.
France Cock (China) Limited ("France
Cock") was incorporated in Hong Kong on September 21, 2005 as a limited liability company with authorized capital of HK$10,000,
divided into 10,000 common shares with par value of HK$1. The capital has been fully paid up. The principal activity of France Cock is
the holding of intellectual property rights such as trademarks. France Cock owns the Company's trademarks, including "KBS"
and "Kabiniao". France Cock is a directly wholly owned subsidiary of Hongri.
Roller Rome Limited ("Roller Rome")
was incorporated in the BVI on March 28, 2006 as a limited liability company with authorized share capital of $50,000, divided into 50,000
common shares with par value of $1. The principal activity of Roller Rome is the provision of design and development services for sports
apparel. Roller Rome is a directly wholly owned subsidiary of Hongri.
Vast Billion Investment Limited ("Vast
Billion") was incorporated in Hong Kong on November 25, 2010 as a limited liability company with authorized share capital of HK$10,000
divided into 10,000 ordinary shares with HK$1par value. One ordinary share has been issued at par. Vast Billion is an investment holding
company, and is a directly wholly owned subsidiary of Hongri.
Hongri (Fujian) Sports Goods Co. Ltd.
("Hongri Fujian") was established in the People's Republic of China (the "PRC") on November 17, 2005 with
a registered and paid up capital of RMB 5,000,000. On March 24, 2011, Hongri Fujian increased registered capital from RMB 70,000,000 to
RMB75,000,000. As of September 30, 2011, the paid up capital was RMB 39,551,860. Hongri Fujian is engaged in the design, manufacture,
marketing, and sale of apparel in the PRC. Hongri Fujian is a directly wholly owned subsidiary of Vast Billion.
Anhui Kai Xin Apparel Company Limited
("Anhui Kai Xin") was established in the PRC on March 16, 2011 with a registered and paid up capital of RMB 1,000,000. Anhui
Kai Xin is a wholly owned subsidiary of Hongri Fujian. Anhui Kai Xin provides contracting manufacturing services for companies in the
sports apparel business.
On October 19, 2022, the Company sold
Hongri International Holding Limited to third party and from thereon, Hongri, France Cock, Roller Rome, Vast Billion, Hongri Fujian, Anhui
Kai Xin are no longer the subsidiaries of the Company.
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Flower Crown Holding is a company incorporated
on August 7, 2020 in the Cayman Islands. It has 50,000 shares issued and outstanding with a par value of $1. It is wholly owned by KBSF
Fashion Group Limited.
Flower Crown (China) Holding Group Co.,
Limited ("Flower Crown HK") was incorporated in Hong Kong on May 24, 2018. It has a total of 10,000 shares issued and outstanding
with a par value of $1. It is wholly owned by Flower Crown Holding.
Kim Hyun Technology (Tianjin) Co., Ltd.
("Kim Hyun Tianjin") was incorporated on July 23, 2020 in the PRC, as a wholly foreign-owned enterprise. Kim Hyun Tianjin
is 100% owned by Flower Crown HK. The total investment is RMB10,000,000, the registered capital is RMB10,000,000 and the present shareholder
shall pay up the registered capital prior to July 21, 2050. Kim Hyun Tianjin provides consulting in connection with information technology.
Jin Xuan (Hainan) Holding Co., Ltd ("JX
Hainan") was incorporated in November 11, 2021. It has a registered capital of USD30,000,000. It is 100% owned by Flower Crow HK.
Its business scope ranges from import & export to manufacturing.
Jin Xuan Luxury Tourism (Hainan) Digital
Technology Co., Ltd. ("Jin Xuan Luxury Tourism") was incorporated in the PRC on August 4, 2016. It is 100% owned by JX Hainan
.. It has a registered capital of RMB20,000,000 and present shareholder shall pay up the registered capital prior to August 4, 2046. It
operates Luxventure social platform and on-line activities.
Beijing Heyang International Travel Service
Co., Ltd. ("Heyang Travel") was incorporated in the PRC on March 29, 2018. It is 100% owned by Jin Xuan Luxury Tourism. It
has a registered capital of RMB5,000,000 and the shareholder shall pay up the registered capital prior to August 1, 2060. Heyang Travel
engages in tourism business and selling carrier services.
2.
GROUP ORGANIZATION AND BASIS OF PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS
Effective December 13, 2021, the Company
reorganized its corporate subsidiary structure in the PRC under Flower Crown Holding. As a result of the Flower Crown Holding's
China subsidiaries restructuring, the Company no longer operated those entities through a VIE structure and became the indirect sole shareholder
of JX Hainan Digital and Beijing Heyang.
The Group structure as at the reporting
date is as follows:
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11
3.
APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRS")
For the year ended December 31, 2022
the Company has consistently adopted all the new and revised standards, amendments and interpretations (collectively IFRSs) issued by
the International Accounting Standards Board ("IASB") and the IFRS Interpretations Committee (formerly known as "International
Financial Reporting Interpretations Committee" ("IFRIC")) of the IASB that are effective for financial year beginning
on January 1, 2022 in the preparation of the consolidated financial statements throughout the year.
For the year ended December 31, 2022,
the following new and revised standards, amendments or interpretations that have become effective during the reporting period.
●
IFRS Accounting Taxonomy 2021—Update 1 Disclosure of Accounting Policies and Definition of Accounting Estimates
●
IFRS Accounting Taxonomy 2021—Update 2 Technology Update
●
IFRS Accounting Taxonomy 2021—Update 3 Initial Application of IFRS 17 and IFRS 9—Comparative Information
The adoption of the above new and revised
standards had no significant financial effect on these financial statements.
The following new standards and amendments
to standards have not come into effect for the financial year beginning January 1, 2022, and have not been early adopted by the Company
in preparing these consolidated financial statements. None of these new standards and amendments to standards is expected to have a significant
effect on the consolidated financial statements of the Company.
●
Lease Liability in a Sale and Leaseback Amendments to IFRS 16
●
Non-current Liabilities with Covenants
4.
SIGNIFCANT ACCOUNTING POLICIES
The principal accounting policies adopted
in the preparation of the financial statements are set out below. The policies have been consistently applied to all the years presented,
unless otherwise stated.
Basis of preparation
The consolidated financial statements
have been prepared on the historical cost basis and in accordance with IFRS as issued by the IASB. The principal accounting policies are
set out below.
The consolidated financial statements
incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). Control is achieved where
the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
Where necessary, adjustments are made
to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group.
All intra-group transactions, balances,
income and expenses are eliminated on consolidation.
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Foreign currencies
Functional and presentation currency
Items included in the financial statements
are measured using the currency of the primary economic environment in which the entity operates (the "functional currency").
The Group conducts its business predominately
in the PRC and hence its functional currency is the Renminbi (RMB).
Translation from RMB to USD found place
at the following rates:
Period end rates
Average rates
December 31, 2020
USD 1.00= RMB 6.5277
USD 1.00=RMB 6.9001
December 31, 2021
USD 1.00= RMB 6.3524
USD 1.00=RMB 6.4491
December 31, 2022
USD 1.00= RMB 6.8987
USD 1.00=RMB 6.7347
Translation from HKD to USD found place
at the following rates:
Period end rates
Average rates
December 31, 2020
USD 1.00= HKD 7.7525
USD 1.00=HKD 7.7558
December 31, 2021
USD 1.00= HKD 7.7991
USD 1.00=HKD 7.7731
December 31, 2022
USD 1.00= HKD 7.7970
USD 1.00=HKD 7.8305
The results and financial positions in
functional currency are translated into the presentation currency, USD, of the Company as follows:
(1)
Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;
(2)
Income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions);
(3)
Share equity, share premium and dividends are translated at historical exchange rates; and
(4)
All resulting exchange differences are recognized in foreign currency translation reserve, a separate component of equity.
All financial information presented in
USD has been rounded to the nearest dollar, except when otherwise indicated.
Segment reporting
Operating segments, and the amounts of
each segment item reported in the financial statements, are identified from the financial information provided regularly to the Group's
most senior executive management for the purposes of allocating resources to, and assessing the performance of, the Group's various
lines of business and geographical locations.
Individually material operating segments
are not aggregated for financial reporting purposes unless the segments have similar economic characteristics and are similar in respect
of the nature of products and services, the nature of production processes, the type or class of customers, the methods used to distribute
the products or provide the services, and the nature of the regulatory environment. Operating segments which are not individually material
may be aggregated if they share a majority of these criteria. The Group's five segments are wholesale, retail, contract manufacturing,
tourism service and cross-border e-commerce.
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13
Revenue recognition
Revenue from contracts with
customers
Revenue from contracts with customers
is recognized when control of goods or services is transferred to the customers at an amount that reflects the consideration to which
the Company expects to be entitled in exchange for those goods or services.
When the consideration in a contract
includes a variable amount, the amount of consideration is estimated to which the Company will be entitled in exchange for transferring
the goods or services to the customer. The variable consideration is estimated at contract inception and constrained until it is highly
probable that a significant revenue reversal in the amount of cumulative revenue recognized will not occur when the associated uncertainty
with the variable consideration is subsequently resolved. Currently, the Company's contracts do not include such variable amount.
When the contract contains a financing
component which provides the customer a significant benefit of financing the transfer of goods or services to the customer for more than
one year, revenue is measured at the present value of the amount receivable, discounted using the discount rate that would be reflected
in a separate financing transaction between the Company and the customer at contract inception. When the contract contains a financing
component which provides the Company a significant financial benefit for more than one year, revenue recognized under the contract includes
the interest expense accreted on the contract liability under the effective interest method. For a contract where the period between the
payment by the customer and the transfer of the promised goods or services is one year or less, the transaction price is not adjusted
for the effects of a significant financing component, using the practical expedient in IFRS 15. Currently, the Company's contract
with its customers do not include financial benefit for more than one year.
Nature and timing
of satisfaction of performance obligations for each of the revenue streams are as follows:
Revenue from the sale of goods
Performance obligation is satisfied at
the point in time when control of the asset is transferred to the customer, generally on delivery and acceptance of the goods. The Company
presents revenues from such transactions on a gross basis in the consolidated statements of comprehensive loss, as the Company acts as
a principal to take inventory risks of these goods.
