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Item 1A. Risk Factors

2020-03-31 compared with 2019-03-11 · 1524 added, 1673 removed, 38 unchanged (99% of the section changed)

6 unchanged sentences

own investigation with respect to us and our business.

Associated with Our Business

have no operating history and, accordingly, you will not have any basis on which to evaluate our ability to achieve our business

have no operating results to date.

Since we do not have an operating history, you will have no basis upon which to evaluate our

ability to achieve our business objective, which is to acquire an operating business.

We will not generate any revenues until,

at the earliest, after the consummation of a business combination.

we are unable to consummate a business combination, our public shareholders may be forced to wait until February 20, 2020 (or

until June 20, 2020 if we extend the period of time to consummate a business combination through issuance of the potential extension

warrants, as described in more detail herein) before receiving liquidation distributions.

have until February 20, 2020 (or June 20, 2020 if we extend the period of time to consummate a business combination through issuance

of the potential extension warrants, as described in more detail herein) in which to complete a business combination.

no obligation to return funds to investors prior to such date unless we consummate a business combination prior thereto and only

then in cases where investors have sought to convert their shares.

Only after the expiration of this full time period will public

shareholders be entitled to liquidation distributions if we are unable to complete a business combination.

Accordingly, investors’

funds may be unavailable to them until after such date and to liquidate your investment, you may be forced to sell your securities

potentially at a loss.

requirement that we complete an initial business combination within a specific period of time may give potential target businesses

leverage over us in negotiating a business transaction.

have until February 20, 2020 (or June 20, 2020 if we extend the period of time to consummate a business combination through issuance

of the potential extension warrants, as described in more detail herein) to complete an initial business combination.

Any potential

target business with which we enter into negotiations concerning a business combination will be aware of this requirement.

Consequently,

such target business may obtain leverage over us in negotiating a business combination, knowing that if we do not complete a business

combination with that particular target business, we may be unable to complete a business combination with any other target business.

This risk will increase as we get closer to the time limits referenced above.

sponsor may decide not to extend the term we have to consummate our initial business combination, in which case we would cease

all operations except for the purpose of winding up and we would redeem our public shares and liquidate, and the warrants and

rights will be worthless.

have until February 20, 2020 to consummate our initial business combination.

However, if we anticipate that we may not be able

to consummate our initial business combination by February 20, 2020, we may, by resolution of our board of directors, extend the

period of time to consummate a business combination to no later than June 20, 2020 as set out below.

Pursuant to the terms of

our amended and restated memorandum and articles of association and the trust agreement entered into between us and Continental

Stock Transfer & Trust Company on August 15, 2018, in order for the time available for us to consummate our initial business

combination to be extended, we must issue to holders of our public shares by way of a dividend one warrant to purchase one half

of an ordinary share for an aggregate of up to 25,000,000 potential extension warrants.

In the event that we extend the period

to consummate our initial business combination by issuing the potential extension warrants referenced above, we will issue a press

release announcing such intention at least one month prior to our February 20, 2020 deadline.

This press release will indicate

(i) that the record date to establish the holders of record entitled to receive the dividend of potential extension warrants will

be February 20, 2020 and (ii) the payment date of such dividend.

Alternatively, pursuant to the terms of our amended and restated

memorandum and articles of association and the trust agreement entered into between us and Continental Stock Transfer & Trust

Company on August 15, 2018, we may extend the period of time to consummate a business combination by obtaining shareholder approval,

in which case we will afford public shareholders an opportunity to redeem their public shares.

If we extend the period of time

to consummate a business combination by obtaining shareholder approval, we will not issue the potential extension warrants discussed

In either case, we are not obligated to extend the time for us to complete our initial business combination.

we are unable to consummate our initial business combination within the applicable time period, we will, as promptly as reasonably

possible but not more than ten business days thereafter, redeem the public shares for a pro rata portion of the funds held in

the trust account and as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders

and our board of directors, dissolve and liquidate, subject in each case to our obligations under Cayman Islands law to provide

for claims of creditors and the requirements of other applicable law.

In such event, the warrants and rights will be worthless.

ability to obtain an extension of time to consummate an initial business combination by issuing potential extension warrants is

different than other similarly structured blank check companies.

order to obtain an extension of time to consummate an initial business combination, many blank check companies have been required

to place additional funds in trust for the benefit of their public shareholders, thereby increasing the per-share liquidation

amount payable to public shareholders if the company is unable to consummate an initial business combination by the extended deadline.