Revenue from the sale of packaged
group tour service
Performance obligation is satisfied when
the tour service is completed, generally when the tour group successfully returned from the tour destination to the place of origination.
The Company presents revenues from such transactions on a gross basis in the consolidated statements of comprehensive loss, as the Company
acts as a principal to provide a package of tourism services and take a full obligation to provide such services even if the suppliers
are not able to deliver service.
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Revenue from reselling of air-ticket
The Company is a reseller of air-ticket,
it provides value add services to its customers including guaranteed flight replacement and other financial benefits. The revenue is recognized
when performance obligation has been satisfied, which could be significantly after the ticket sale. The Company recognizes gross revenue
with an expense from the cost of purchasing from the supplier.
Other income
Interest income is recognized on an accrual
basis using the effective interest method by applying the rate that exactly discounts the estimated future cash receipts over the expected
life of the financial instrument or a shorter period, when appropriate, to the net carrying amount of the financial asset.
Rental income is recognized
on a time proportion basis over the lease terms.
Dividend income is recognized when the
shareholders' right to receive payment has been established, it is probable that the economic benefits associated with the dividend
will flow to the Company and the amount of the dividend can be measured reliably.
Value added tax (VAT)
Current standard Output VAT in effect
is 13% and 6% of product sales and taxable services revenue, respectively, according to existing tax laws. The remaining balance of output
VAT, after subtracting the deductible input VAT of the period, is VAT payable.
Type of revenue
Standard VAT rate in effect for revenues
Product sales
13
%
Services rendered
6
%
Borrowing costs
Borrowing costs directly attributable
to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time
to get ready for their intended use or sale, are added to the cost of those assets until such time as the assets are substantially ready
for their intended use or sale.
All other borrowing costs are recognized
in profit or loss in the period in which they are incurred.
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15
Retirement benefit costs
Pursuant to the relevant regulations
of the PRC government, the Group's subsidiaries located in the PRC participate in a local municipal government retirement benefits
scheme (the "Scheme"), whereby they contribute a prescribed percentage of the basic salaries of their employees to the Scheme
to fund their retirement benefits. Once the Scheme has been funded via contributions by the Group's participating subsidiaries,
the local municipal government takes responsibility for the retirement benefits obligations of all existing and future retired employees
of those subsidiaries located in the PRC; accordingly, the only obligation of the Group with respect to the Scheme is to pay the on-going
required contributions as long as the employees maintain employment with the Group. There are no provisions under the Scheme whereby forfeited
contributions may be used to reduce future contributions. These plans are considered defined contribution plans. The Group has no legal
or constructive obligations to pay further contributions after its payment of the fixed contributions into the pension schemes. Contributions
to pension schemes are recognized as an expense in the period in which the related service is performed.
Taxation
The tax expense for the period comprises current and deferred tax.
Tax is recognized in the income statement, except to the extent that it relates to items recognized in other comprehensive income or directly
in equity. In this case the tax is also recognized in other comprehensive income or directly in equity, respectively.
The current income tax charge is calculated
on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Group operates and
generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable
tax regulation is subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to
the tax authorities.
Deferred tax is recognized on temporary
differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax
bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences.
Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits
will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not
recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of
other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognized
for taxable temporary differences associated with investments in subsidiaries, except where the Group is able to control the reversal
of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax
assets arising from deductible temporary differences associated with such investments are only recognized to the extent that it is probable
that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected
to reverse in the foreseeable future.
The carrying amount of deferred tax assets
is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits
will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are
measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax
rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax
liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting
period, to recover or settle the carrying amount of its assets and liabilities.
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16
Deferred income tax assets and liabilities
are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred
income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different
taxable entities where there is an intention to settle the balances on a net basis.
Current and deferred tax are recognized
in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which
case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively. Where current
tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the
business combination.
Store pre-opening cost
Store pre-opening cost was the start-up
activity costs incurred prior to opening a new store, mainly including leasing, leasehold improvements, payroll and supplies. The accounting
policies for leasing and leasehold improvements were as below. Other store pre-opening costs were directly charged to expenses when occurred.
Leasing
IFRS 16 Leases requires lessees to recognize
assets and liabilities for most leases based on a 'right-of-use model' which reflects that, at the commencement date, a lessee
has a financial obligation to make lease payments to the lessor for its right to use the underlying asset during the lease term. The lessor
conveys that right to use the underlying asset at lease commencement, which is the time when it makes the underlying asset available for
use by the lessee.
IFRS 16 defines a lease term as the noncancellable
period for which the lessee has the right to use an underlying asset including optional periods when an entity is reasonably certain to
exercise an option to extend (or not to terminate) a lease.
Under IFRS 16 lessees may also elect not to recognize assets and liabilities
for leases with a lease term of 12 months or less. In such cases a lessee recognizes the lease payments in profit or loss on a straight-line
basis over the lease term. The exemption is required to be applied by class of underlying assets. Lessees can also make an election for
leases for which the underlying asset is of low value. This election can be made on a lease-by-lease basis. For leases where the Group
is the lessee, the lease term is either cancelable or no longer than 12 months, so the Group has elected not to record the leased assets.
Lessor accounting under IFRS 16 is substantially
unchanged from IAS 17. Lessors continue to classify leases as either operating or finance leases using similar principles as in IAS 17.
IFRS 16 did not have any significant impact on leases where the Group is the lessor.
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Leasehold improvements
Leasehold improvements, principally comprising
costs of office buildings and shops renovation, are held for administrative and selling purposes. Leasehold improvements are initially
measured at cost and amortized systematically over its useful life.
Property, plant and equipment
Property, plant and equipment ("PPE")
including buildings held for use in the production or supply of goods or services, or for administrative purposes other than construction
in progress are stated at cost less subsequent accumulated depreciation and accumulated impairment losses.
Depreciation is provided to write off
the cost of items of property, plant and equipment other than construction in progress over their estimated useful lives and after taking
into account of their estimated residual value, using the straight-line method.
Construction in progress includes property,
plant and equipment in the course of construction for production or for its own use purposes. Construction in progress is carried at cost
less any recognized impairment loss. Construction in progress is classified to the appropriate category of property, plant and equipment
when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the
assets are ready for their intended use.
An item of property, plant and equipment
is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain
or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount
of the item) is included in profit or loss in the period in which the item is de-recognized.
Investment properties
Investment properties are land and buildings
which are owned or held under a leasehold interest to earn rental income and/or for capital appreciation. These include land and buildings
held for a currently undetermined future use. Such properties are stated at cost less accumulated depreciation and any impairment losses.
Any gains or losses on the retirement or disposal of an investment
property are recognized in the income statement in the year of the retirement or disposal.
Depreciation is calculated on the straight-line
basis to depreciate the cost of each item of investment properties over the estimated useful life of 20 years.
The Group as lessor
Rental income from operating leases is
recognized in profit or loss on a straight-line basis over the term of the relevant lease.
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Land use rights
Land use rights are stated at cost less
accumulated amortization and accumulated impairment losses. Cost represents consideration paid for the rights to use the land on which
various plants and buildings are situated for periods varying from 20 to 50 years.
Amortization of land use rights is calculated
on a straight-line basis over the period of the land use rights.
Inventories
Inventories, comprising of raw materials
and merchandise inventories, are stated at the lower of cost and net realizable value. Costs of inventories are determined using the weighted
average method. Net realizable value represents the estimated selling price for inventories less all estimated costs of completion and
costs necessary to make the sale.
Cash and cash equivalents
Cash and cash equivalents includes cash
on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three
months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
Share-based compensation expenses
All share-based awards granted to employees, which are common shares,
are measured at fair value on shares issuance date, and are recognized as an employee benefits expense, with a corresponding increase
in equity. Share-based compensation expenses are recognized over the period during which the employees provide the relevant services.
Financial instruments – investments
and other financial assets
Initial recognition and
measurement
Financial assets are classified, at initial
recognition, as subsequently measured at amortized cost, fair value through other comprehensive income, and fair value through profit
or loss.
The classification of financial assets
at initial recognition depends on the financial asset's contractual cash flow characteristics and the Group's business model
for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Group
has applied the practical expedient of not adjusting the effect of a significant financing component, the Group initially measures a financial
asset at its fair value, plus in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables
that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction
price determined under IFRS 15 in accordance with the policies set out for "Revenue recognition".
In order for a financial asset to be
classified and measured at amortized cost or fair value through other comprehensive income, it needs to give rise to cash flows that are
solely payments of principal and interest ("SPPI") on the principal amount outstanding.
The Group's business model for
managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines
whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.
All regular way purchases and sales of
financial assets are recognized on the trade date, that is, the date that the Group commits to purchase or sell the asset. Regular way
purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established
by regulation or convention in the marketplace.
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19
Subsequent measurement
The subsequent measurement
of financial assets depends on their classification as follows:
Financial assets at amortized
cost (debt instruments)
The Group measures
financial assets at amortized cost if both of the following conditions are met:
●
The financial asset is held
within a business model with the objective to hold financial assets in order to collect contractual cash flows.
●
The contractual terms of the
financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount
outstanding.
Financial assets at amortized cost are
subsequently measured using the effective interest method and are subject to impairment. Gains and losses are recognized in the income
statement when the asset is derecognized, modified or impaired.
Financial assets at fair
value through other comprehensive income (debt instruments)
The Group measures debt instruments
at fair value through other comprehensive income if both of the following conditions are met:
●
The financial asset is held
within a business model with the objective of both holding to collect contractual cash flows and selling.
●
The contractual terms of the
financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount
outstanding.
For debt instruments at fair value through
other comprehensive income, interest income, foreign exchange revaluation and impairment losses or reversals are recognized in the income
statement and computed in the same manner as for financial assets measured at amortized cost. The remaining fair value changes are recognized
in other comprehensive income. Upon derecognition, the cumulative fair value change recognized in other comprehensive income is recycled
to the income statement.
Financial assets at fair
value through other comprehensive income (equity investments)
Upon initial recognition, the Group
can elect to classify irrevocably its equity investments as equity investments designated at fair value through other comprehensive income
when they meet the definition of equity under HKAS 32 Financial Instruments: Presentation and are not held for trading. The classification
is determined on an instrument-by-instrument basis.
Gains and losses on these financial
assets are never recycled to the income statement. Dividends are recognized as other income in the income statement when the right of
payment has been established, it is probable that the economic benefits associated with the dividend will flow to the Group and the amount
of the dividend can be measured reliably, except when the Group benefits from such proceeds as a recovery of part of the cost of the financial
asset, in which case, such gains are recorded in other comprehensive income. Equity investments designated at fair value through other
comprehensive income are not subject to impairment assessment.
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20
Financial assets at fair
value through profit or loss
Financial assets at fair value through
profit or loss include financial assets held for trading, financial assets designated upon initial recognition at fair value through profit
or loss, or financial assets mandatorily required to be measured at fair value. Financial assets are classified as held for trading if
they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives,
are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets with cash flows
that are not solely payments of principal and interest are classified and measured at fair value through profit or loss, irrespective
of the business model. Notwithstanding the criteria for debt instruments to be classified at amortized cost or at fair value through other
comprehensive income, as described above, debt instruments may be designated at fair value through profit or loss on initial recognition
if doing so eliminates, or significantly reduces, an accounting mismatch.
Financial assets at fair value through
profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognized in the income
statement. This category includes derivative financial instruments and structured bank deposits.
A derivative embedded in a hybrid contract,
with a financial liability or non-financial host, is separated from the host and accounted for as a separate derivative if the economic
characteristics and risks are not closely related to the host; a separate instrument with the same terms as the embedded derivative would
meet the definition of a derivative; and the hybrid contract is not measured at fair value through profit or loss. Embedded derivatives
are measured at fair value with changes in fair value recognized in the income statement. Reassessment only occurs if there is either
a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification
of a financial asset out of the fair value through profit or loss category.
A derivative embedded within a hybrid
contract containing a financial asset host is not accounted for separately. The financial asset host together with the embedded derivative
is required to be classified in its entirety as a financial asset at fair value through profit or loss.
Financial instruments –
impairment of financial assets
The Group recognizes an allowance for
ECLs for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual
cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation
of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.
General approach
ECLs are recognized in two stages. For
credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit
losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which
there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected
over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
At each reporting date, the Group assesses
whether the credit risk on a financial instrument has increased significantly since initial recognition. When making the assessment, the
Group compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring
on the financial instrument as at the date of initial recognition and considers reasonable and supportable information that is available
without undue cost or effort, including historical and forward-looking information.
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21
The Group considers a financial asset
in default when contractual payments are 120 days past due. However, in certain cases, the Group may also consider a financial asset to
be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts
in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable
expectation of recovering the contractual cash flows.
Debt instruments at fair value through
other comprehensive income and financial assets at amortized cost are subject to impairment under the general approach and they are classified
within the following stages for measurement of ECLs except for trade receivables which apply the simplified approach as detailed below.
Stage 1 – Financial instruments
for which credit risk has not increased significantly since initial recognition and for which the loss allowance is measured at an amount
equal to 12-month ECLs
Stage 2 – Financial instruments
for which credit risk has increased significantly since initial recognition but that are not credit-impaired financial assets and for
which the loss allowance is measured at an amount equal to lifetime ECLs
Stage 3 – Financial assets that
are credit-impaired at the reporting date (but that are not purchased or originated credit-impaired) and for which the loss allowance
is measured at an amount equal to lifetime ECLs
Simplified approach
For trade receivables that do not contain
a significant financing component or when the Group applies the practical expedient of not adjusting the effect of a significant financing
component, the Group applies the simplified approach in calculating ECLs. Under the simplified approach, the Group does not track changes
in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision
matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic
environment.
For trade receivables that contain a
significant financing component and lease receivables, the Group chooses as its accounting policy to adopt the simplified approach in
calculating ECLs with policies as described above.
Financial instruments –
derecognition of financial assets
A financial asset (or, where applicable,
a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Group's
consolidated statement of financial position) when:
●
the rights to receive cash
flows from the asset have expired; or
●
the Group has transferred its
rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay
to a third party under a "pass-through" arrangement; and either (a) the Group has transferred substantially all the risks
and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset,
but has transferred control of the asset.
When the Group has transferred its rights
to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained
the risk and rewards of ownership of the asset. When it has neither transferred nor retained substantially all the risks and rewards of
the asset nor transferred control of the asset, the Group continues to recognize the transferred asset to the extent of the Group's
continuing involvement. In that case, the Group also recognizes an associated liability. The transferred asset and the associated liability
are measured on a basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the
form of a guarantee over the transferred asset is measured at the lower of the original amount of the asset and the maximum amount of
consideration that the Group could be required to repay.
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Financial instruments –
financial liabilities
Initial recognition and
measurement
All financial liabilities are recognized
initially at fair value and, in the case of loans and borrowings, net of directly attributable transaction costs. The Group's financial
liabilities include trade payables, other payables, financial liabilities included in accruals and interest-bearing bank borrowings.
Subsequent measurement
After initial recognition, interest-bearing
loans and borrowings are subsequently measured at amortized cost, using the effective interest rate method unless the effect of discounting
would be immaterial, in which case they are stated at cost. Gains and losses are recognized in the income statement when the liabilities
are derecognized as well as through the effective interest rate amortization process.
Amortized cost is calculated by taking
into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective
interest rate amortization is included in finance costs in the income statement.
Financial instruments –
derecognition of financial liabilities
A financial liability is derecognized
when the obligation under the liability is discharged or cancelled, or expires.
When an existing financial liability
is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as a derecognition of the original liability and a recognition of a new liability,
and the difference between the respective carrying amounts is recognized in the income statement.
Financial instruments –
offsetting financial instruments
Financial assets and financial liabilities
are offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset
the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.
Capital and Reserves
Share capital represents the nominal
value of shares that have been issued by the Group. Share capital is determined using the nominal value of shares that have been issued.
Retained profits include all current
and prior period results as determined in the combined statement of comprehensive income.
Foreign currency translation reserve
arising on the translation are included in the currency translation reserve.
In accordance with the relevant laws
and regulations of PRC, the subsidiaries of the Group established in PRC are required to transfer 10% of its annual statutory net profit
(after offsetting any prior years' losses) to the statutory reserve. When the balance of such reserve reaches 50% of the subsidiary's
share capital, any further transfer of its annual statutory net profit is optional. Such reserve may be used to offset accumulated losses
or to increase the registered capital of the subsidiary subject to the approval of the relevant authorities. However, except for offsetting
prior years' losses, such statutory reserve must be maintained at a minimum of 25% of the share capital after such usage. The statutory
reserves are not available for dividend distribution to the shareholders.
All transactions with owners of the
Group are recorded separately within equity.
Earnings/(loss) per share
Basic earnings per share ("EPS")
are computed by dividing income attributable to holders of common shares by the weighted average number of common shares outstanding during
the year. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised
or converted into common shares. Potential dilutive securities are excluded from the calculation of diluted EPS in loss periods as their
effect would be anti-dilutive.
The preparation of financial statements
in conformity with IFRS requires management to exercise judgment in the process of applying the Group's accounting policies and
requires the use of accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of financial statements and reported amount of revenue and expenses during the reporting
period. The following estimates that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities
within the next financial year are disclosed below.
F-
23
5.
SIGNIFICANT MANAGEMENT JUDGEMENT
IN APPLYING ACCOUNTING POLICIES
Allowance for Bad and Doubtful debts
Allowances for bad and doubtful debts
are based on an assessment of the recoverability of trade and other receivables. Allowances are applied to trade and other receivables
where events or changes in circumstances indicate that the balances may not be collectible. The identification of bad and doubtful debts
requires the use of judgment and estimates, where the expected outcome is different from the original estimate, such difference will impact
carrying value of trade and other receivables and doubtful debt expenses in the period in which such estimate has been charged.
Impairment Losses
Impairment losses are based on an assessment
of the investment or long-lived assets' ability to generate future cash flows when there is evidence that these assets may be impaired.
The calculation of the amount of impairment loss are based on estimates made by management when applying broad accounting principles governing
the accounting for these assets. The determination of these estimates requires judgment by management. The final outcome may differ from
the original estimates made by management, which may impact the carrying value of the assets which management has determined to be impaired
and charged to the Company's profit loss during the period.
Provisions
Provisions for legal claims, service warranties and make good obligations
are recognized when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow
of resources will be required to settle the obligation, and the amount can be reliably estimated. Provisions are not recognized for future
operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined
by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any
one item included in the same class of obligations may be small.
Provisions are measured at the present
value of management
'
s best estimate of the expenditure required
to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax
rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the
provision due to the passage of time is recognized as interest expense.
Income Tax
The Group has exposure to income taxes
in numerous jurisdictions. Significant judgment is involved in determining the Group's provision for income taxes. There are certain
transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group
recognizes liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome
of these matters is different from the amounts that were initially recognized, such differences will impact the income tax and differed
tax provisions in the period in which such determination is made. The carrying amount of the Group's income tax payable as at December
31, 2022 and 2021 amounted to $212 and zero respectively.
F-
24
6.
KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Group's
accounting policies, which are described in Note 4, management is required to make estimates and assumptions about the carrying amounts
of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the
revision affects only that period or in the period of the revision and future periods if the revision affects both current and future
periods.
The following are the key assumptions
concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk
of causing a material adjustment to the carrying amounts of assets within the next financial year.
Depreciation of building, machinery
and equipment
As described in Note 4, the Group reviews
the estimated useful lives and residual values of property, plant and equipment at the end of each reporting period. The cost of building,
machinery and equipment is depreciated on a straight-line basis over the assets' estimated useful lives. Management estimates the
useful lives of these buildings, machinery and equipment to be within 5 to 20 years. These are the common life expectancies applied in
the same industry. Changes in the expected level of usage and technological developments could impact the economic useful lives and the
residual values of these assets, therefore future depreciation charges could be revised.