In contrast, as indicated above, we can obtain a four month extension to consummate our initial business combination by issuing

to holders of our public shares, by way of a dividend, one warrant to purchase one half of one ordinary share for an aggregate

of up to 25,000,000 potential extension warrants.

If we are unable to consummate a business combination by the new deadline, the

potential extension warrants will expire worthless and our public shareholders will receive the same per-share liquidation amount

they would have received if we had not extended the time to consummate a business combination.

are not entitled to protections normally afforded to investors of blank check companies.

are deemed to be a “blank check”

company under the United States securities laws.

However, since we have net tangible

assets in excess of $5,000,000, we are exempt from rules promulgated by the SEC to protect investors of blank check companies

such as Rule 419.

Accordingly, investors are not afforded the benefits or protections of those rules which would, for example,

completely restrict the transferability of our securities, restrict the use of interest earned on the funds held in the trust

account and require us to complete a business combination by February 20, 2020.

Because we are not subject to Rule 419, we are

entitled to withdraw amounts from the funds held in the trust account prior to the completion of a business combination and we

may have more time to complete an initial business combination.

may issue ordinary or preferred shares or debt securities to complete a business combination, which would reduce the equity interest

of our shareholders and likely cause a change in control of our ownership.

memorandum and articles of association currently authorize the issuance of up to 200,000,000 ordinary shares, par value $.0001

per share, and 2,000,000 preferred shares, par value $.0001 per share.

Immediately after our initial public offering and the purchase

of the private warrants, there were 147,050,000 authorized but unissued ordinary shares available for issuance (after appropriate

reservation for the issuance of the shares underlying the public and private warrants, potential extension warrants and rights).

Although we have no commitment as of the date of this report, we may issue a substantial number of additional ordinary shares

or preferred shares, or a combination of ordinary shares and preferred shares, to complete a business combination.

of additional ordinary shares or preferred shares:

significantly reduce the equity interest of investors in our initial public offering;

subordinate the rights of holders of ordinary shares if we issue preferred shares with rights senior to those afforded to our

ordinary shares;

cause a change in control if a substantial number of ordinary shares are issued, which may affect, among other things, our ability

to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and

adversely affect prevailing market prices for our ordinary shares.

if we issue debt securities, it could result in:

and foreclosure on our assets if our operating revenues after a business combination are insufficient to repay our debt obligations;

● acceleration

of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain

covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;

immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand;

inability to obtain necessary additional financing if the debt security contains covenants restricting our ability to obtain such

financing while the debt security is outstanding.

the net proceeds of our initial public offering not being held in trust are insufficient to allow us to operate until February

20, 2020 (or until June 20, 2020 if we extend the period of time to consummate a business combination through issuance of the

potential extension warrants, as described in more detail herein), we may be unable to complete a business combination.

believe that the funds available to us outside of the trust account as of December 31, 2018 of $406,994, along with the sponsor

commitment of $300,000, are sufficient to allow us to operate until February 20, 2020 (or until June 20, 2020 if we extend the

period of time to consummate a business combination through issuance of the potential extension warrants, as described in more

detail herein), assuming that a business combination is not consummated during that time.

However, we cannot assure you that our

estimates will be accurate.

Accordingly, if we use all of the funds held outside of the trust account, we may not have sufficient

funds available with which to structure, negotiate or close an initial business combination.

In such event, we would need to borrow

funds from our sponsor, initial shareholders, officers or directors or their affiliates to operate or may be forced to liquidate.

Our sponsor, initial shareholders, officers, directors and their affiliates may, but are not obligated to (except as described

herein), loan us funds, from time to time or at any time, in whatever amount that they deem reasonable in their sole discretion

for our working capital needs.

Each loan would be evidenced by a promissory note.

The notes would either be paid upon consummation

of our initial business combination, without interest, or, at holder’s discretion, up to $1,000,000 of the notes may be

converted into warrants at a price of $0.50 per warrant.

In February 2019, the Sponsor committed to provide us an aggregate of

$300,000 in loans.