Impairment of non-financial assets
Property, plant and equipment are tested
for impairment whenever there is any objective evidence or indication that these assets may be impaired.
For the purpose of impairment testing,
the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset
basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, the
recoverable amount is determined for the cash-generating-unit ("CGU") to which the asset belongs.
If the recoverable amount of the asset
(or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount.
The difference between the carrying
amount and recoverable amount is recognized as an impairment loss in the income statement, unless the asset is carried at revalued amount,
in which case, such impairment loss is treated as a revaluation decrease.
An impairment loss for an asset other
than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the asset's recoverable amount
since the last impairment loss was recognized. The carrying amount of this asset is increased to its revised recoverable amount, provided
that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation)
had no impairment loss been recognized for the asset in prior years.
A reversal of impairment loss for an
asset other than goodwill is recognized in the income statement, unless the asset is carried at revalued amount, in which case, such reversal
is treated as a revaluation increase.
During the years ended December 31,
2022, 2021, and 2020, the Company recognized impairment losses of $nil, $nil, and $nil, respectively, for its prepayments for acquisition
of land use rights. During the years ended December 31, 2022, 2021, and 2020, the Company recognized impairment losses of $nil, $nil,
and $nil, respectively, for its related prepayments for construction on such land. The impairment reflects the current reduction in the
value of the investment as a result of the delay in time to complete the construction projects and delay in procurement of legal certificates
that would lead to the assets being put into service that would give rise to expected future profitability which at December 31, 2020,
has been temporarily postponed beyond the next operating period. The impairment losses charged to the prepayments has brought the carrying
values to their respective recoverable amount in its fair value less costs to sell.
F-
25
During the years ended December 31,
2022, 2021, and 2020, the Company recognized impairment losses of $nil, $ nil, and $nil, respectively, for a part of its factory plant
in Anhui that is not currently in use. The impairment reflects the current reduction in the value of the carrying cost as a result of
the company's evaluation of the recoverability of its investment. The impairment losses charged to the factory plant has brought
the carrying values to their respective recoverable amount in its fair value less costs to sell.
For the prepayment for acquisition of
land use rights, the Company provided an estimate of its fair value based on the market value substitution rule. The estimated fair value
belongs to Level 2 of the fair value hierarchy because the input is determined through quoted prices of similar assets without an actively
quoted market. Using the market approach, the Company compares the price of the land use right that the Company intended to acquire with
the price of similar land use rights in the same geographical area, adjusted by factors such as price index, frequency of actual transactions
conducted, environmental conditions, etc. Significant assumptions used in this estimation include the ability to legally obtain such land
use rights, the usage of land as industrial use, the date of transaction at year end, etc. As a result, the Company provided an estimate
in the amount of $5,154,034. Finally, the fair value is reduced by estimated costs to sell which include, but not limited to, legal costs,
stamp duty, similar transaction tax, etc. in the amount of $379,971. The net value is then compared to the carrying value, and the difference
is recorded as impairment loss in the amount of $1,317,295 in 2015. In 2016, since there was no progress in regards to the acquisition
of land use rights, the Company provided further impairment to bring the carrying value down to $0 as management is unable to assert the
recoverability of such asset.
For the prepayment for construction,
the Company provided an estimate of its fair value based on the time value approach. The estimated fair value belongs to Level 3 of the
fair value hierarchy because the input is not easily observable. Using this approach, the Company calculates the time value of money of
the amount prepaid based on the Company's weighted average cost of capital ("WACC") in order to arrive at its fair value.
The Company uses this approach to determine its recoverable amount because such prepayments are not readily resalable, and the ability
to realize this amount is contingent upon the Company's ability to successfully acquire the land use right as mentioned above. Significant
assumptions used in this estimation include using the WACC, which is comprised of the Company's metrics of return of equity, return
of debt, the relevant weights of the returns of equity and debt, and tax rate, in determining the fair value. As a result, as at December
31, 2015, the Company provided an estimate in the amount of $7,160,523. Since this asset is not resalable, the company estimated costs
to sell for this asset in the amount of $0. The net value is then compared to the carrying value, and the difference is recorded as impairment
loss in the amount of $1,248,039 in 2015. In 2017, since there was no progress in regards to the construction, the Company provided further
impairment to bring the carrying value down to $0 as management is unable to assert the recoverability of such asset.
For the factory plant, the Company provided
an estimate of its fair value based on the time value approach. The estimated fair value belongs to Level 3 of the fair value hierarchy
because the input is not easily observable. Using this approach, the Company calculates the time value of money of the amount recoverable
based on the Company's weighted average cost of capital ("WACC") in order to arrive at its fair value. The Company uses
this approach to determine its recoverable amount because a part of the factory plant is not readily resalable. Significant assumptions
used in this estimation include using the WACC, which is comprised of the Company's metrics of return of equity, return of debt,
the relevant weights of the returns of equity and debt, and tax rate, in determining the fair value. As a result, as at December 31, 2018,
the Company recorded as impairment loss in the amount of $13,311,557 in 2018, which brings the carrying value of the part of the factory
plant not in use down to $0 as management is unable to assert the recoverability of such asset.
During the year ended December 31, 2021,
the Company recognized impairment loss of $2,673,131 and $48,859 for Investment property and property, plants and buildings, respectively.
The Company further recognized impairment loss of $ 222,989 for the two land use rights which the two properties were built on. The impairment
reflects the current reduction in the value of the carrying cost as a result of the company's evaluation of the recoverability of
its investment. The impairment losses charged to the two pieces of properties and land use rights has brought the carrying values to their
respective recoverable amount in its fair value less costs to sell.
F-
26
7.
SEGMENT REPORTING
Management currently identifies the
Group's three sales models as operating segments, which are tourism products, technology and cross board merchandise. Apart from
the above two business segments, two segments were discontinued in 2022, which are wholesale and retail of menswear and subcontracting
of menswear. The segment presentation is in accordance with management's expectation of future business developments. These operating
segments are monitored and strategic decisions are made on the basis of segmental gross margins.
Tourism products
Technology
Cross- board merchandise
Consolidated
For the year ended
For the year ended
For the year ended
For the year ended
December 31,
December 31,
December 31,
December 31,
By business
2022
2021
2020
2022
2021
2020
2022
2021
2020
2022
2021
2020
Sales to external customers
79,092,342
51,818,166
991,929
782,302
-
-
83
2,222,782
343,445
79,874,727
54,040,948
1,335,374
Segment revenue
79,092,342
51,818,166
991,929
782,302
-
-
83
2,222,782
343,445
79,874,727
54,040,948
1,335,374
Segment gross margins
704,391
541,889
96,578
760,028
-
-
64
305,822
69,988
1,464,483
847,711
166,566
Reconciling items
-
-
-
-
-
-
-
(56,847,143
)
(8,194,585
)
(1,161,859
)
Loss  before tax
-
-
-
-
-
-
-
-
-
(55,382,660
)
(7,346,874
)
(995,293
)
Income tax income/(expense)
-
-
-
-
-
-
-
-
-
(621
)
(5,495
)
-
Loss for the continuing business
-
-
-
-
-
-
-
-
-
(55,383,281
)
(7,352,369
)
(995,293
)
Discontinued operation
-
-
-
-
-
-
-
-
-
(18,109,150
)
(29,863,116
)
(4,672,124
)
Loss for the year
-
-
-
-
-
-
-
-
-
(73,492,431
)
(37,215,483
)
(5,667,417
)
As of December 31, 2022
Wholesale and Retail
Subcontracting
Tourism products
cross-board
merchandise and technology
Unallocated
Consolidated
Current assets
-
-
369,770
2,792,929
303,874
3,466,573
Non-current assets
-
-
1,310
2,788,394
10,000,000
12,789,704
Total assets
-
-
371,080
5,581,323
10,303,874
16,256,277
Current liabilities
-
-
711,992
899,130
2,319,263
3,930,385
Total liabilities
-
-
711,992
899,130
2,319,263
3,930,385
As of December 31, 2021
Wholesale and Retail
Subcontracting
Tourism products
cross-board
merchandise
Unallocated
Consolidated
Current assets
18,640,119
2,610,448
450,129
2,809,431
(283,630
)
24,226,497
Non-current assets
2,410,407
8,111,375
674
3,345,469
-
13,867,925
Total assets
21,050,526
10,721,823
450,803
6,154,900
(283,630
)
38,094,422
Current liabilities
3,384,019
1,481,508
303,749
424,534
1,628,272
7,222,082
Total liabilities
3,384,019
1,481,508
303,749
424,534
1,628,272
7,222,082
F-
27
Geographical information
The Group's operations are located
in the PRC and all of the Group's revenue is derived from sales to customers in the PRC. Hence, no analysis by geographical area
of operations is provided.
Information about major customers
Major distributors that make up 10%
or more of revenue are as below:
Year ended December 31,
2022
2021
2020
Customer A
74,340,429
41,767,780
-
Customer B
*
9,439,831
-
Customer C
*
*
991,928
Total revenue
79,874,727
54,040,948
1,335,374
*
The revenue of this customer is not over 10% of total revenue
of the Company.
Information about major suppliers
Major suppliers that make up 10% or
more of purchases are as below:
Year ended December 31,
2022
2021
2020
Supplier A
-
-
354,710
Supplier B
-
-
483,879
Supplier C
-
9,586,155
-
Supplier D
10,562,686
15,551,014
-
Supplier E
15,496,731
-
-
Total purchase
78,902,955
53,168,205
1,430,207
8.
REVENUE
Year ended December 31,
2022
2021
2020
Travel service
79,092,342
51,818,166
991,929
Technology
782,302
-
-
Cross-board products
83
2,222,782
343,445
Total
79,874,727
54,040,948
1,335,374
Revenues are recognized at a point in
time and denominated only in USD.
F-
28
9.
COST OF REVENUE
Cost of revenue for our cross-board
business comprise the cost of products purchased and surcharges on purchase cost. Cost of revenue for our travel services comprise the
cost of air-tickets brought from airline or the cost of services provided from local travel firms or persons.
Cost of sales for our retail and wholesale
of garment business comprises of purchasing materials, labor costs for personnel employed in production, depreciation of non-current assets
used for production purpose, outsourced manufacturing cost, taxes and surcharges, and water and electricity.
The following table shows a breakdown
of cost of sales of all business for the periods presented for each category:
Year ended December 31,
2022
2021
2020
Changes in inventories of finished goods and work in progress
(494,357
)
83,112
(261,691
)
Materials consumed in production
-
-
Purchases of finished goods
201,734
1,808,963
1,430,208
Outsourced service cost
78,701,221
51,276,130
-
Taxes and surcharges *
1,646
25,032
291
78,410,244
53,193,237
1,168,808
*
Tax and surcharges are mainly Urban Maintenance and Construction Tax (7% of Valued Added Tax payment amount), Extra Charges of Education Fund (3% of Valued Added Tax payment amount) and Local Surcharge for Education Fund (2% of Valued Added Tax payment amount).
10.
OTHER INCOME
Year ended December 31,
2022
2021
2020
Government grant
1,592
-
-
Interest income on bank deposits
21
4
199
Other
15,023
34,789
2,923
16,636
34,793
3,122
11.
OTHER LOSSES
Year ended December 31,
2022
2021
2020
Bad debt provision of trade receivables
(53,991
)
-
-
Impairment of long-lived assets
(39,778
)
(12,500
)
-
Others
(4,881
)
(4,825
)
-
(98,650
)
(17,325
)
-
F-
29
12.
DISTRIBUTION AND SELLING EXPENSES
Year ended December 31,
2022
2021
2020
Outsourced service fee
403,458
1,212,403
-
Advertisement
-
140,704
-
Others
317,930
736
-
721,388
1,353,843
-
13.
ADMINISTRATIVE EXPENSE
Year ended December 31,
2022
2021
2020
Labor
53,550,086
3,155,246
832,534
Audit fee
247,782
200,000
114,400
Professional and other service fee
969,072
2,666,804
74,252
Design fee
-
-
2,039
Depreciation and amortization charges
299,547
21,603
-
Decoration
133,502
155,665
30,275
Rental
4,661
65,724
-
Travelling and entertainment
89,272
203,634
22,242
Others
749,819
389,534
89,239
56,043,741
6,858,210
1,164,981
14.
FINANCE COSTS
Year ended December 31,
2022
2021
2020
Interest expenses on bank borrowings
wholly repayable within one year
-
-
-
As the bank loans were disposed along with the
discontinued operation in 2022, the interest expenses in connection with the bank loans are reclassified as discontinued operations.
15.
INCOME TAX (INCOME)/ EXPENSE
Year ended December 31,
2022
2021
2020
PRC enterprises income tax:
Current tax
621
5,495
-
Deferred tax
-
-
-
621
5,495
-
Jin Xuan Luxury Tourism, Flower Crown
China and Heyang Travel are located in PRC and subject to the applicable enterprise income tax rate of 25%.
KBS Fashion Group Limited was incorporated
in the Marshall Island, and, under the current laws of the Marshall Island, is not subject to income taxes.
F-
30
Flower Crown Holding was incorporated
in the Cayman Islands, and, under the current laws of the Cayman Islands, is not subject to income taxes.
The tax charge for the Company can be
divided into non-PRC entities and PRC entities. As for the non-PRC entities, all the entities are expense center and not subject to any
tax and also no deferred tax assets are considered. The loss for the non-PRC for the year ended December 31, 2022 is $4,386,002. PRC entities
are operating entities and may be subject to income tax and deferred tax are considered. In 2022, menswear business was disposed and the
temporary difference and deferred tax were reversed accordingly.
The following is the analysis of the
deferred tax balances for financial reporting purposes:
2022
2021
2020
Temporary difference
Deferred tax assets
Temporary difference
Deferred tax assets
Temporary difference
Deferred tax assets
Beginning of the year
78,622,365
-
63,509,644
16,960,839
59,616,758
14,330,463
Bad Debt provisions charged to profit or loss
-
-
6,064,120
1,516,030
(2,334,410
)
583,603
Inventory provision charged to profit or loss
-
-
1,283
321
-
-
Impairment charged to profit or loss
-
-
2,944,979
736,245
-
-
Tax loss carried forward
1,687,686
421,922
6,102,339
1,529,706
6,227,296
1,556,824
Allowance
(421,922
)
(21,245,906
)
-
-
Reverse
(75,924,049
)
-
Effect of translation
-
-
-
502,765
-
489,949
End of the year
4,386,002
-
78,622,365
-
63,509,644
16,960,839
16.
(LOSS)/PROFIT FOR THE YEAR
(continuing business)
Profit for the year has been arrived
at after charging:
Year ended December 31,
2022
2021
2020
Cost of inventories recognized as expenses
78,408,598
53,168,205
1,168,517
Taxes and surcharges
1,646
25,032
291
78,410,244
53,193,237
1,168,808
Depreciation of property, plant and equipment
299,547
21,932
-
Amortization of land use rights and trademarks
-
-
-
Amortization of prepayments and premiums under operating leases
-
-
-
Provision (Reversal) of inventory obsolescence
39,778
-
-
Provision of bad debt allowance
53,991
-
-
Provision of impairment loss in property
-
-
-
393,316
21,932
-
F-
31
17.
DISCONTINUED OPERATIONS
On October 19, 2022, the Company
entered into a stock purchase agreement with a Purchaser and closed the transaction pursuant to the terms of the Stock Purchase Agreement,
resulting in the Company's sale of 20,000 shares of common stock (the "Shares") in Hongri International Holding Limited
("Hongri"), constituting all of the issued and outstanding capital stock in Hongri, in consideration for $10,000,000.
The subsidiary was sold on October 19,
2022 with effect from November 1, 2022 and is reported in the current period as a discontinued operation. Financial information relating
to the discontinued operation for the period to the date of disposal is set out below.
a)
Financial performance and cash flow information
Year ended December 31,
2022
2021
2020
Revenue
1,887,410
4,960,693
9,540,775
Cost of revenue
(2,183,080
)
(4,228,577
)
(7,208,923
)
Expenses
(3,486,626
)
(4,353,466
)
(6,533,339
)
Other income/expenses - net
(5,133,118
)
(8,778,160
)
(2,027,461
)
Profit before tax
(8,915,414
)
(12,399,510
)
(6,228,948
)
Income tax
-
(17,463,604
)
1,556,824
Profit after tax
(8,915,414
)
(29,863,114
)
(4,672,124
)
-
Net cash from operating activities
(2,733,104
)
(3,872,380
)
(5,901,544
)
Net cash from investing activities
-
(1,926
)
(8,494
)
Net cash from financing activities
-
-
-
Net cash decrease of disposed subsidiaries
(2,733,104
)
(3,874,306
)
(5,910,038
)
b)
Details of sale of the subsidiary
Fair value of the consideration
10,000,000
Net asset of the disposed asset
(15,166,042
)
Loss on sale before reclassification of foreign currency translation reserve
(5,166,042
)
Reclassification of foreign currency translation reserve
(4,027,694
)
Loss on disposal of discontinued operations
(9,193,736
)
Carrying amount of the investment cost of the
disposed assets:
Cash
8,695,890
Trade receivables
2,335,650
Other current assets
97,966
Investment property-net
6,390,022
Other long-term assets
2,890,967
Total assets
20,410,495
Short-term loan
(1,087,154
)
Tax payables
(2,775,363
)
Other liabilities
(1,381,936
)
Total liabilities
(5,244,453
)
Net assets
15,166,042
F-
32
18.
DIRECTORS' EMOLUMENTS
The emoluments paid or payable to the
directors of the Company were as follows:
Year ended December 31,
2022
2021
2020
Salaries
Yan Keyan
-
597,669
306,466
Sun Lei
1,470,000
772,000
-
Li Huidan
228,000
772,000
-
Mu Ruifeng
228,000
-
-
Jin Yan
228,000
-
-
Lixia Tu
-
-
237,880
John Sano
-
-
10,350
Themis Kalapotharakos
-
-
82,800
Matthew Los
-
-
82,800
Zhongmin Zhang
-
-
10,350
Yuet Mei Chan
-
-
10,350
2,154,000
2,141,669
740,996
Social Welfare
Yan Keyan
-
1,242
432
-
1,242
432
19.
LOSS PER SHARE
For the years ended December 31,
2022
2021
2020
Basic Loss Per Share Numerator
Profit for the year attributable to owners of the Company
$
(73,492,431
)
$
(37,215,483
)
$
(5,667,417
)
Diluted Loss Per Share Numerator
Profit for the year attributable to owners of the Company
$
(73,492,431
)
$
(37,215,483
)
$
(5,667,417
)
Basic Loss Per Share Denominator
Original shares:
5,899,893
3,408,646
2,591,299
Additions from actual events:
- Issuance of common stock, weighted
10,915,573
1,115,699
121,229
Basic weighted average shares outstanding
16,815,466
4,524,345
2,712,528
Diluted Loss Per Share Denominator
Basic weighted average shares outstanding
16,815,466
4,524,345
2,712,528
Dilutive shares: Potential additions from dilutive events:
- Exercise of investor warrants*
Diluted Weighted Average Shares Outstanding:
16,815,466
4,524,345
2,712,528
Loss Per Share**
- Basic
$
(43.7
)
$
(82.3
)
$
(20.9
)
- Diluted
$
(43.7
)
$
(82.3
)
$
(20.9
)
Weighted Average Shares Outstanding**
- Basic
1,681,547
452,345
271,253
- Diluted
1,681,547
452,345
271,253
*
There were no potential dilutive additions to diluted weighted shares outstanding as a result of the loss during the periods presented.
**
The Company took a 1:10 reverse stock split on April 26, 2023, as a result, the basic and diluted shares and per share number for all years presented here are adjusted retrospectively.
F-
33
20.
PROPERTY, PLANT AND EQUIPMENT
Owner-occupied Property
Plant
Machinery
Office
equipment
Motor
vehicles
Furniture
and
fixtures
Leasehold
improvements-
factories and
offices
Leasehold
improvements-
shops
Total
COST
At December 31, 2020
7,191,993
45,324
137,150
33,800
160,979
896,680
269,029
8,734,955
Additions
2,311,212
11,332
999,829
2,526
3,324,899
Disposals
(45,876
)
(20,638
)
(34,211
)
(1,591
)
(907,602
)
(272,306
)
(1,282,224
)
Reclassification to investment property
(5,487,395
)
-
-
-
-
-
-
(5,487,395
)
Translation adjustment
150,063
552
3,642
15,632
4,455
10,922
3,277
188,543
At December 31, 2021
4,165,873
-
131,486
1,015,050
166,369
-
-
5,478,778
Additions
-
-
-
-
1,008
-
-
1,008
Disposals
(1,716,185
)
-
(118,285
)
-
(156,406
)
-
-
(1,990,876
)
Translation adjustment
(289,116
)
-
(7,601
)
(80,387
)
(9,481
)
-
-
(386,585
)
At December 31, 2022
2,160,573
-
5,600
934,663
1,489
-
-
3,102,326
DEPRECIATION AND IMPAIRMENT
At December 31, 2020
(4,459,340
)
(45,324
)
(135,065
)
(30,609
)
(159,973
)
(798,006
)
(269,029
)
(5,897,346
)
Provided for the year
(186,439
)
-
(773
)
(20,856
)
(57
)
(9,118
)
-
(217,243
)
Eliminated upon disposal of assets
-
45,876
18,171
30,982
1,263
816,842
272,305
1,185,439
Depreciation reclassified to investment property
1,602,628
-
-
-
-
-
-
1,602,628
Impairment reclassified to investment property
1,792,237
-
-
-
-
-
-
1,792,237
Impairment
(48,859
)
-
-
-
-
-
-
(48,859
)
Translation adjustment
(74,928
)
(552
)
(3,462
)
(691
)
(4,395
)
(9,718
)
(3,276
)
(97,022
)
At December 31, 2021
(1,374,701
)
-
(121,129
)
(21,174
)
(163,162
)
-
-
(1,680,166
)
Provided for the year
(70,084
)
-
(1,817
)
(227,388
)
(258
)
-
-
(299,547
)
Disposal of subsidiaries
1,296,658
-
113,591
-
153,845
-
-
1,564,095
Translation adjustment
79,710
-
6,935
7,083
9,270
-
-
102,998
At December 31, 2022
(68,418
))
-
(2,419
)
(241,479
)
(304
)
-
-
(312,622
)
CARRYING AMOUNT
At December 31, 2021
2,791,172
-
10,357
993,876
3,207
-
-
3,798,612
At December 31, 2022
2,092,155
-
3,181
693,184
1,185
-
-
2,789,704
F-
34
Depreciation is provided on straight-line
basis for all property, plant and equipment over their estimated useful lives of the assets as follows:
Useful life
Residual Value
Plant
30 years
5%
Machinery
5 years
10%
Office equipment
3 years
5%
Motor vehicles
4 years
5%
Furniture and fixtures
3 years
5%
Leasehold improvements-factories and offices
Shorter of estimated useful life of 5 years or lease term
10%
Leasehold improvements-shops
Shorter of estimated useful life of 5 years or lease term
Nil
Distributor shops' furniture and fixtures
1.5 years
Nil
Plant and building include buildings
owned by the Company are set out below:
Location
Description
Gross
    area (m
2
)
Jinxi Town, Longshan Road, Taihu City, Anhui Province, the PRC
Dormitory
8,573
Jinxi Town, Longshan Road, Taihu City, Anhui Province, the PRC
Factory
22,292
8-101 Bojingwan Beiyuan, Hexi District, Tianjing, the PRC
Office
242
The first two buildings were disposed
along with the menswear business in 2022.
Investment Properties
As at December 31, 2021, fair value
approximated carry amounts, being the initial cost to acquire these investment properties.
COST
2021
Opening balance at 1 January
24,118,655
Acquisitions
-
Capitalized subsequent expenditure
-
Classified as held for sale or disposals
-
Transfer (to)/from inventories and owner-occupied property
5,487,395
Translation adjustment
748,918
Closing balance at 31 December
30,354,968
DEPRECIATION AND IMPAIRMENT
2021
Opening balance at 1 January
(15,844,460
)
Provided for the year
(540,273
)
Eliminated upon disposal of assets
-
Impairment for the year
(2,673,131
)
Transfer to/(from) inventories and owner-occupied property
(3,394,864
)
Translation adjustment
(537,712
)
Closing balance at 31 December
(22,990,440
)
F-
35
CARRYING AMOUNT
2021
Closing balance at 31 December
7,364,527
21.
PREPAYMENTS AND PREMIUMS UNDER OPERATING LEASES
Amount
At January 1, 2021
2,419,900
additions for the year
3,411
charge for the year
(81,474
)
translation adjustment
65,572
At December 31, 2021
2,407,409
additions for the year
-
charge for the year
-
disposed
2,407,409
At December 31, 2022
-
Analyzed for reporting purposes as:
As at December 31,
2022
2021
Current asset
-
82,714
Non-current asset
-
2,324,695
-
2,407,409
22.
LONG TERM RECEIVABLE
On October 19, 2022, the Company entered
into a stock purchase agreement with a Purchaser and closed the transaction pursuant to the terms of the Stock Purchase Agreement, resulting
in the Company's sale of 20,000 shares of common stock (the "Shares") in Hongri International Holding Limited ("Hongri"),
constituting all of the issued and outstanding capital stock in Hongri, in consideration for $10,000,000.
The Purchaser issued to the Company
a 5% promissory note in the principal amount of $10,000,000, in payment of the Purchase Price (the "Note"). The Note is payable
in four installments, on the following dates and in the following amounts: (a) $1,000,000, together with an accrued interest, is payable
on or before November 19, 2022; (b) $2,000,000, together with an accrued interest, is payable on or before April 19, 2023; (c) $3,000,000,
together with an accrued interest, is payable on or before April 19, 2024, and (d) the remaining $4,000,000, together with an accrued
interest, is payable on or before October 19, 2024. As the 5% interest rate is very close to the market rate, the management assessed
the fair value of the note receivable is $10 million as of December 31, 2022.
Analyzed for reporting purposes as:
As at December 31,
2022
2021
Current portion
3,000,000
-
Non-current portion
7,000,000
-
Total receivable
10,000,000
-
As of April 24, 2023, the first two
instalments of the principal amount $3,000,000 have been collected.
23.
PREPAYMENT FOR ACQUISITION OF LAND USE RIGHT
On September 2, 2010, Hongri Fujian
entered into an agreement with a third party, Taihu Weiqi Sports Apparel Co., Ltd., to acquire a land use right in relation to the development
of factories in Anhui Kaixin for a total consideration of $6,340,456. As of December 31, 2015, the transaction has not been completed
yet due to disputes between the original owner of the land and the government regarding the compensation for vacating the premises. In
relation to this dispute, the Company expected that the project would be delayed or, in the worst case, be terminated. Accordingly, the
Company provided a provision of impairment loss against the carrying value for such prepayment. The detail estimation of such provision
is explained in note 6.
The assets were disposed along with
the menswear business in 2022, no more assets as of December 31, 2022.
F-
36
24.
LAND USE RIGHTS
Amount
COST
At January 1, 2021
734,990
additions for the year
-
translation adjustment
20,277
At December 31, 2021
755,267
additions for the year
-
Disposed due to discontinued operation
(755,267
)
At December 31, 2022
-
AMORTIZATION
At January 1, 2021
(130,020
)
charge for the year
(14,958
)
impairment
(222,989
)
translation adjustment
(7,209
)
At December 31, 2021
(375,176
)
charge for the year
-
Disposed due to discontinued operation
375,176
At December 31, 2022
-
CARRYING AMOUNTS
At December 31, 2021
380,091
At December 31, 2022
-
The amounts represent the prepayment
of rentals for land use right (industrial use) situated in the PRC. The land use rights have the term of 50 years.
25.
INVENTORIES
As at December 31,
2022
2021
Raw materials
-
773,180
Merchandised goods
483,384
392,018
Provision for obsolete inventories
(38,833
)
(1,302
)
444,551
1,163,896
26.
TRADE RECEIVABLES, OTHER RECEIVABLES AND PREPAYMENTS
As at December 31,
2022
2021
Trade receivables
37,487
18,952,763
Bad debt provision for trade receivables
(37,487
)
(11,215,912
)
-
7,736,851
As at December 31,
2022
2021
Other receivables
318,643
344,437
Long-term receivable to be collected within 1 year
3,000,000
-
Prepayments
2,182,463
1,983,685
5,501,106
2,328,122
The fair value of trade and other receivables
have not been disclosed as, due to their short duration, management considers the carrying amounts recognized in the consolidated statements
of financial position to be reasonable approximation of their fair values.
Prepayments include advances to suppliers,
prepaid expenses and prepaid income tax.
F-
37
Before accepting any new customer, the
Group assesses the potential customer's credit quality and defined credit limits by customer. Limits attributed to customers are
reviewed once a year. The aging analysis of trade receivables is as follows:
As at December 31,
2022
2021
Current
-
2,629,433
Past due for less than 4 months
-
1,411,252
Past due for more than 4 months
37,487
14,912,078
37,487
18,952,763
The provision for doubtful debts is
recorded using a provision account unless the Group is satisfied that recovery is remote, in which case the unrecovered loss is written
off against trade receivables and the provision for doubtful debts directly. The Group does not hold any collateral over these balances.
The movement in the provision for doubtful
debts during the year is as follows:
2022
2021
As at January 1
11,215,912
4,923,646
Provision provided in the year
37,487
6,076,620
Reverse due to disposal of subsidiaries
(11,215,912
)
Translation adjustment
-
215,646
As at December 31
37,487
11,215,912
27.
CASH AND CASH EQUIVALENTS
As at December 31,
2022
2021
Cash on hand
-
9,470
Bank deposits
243,530
12,905,444
Other monetary funds
277,386
-
520,916
12,914,914
As at December 31,
2022
2021
Renminbi
520,883
12,914,834
Hong Kong Dollars
33
80
United States Dollars
-
-
520,916
12,914,914
Cash and cash equivalents comprise cash
held by the Group and short-term deposits with an original maturity of three months or less. Bank deposits as at December 31, 2022 carry
interest at market rates which ranged from 0.30% to 0.40% (2020: 0.30%-0.40%) per annum. Majority of our cash is deposited with financial
institution in the PRC. Remittance of funds out of the PRC is subject to the exchange restrictions imposed by the PRC government.
F-
38
28.
TRADE AND OTHER PAYABLES
As at December 31,
2022
2021
Trade payables
670,965
297,033
Employee benefits payable
15,925
148,232
Accrual and other payables
632,186
1,811,262
Subtotal financial liabilities
1,319,076
2,256,527
Other taxes payable
-
3,098,596
1,319,076
5,355,123
The fair value of trade and other payables
have not been disclosed as, due to their short duration, management considers the carrying amounts recognized in the consolidated statements
of financial position to be reasonable approximation of their fair values.
Trade payables comprise amounts outstanding
for trade purchase. The average credit period is 30 days from the time when the services are rendered by or goods received from suppliers.
The aging analysis of trade payables is as follows:
As at December 31,
2022
2021
Current
-
294,938
Past due for less than 4 months
431,202
2,046
Past due for over 4 months
239,763
49
670,965
297,033
The Company was granted a credit term
of 30 days. The balances past due were mainly for the Company's high bargaining power.
29.
RELATED PARTIES PAYABLE
(1)
Nature of relationship with related parties
Name
Relationship with the Group
Yan, Keyan
EX-chairman of the Board of Directors and interim Chief Financial Officer
Sun, Lei
Chief Executive Officer and Co-chairman of the Board of Directors
Li Huidan
Co-Chairman of the Board of Directors
Mu Ruifeng
Director
Jin Yan
Director
(2)
Significant balances between the Group and the above related parties:
As at December 31,
Name
Nature
2022
2021
Yan, Keyan
Borrowing of funds
-
36,697
Li, Huidan
2,122,697
Sun, Lei
Borrowing of funds
488,400
430,871
2,611,097
467,568
F-
39
Related parties payables were unsecured,
non-interest bearing and repayment on demand.
(3) Significant related parties transactions
between the Group and the above related parties:
During 2022, the Company issued 1,000,000
shares to Sun Lei for her compensation.
During 2022, the Company issued 300,000
shares to 3 Directors for their compensation as below:
Name
Shares issued
Value
Mu Ruifeng
100,000
$
228,000
Jin Yan
100,000
228,000
Li Huidan
100,000
228,000
300,000
$
684,000
30.
SHORT-TERM BANK LOANS
As at December 31,
2022
2021
Secured bank borrowings
-
1,180,656
Carrying amount repayable within 1 year
-
1,180,656
31.
RIGHTS
On March 12, 2021, the Company announced
the authorization and declaration of a dividend distribution of one right for each outstanding share of common stock, par value $0.0001
per share, of the Company to stockholders of record as of the close of business on March 31, 2021. Each Right will entitle the holder
to purchase, for the Exercise Price of $50, 0.00667 of a share of Preferred Stock having economic and other terms similar to that of one
share of Common Stock. This portion of a share of Preferred Stock is intended to give the stockholder approximately the same dividend,
voting and liquidation rights as would one share of Common Stock, and should approximate the value of one share of Common Stock.
If an Acquiring Person obtains beneficial
ownership of 15 percent or more of the Common Stock, then each Right will entitle the holder thereof to purchase, for the Exercise Price,
a number of shares of Common Stock (or, in certain circumstances, cash, property or other securities of the Company) having a then-current
market value of twice the Exercise Price. All Rights that are or, under certain circumstances specified in the Rights Agreement, were
beneficially owned by an Acquiring Person or certain of its transferees will be void.
In general, if anyone acquires 15% or
more of the common stock of the Company, the Rights will give rights holders, other than the Acquiring Person, to buy common stock at
lower price to significantly dilute the Acquiring Person. The Board adopted the Rights Agreement to protect stockholders from coercive
or otherwise unfair takeover tactics. In general terms, it works by imposing a significant penalty upon any person or group that acquires
15 percent or more of the shares of Common Stock without the approval of the Board. As a result, the overall effect of the Rights Agreement
and the issuance of the Rights may be to render more difficult or discourage a merger, tender or exchange offer or other business combination
involving the Company that is not approved by the Board.
As of December 31, 2022, there are 4,233,272
rights issued and outstanding. The number of the rights since issued has not been changed.
F-
40
The Company classified the Rights as
permanent equity in the consolidated balance sheets because they are convertible to preferred B share which are further convertible to
common stock of the Company. The Preferred Shares are recorded initially at fair value, net of issuance costs.
The fair value of the rights was determined
using a Black-Scholes model. This model requires the input of highly subjective assumptions, including price volatility of the underlying
stock. Changes in the subjective input assumptions can materially affect the estimate of fair value of the rights and the Company's
results of operations could be impacted. This model is dependent upon several variables such as the instrument's expected term,
expected strike price, expected risk-free interest rate over the expected instrument term, the expected dividend yield rate over the expected
instrument term, and the expected volatility of the Company's stock price over the expected term. The expected term represents the
period of time that the instruments granted are expected to be outstanding. The expected strike price is based upon a weighted average
probability analysis of the strike price changes expected during the term as a result of the down round protection. The risk-free rates
are based on U.S. Treasury securities with similar maturities as the expected terms of the options at the date of valuation. Expected
dividend yield is based on historical trends. The Company measures volatility using the volatility rates of market index.
The inputs to the model were as follows:
December 31,
2021
Exercise price
50
Dividend yield
-
Risk-free rate
1.54
%
Expected term (in years)
10
Expected volatility
79.68
%
32.
SHARE CAPITAL AND SHARE PREMIUM
The details of the Group's share
capital are as follows:
Number of
shares
Share
capital
Share
premium
Shares outstanding as December 31, 2020
3,408,646
341
11,312,643
Issuance of shares
2,491,247
249
6,257,155
Issuance of rights
-
-
7,149,995
Shares outstanding as December 31, 2021
5,899,893
590
24,719,793
Issuance of shares
54,733,443
5,473
53,239,760
Shares outstanding as December 31, 2022
60,633,336
6,063
72,959,554
Number of
shares
Share
capital
Share
premium
Authorized Common shares of US$0.0001 as at December 31, 2022
150,000,000
$
15,000
$
-
Issue and fully paid common shares of US$0.0001 as at December 31, 2020
3,408,646
341
$
11,312,643
Issue and fully paid common shares of US$0.0001 as at December 31, 2021
5,899,893
590
$
24,719,794
Issue and fully paid common shares of US$0.0001 as at December 31, 2022
60,633,336
6,063
$
72,959,554
Preferred Stock
The Company is authorized to issue 5,000,000
preferred shares with a par value of $0.0001 per share with such designation, rights and preferences as may be determined by the Company's
board of directors.
On April 8, 2021, the Company issued
1,500,000 shares of our newly-designated Series A Convertible Preferred Stock to a single investor for total subscription proceeds of
$1,500,000. Each Series A Convertible Preferred Stock features a stated value of $1.00 and is convertible to 1 share of our common stock
at any time after 6 months from the date of issue. All shares of common stock issuable upon conversion of the Series A Preferred Stock
are subject to a two-year lock-up agreement running from the initial closing of the financing.
F-
41
On September 1, 2021, the Company issued
150,000 shares of our newly-designated Series C Convertible Preferred Stock to Sun Lei, our Chief Executive Officer for total subscription
proceeds of $1,500,000 of a private offering. A Series C Convertible Preferred Stock features a stated value of $10.00 and is convertible
to shares of our common stock on a 1 do 5 basis at any time after 6 months from the date of issue. Series C Convertible Preferred Stock
votes together without common stock on an as-if-converted basis, which is not exercisable for one year, has no special dividend rights,
and ranks equally to our common stock with respect to rights upon liquidation. All shares of common stock issuable upon conversion of
the Series C Preferred Stock are subject to a one-year lock-up agreement running from the initial closing of the financing.
On November 1, 2021, the "Company
closed the private placement offering (the "Offering") of its newly-designated Series D Convertible Preferred Stock, par value
$0.0001 per share ("Series D Convertible Preferred Stock"), in which the Company issued 100,000 shares of Series D Convertible
Preferred Stock (the "Shares") for the total gross proceeds of $3,900,000. As stated in the Certificate of Designation, shares
of Series D Convertible Preferred Stock vote together with holders of shares of common stock, par value $0.0001 per share (the "Common
Stock") of the Company on an as-if-converted basis; have no special dividend right, ranks equal to the Common Stock with respect
to rights upon liquidation and are convertible into shares of Common Stock on a 1 do 13 basis at any time following the issuance.
Holders of Series A, C and D Convertible
Preferred Stock converted certain preferred stock to common stock during 2021. Following table shows the changes of the preferred stock
during 2021:
Preferred A
Preferred C
Preferred D
shares
Amount $
Shares
Amount $
Shares
Amount $
At December 31, 2020
-
-
-
-
-
-
New issued during the year
1,500,000
1,500,000
150,000
1,500,000
100,000
3,900,000
Converted to common stock
(260,000
)
(260,000
)
-
-
(20,000
)
(780,000
)
At December 31, 2021
1,240,000
1,240,000
150,000
1,500,000
80,000
3,120,000
Changes
-
-
-
-
-
-
At December 31, 2022
1,240,000
1,240,000
150,000
1,500,000
80,000
3,120,000
The Company classified all Preferred
Shares as permanent equity in the consolidated balance sheets because they are not redeemable and convertible to common stock of the Company.
The Preferred Shares are recorded initially at fair value, net of issuance costs.
Common Stock
The Company is authorized to issue 150,000,000
shares of common stock with a par value of $0.0001 per share.
On February 12, 2021, the Company granted
an aggregate of 674,626 shares of common stock to Mr. Yan Keyan, Co-Chairman of the Board to repurchase his loan to the Company with value
of $809,551
.
On March 4, 2021, the Company issued
150,000 shares to employee for service to the Company.
On June 4, 2021, the Company issued
16,621 shares for a legal service to the Company.
On September 7, 2021, the Company issued
650,000 registered shares of common stock pursuant to Equity Incentive Plan to the executive officers, directors and certain employees
as compensations for their services.
On October 1, 2021, the Company issued
360,000 shares to employees for their services to the Company.
On December 8, 2021, the Company issued
120,000 shares to employees for their compensation.
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42
On October 19, 2021 and November 15,
2021, the Company issued 260,000 shares each for Preferred A shares and Preferred D shares conversion, respectively.
During 2021, all common shares were issued
to employees, Directors and executives for their compensations and there is no vesting period. The fair value was determined based on
the market price on the date of grant. All compensations are recorded as general and administrative expenses with a corresponding increase
in equity.
On April 19 and 21, 2022, the Company
issued 520,000 shares each to employees for their services to the Company.
On May 6, 2022, the Company issued 200,000
shares to an employee for his compensation.
On May 6, 2022, the Company issued 500,000
shares to three board members in leu of their compensation.
On May 16, 2022, the Company issued
3,400,000 shares to employees for their compensation.
On May 26, 2022, the Company issued
1,000,000 shares to Sun Lei for her compensation.
From June to September 2022, the Company
issued 8,800,000 shares to employees and cancelled 6,519 shares for their compensation.
From November to December 2022, the
Company issued 39,999,962 shares to employees for their compensation.
During
2022, all common shares were issued to employees, Directors and executives for their compensations and there is no vesting period. The
fair value was determined based on the market price on the date of grant. All compensations are recorded as general and administrative
expenses with a corresponding increase in equity.
33.
RESERVE
Statutory surplus reserve
As stipulated by the relevant laws and
regulations applicable to China's foreign investment enterprises, the Company's PRC subsidiaries are required to maintain
a statutory surplus reserve which is non-distributable. Appropriations to such reserve are made out of net profit after tax of the statutory
financial statements of the PRC subsidiaries at the amounts determined by their respective boards of directors annually up to 50% of authorized
capital, but must not be less than 10% of the net profit after tax.
The statutory surplus reserve can be
used for making up losses of the group entities in Mainland China, if any. The statutory surplus reserve may also be used to increase
capital or to meet unexpected or future losses. The statutory surplus reserve is non-distributable other than upon liquidation.
The statutory surplus reserve of the
Group amounts to nil and $6,084,836 at December 31, 2022 and 2021, respectively. The statutory surplus reserve of the Group as at December
31, 2021 is related to Hongri Fujian and Anhui Kaixin, which were both disposed in 2022.
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43
Revaluation reserve
Revaluation reserve as of December 31,
2022 and 2021 are nil and $184,272, respectively. The balance as of December 31, 2021 is comprised of the surplus or deficit arising from
the revaluation of the Company's fixed assets of Hongri Fujian and Anhui Kaixin, which were both disposed in 2022.
Retained profits/ (accumulated deficits)
The retained profits/(accumulated deficits)
comprise the cumulative net gains and losses recognized in the Company's income statement.
Foreign currency translation reserve
(other comprehensive income)
Foreign currency translation reserve
represents the foreign currency translation difference arising from the translation of the financial statements of companies within the
Group from their functional currency to the Group's presentation currency.
34.
RISK MANAGEMENT AND FAIR VALUES
1.
Capital risk
The Group manages its capital to ensure
that entities in the Group will be able to continue as a going concern while maximizing the return to owners through the optimization
of the debt and equity balance. The Group's overall strategy remains unchanged during the year.
The capital structure of the Group
consisted of borrowings net of bank balances and cash, and equity attributable to owners of the Company comprising issued share capital
and various reserves.
The directors of the Company review
the capital structure regularly. As part of this review, the Group considers the cost of capital and the risks associated with each class
of capital, and will balance its overall capital through the payment of dividends, new share issues as well as the issue of new debt or
the redemption of existing debt.
The Group monitors capital using the
Gearing Ratio, which is net debt divided by total equity. Net debt represents borrowings less cash and cash equivalents. The Company met
its objective by minoring borrowing activities.
The Company and its subsidiaries are
not subject to externally imposed capital requirements.
December 31,
2022
December 31,
2021
Total borrowing
-
1,180,656
Less: cash and cash equivalents
(520,916
)
(12,914,914
)
Net debt
(520,916
)
(11,734,258
)
Total equity
12,325,892
30,872,341
Total capital
11,804,976
19,138,083
Gearing ratio
(1
)%
(38
)%
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44
2.
Financial risk
Financial risk management objectives
and policies
The Group's major financial instruments
include trade and other receivables, related parties receivables, cash and cash equivalents, trade and other payables, related parties
payables and short-term loans. Details of these financial instruments are disclosed in the respective notes. The risks associated with
these financial instruments include credit risk, market risk (interest rate risk and currency risk) and liquidity risk. The policies on
how to mitigate these risks are set out below. The management manages and monitors these exposures to ensure appropriate measures are
implemented on a timely and effective manner.
3.
Market risk
(i)
Foreign currency risk
While our reporting currency is the U.S.
dollar, substantially all of our consolidated revenues and consolidated costs and expenses are denominated in RMB. Substantially all 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 the 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. Assets and liabilities
are translated at exchange rates at the balance sheet dates and revenue and expenses are translated at the average exchange rates and
equity is translated at historical exchange rates. Any resulting translation adjustments are not included in determining net income but
are included in determining other comprehensive income, a component of equity. As of December 31, 2022, our accumulated other comprehensive
loss was $(0.06) million. We have not entered into any hedging transactions in an effort to reduce our exposure to foreign exchange risk.
(ii)
Interest rate risk
We deposit surplus funds with Chinese
banks earning daily interest. We do not invest in any instruments for trading purposes. Most of our outstanding debt instruments carry
fixed rates of interest. Our operations generally are not directly sensitive to fluctuations in interest rates and we currently do not
have any long-term debt outstanding. Management monitors the banks' prime rates in conjunction with our cash requirements to determine
the appropriate level of debt balances relative to other sources of funds. We have not entered into any hedging transactions in an effort
to reduce our exposure to interest rate risk.
4.
Credit risk
As at December 31, 2022, the Group's
maximum exposure to credit risk which will cause a financial loss to the Group due to failure to perform an obligation by the counterparties
is arising from the carrying amount of the respective recognized financial assets as stated in the consolidated statement of financial
position.
In order to minimize the credit risk,
the management of the Group has delegated a team responsible for determination of credit limits, credit approvals and other monitoring
procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of
each individual trade debt at the end of each reporting period to ensure that adequate impairment losses are made for irrecoverable amounts.
In this regard, the directors of the Group consider that the Group's credit risk is significantly reduced.
The Group's exposure to credit
risk on receivables in influenced mainly by the individual characteristics of each customer therefore concentrations of credit risk primarily
arise when the Group has significant exposure to individual customers. In order to minimize the credit risk, management continuously monitors
the level of exposure to ensure that follow-up actions and/or corrective actions are taken promptly to lower the risk exposure or to recover
overdue balances.
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45
5.
Liquidity risk
In the management of the liquidity
risk, the Group monitors and maintains a level of cash and bank balances deemed adequate by the management to finance the Group's
operations and mitigate the effects of fluctuations in cash flows. The management monitors the utilization of bank borrowings and ensures
compliance with loan covenants.
Liquidity tables
The following tables detail the Group's
remaining contractual maturity for its non-derivative financial liabilities as at December 31, 2022 based on agreed repayment terms. The
tables have been drawn up based on undiscounted cash flows of financial liabilities based on the earliest date on which the Group can
be required to pay. The tables include both interest and principal cash flows.
As at December 31, 2022
Within
1 year
Over
1 year
Total
Short-term bank loans and related interests
-
-
-
Trade and other payables
1,319,288
-
1,319,288
Related parties payables
2,611,097
-
2,611,097
Total
3,930,385
-
3,930,385
As at December 31, 2021
Within
1 year
Over
1 year
Total
Short-term bank loans and related interests
1,180,656
-
1,180,656
Trade and other payables
5,355,123
-
5,355,123
Related parties payables
467,568
-
467,568
Total
7,003,347
-
7,003,347
6.
Fair value
The fair value of financial assets
and financial liabilities is determined in accordance with generally accepted pricing models based on discounted cash flow analysis.
The following table presents the fair
value of the Group's financial instruments measured at the end of the reporting period on a recurring basis, categorized into the
three-level fair value hierarchy as defined in IFRS 13, Fair Value Measurement. The level into which a fair value measurement is classified
is determined with reference to the observability and significance of the inputs used in the valuation technique as follows:
-
Level 1 valuations: Fair value measured using only Level 1 inputs i.e. unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.
-
Level 2 valuations: Fair value measured using Level 2 inputs i.e. observable inputs which fail to meet Level 1, and not using significant unobservable inputs. Unobservable inputs are inputs for which market data are not available.
-
Level 3 valuations: Fair value measured using significant unobservable inputs.
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46
During the years ended December 31,
2022 and 2021, there were no transfers between Level 1 and Level 2, or transfers into or out of Level 3. The Group's policy is to
recognize transfers between levels of fair value hierarchy as at the end of the reporting period in which they occur.
Valuation techniques and inputs
used in Level 2 fair value measurements
The fair value of financial assets
in Level 2 is determined by the model as disclosed in note 31.
The directors of the Company consider
that the carrying amounts of financial assets and financial liabilities recorded at amortized cost approximate their fair values.
35.
COMMITMENTS AND CONTINGENCIES
(1)
The Company had the following capital commitments in respect of the construction of plant and equipment which were contracted but not provided for in the financial statements:
As at
December 31,
2022
As at
December 31,
2021
Contracted and authorized, in RMB
-
440,851,273
Contracted and authorized, in USD
-
69,399,168
(2)
As of December 31, 2022, the Company guaranteed a loan to a third party with maximum liability exposure of US$652,297.
36.
EVENTS AFTER THE BALANCE SHEET
Effective on April 26, 2023, the Company's
Common Stock began trading on the Nasdaq Capital Market ("Nasdaq") on a one-for-ten (1-for-10) reverse-split basis under the
current symbol "JXJT" but with a new CUSIP number. The EPS figures showed in the financial statements are calculated based
on the number of shares after  reverse-split.
* * * * *
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