The loans, as well as any future loans that may be made by the Sponsor (or its affiliates), will be evidenced

by notes and would either be repaid upon the consummation of a Business Combination or up to $1,000,000 of the notes may be converted

into warrants at a price of $0.50 per warrant at the option of the lender.

may be unable to obtain additional financing, if required, to complete a business combination or to fund the operations and growth

of the target business, which could compel us to restructure or abandon a particular business combination.

cannot ascertain the capital requirements for any particular transaction.

If the net proceeds of our initial public offering prove

to be insufficient, either because of the size of the business combination, the depletion of the available net proceeds in search

of a target business, or the obligation to convert into cash (or purchase in any tender offer) a significant number of shares

from dissenting shareholders, we will be required to seek additional financing.

Such financing may not be available on acceptable

terms, if at all.

To the extent that additional financing proves to be unavailable when needed to consummate a particular business

combination, we would be compelled to either restructure the transaction or abandon that particular business combination and seek

an alternative target business candidate.

In addition, if we consummate a business combination, we may require additional financing

to fund the operations or growth of the target business.

The failure to secure additional financing could have a material adverse

effect on the continued development or growth of the target business.

None of our officers, directors or shareholders is required

to provide any financing to us in connection with or after a business combination.

third parties bring claims against us, the proceeds held in trust could be reduced and the per-share liquidation price received

by shareholders may be less than $10.00.

placing of funds in trust may not protect those funds from third party claims against us.

Although we seek to have all vendors

and service providers we engage and prospective target businesses we negotiate with execute agreements with us waiving any right,

title, interest or claim of any kind in or to any monies held in the trust account for the benefit of our public shareholders,

they may not execute such agreements.

Furthermore, even if such entities execute such agreements with us, they may seek recourse

against the monies held in the trust account.

A court may not uphold the validity of such agreements.

Accordingly, the proceeds

held in trust could be subject to claims which could take priority over those of our public shareholders.

If we liquidate the

trust account before the completion of a business combination, TKK Capital Holding has agreed that it will be liable to ensure

that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities

that are owed money by us for services rendered or contracted for or products sold to us and which have not executed a waiver

However, it may not be able to meet such obligation.

Therefore, the per-share distribution from the trust account in

such a situation may be less than $10.00, plus interest, due to such claims.

Additionally,

if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, or if

we otherwise enter compulsory or court supervised liquidation, the proceeds held in the trust account could be subject to applicable

bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the

claims of our shareholders.

To the extent any bankruptcy claims deplete the trust account, we may not be able to return to our

public shareholders at least $10.00 per share.

shareholders may be held liable for claims by third parties against us to the extent of distributions received by them.

amended and restated memorandum and articles of association provide that we will continue in existence only until February 20,

2020 (or until June 20, 2020 if we extend the period of time to consummate a business combination through issuance of the potential

extension warrants, as described in more detail herein) if a business combination has not been consummated by such time.

are unable to complete an initial business combination during such time period, it will trigger our automatic winding up, liquidation

and dissolution.

As such, our shareholders could potentially be liable for any claims to the extent of distributions received

by them pursuant to such process and any liability of our shareholders may extend beyond the date of such distribution.

we cannot assure you that third parties, or us under the control of an official liquidator, will not seek to recover from our

shareholders amounts owed to them by us.

we are unable to consummate a transaction within the required time period, upon notice from us, the trustee of the trust account

will distribute the amount in our trust account to our public shareholders.

Concurrently, we shall pay, or reserve for payment,

from funds not held in trust, our liabilities and obligations, although we cannot assure you that there will be sufficient funds

for such purpose.

If there are insufficient funds held outside the trust account for such purpose, TKK Capital Holding has agreed

that it will be liable to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or

claims of vendors or other entities that are owed money by us for services rendered or contracted for or products sold to us and

which have not executed a waiver agreement.

we are forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful

payment if it was proved that immediately following the date on which the distribution was made, we were unable to pay our debts

as they fall due in the ordinary course of business.

As a result, a liquidator could seek to recover all amounts received by our

shareholders.

Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors and/or

may have acted in bad faith, thereby exposing themselves and our company to claims, by paying public shareholders from the trust

account prior to addressing the claims of creditors.

We cannot assure you that claims will not be brought against us for these

We and our directors and officers who knowingly and willfully authorized or permitted any distribution to be paid out

of our share premium account while we were unable to pay our debts as they fall due in the ordinary course of business would be

guilty of an offense and may be liable to pay a fine of US$18,292.68 and subject to imprisonment for five years in the Cayman

of warrants and rights will not have redemption rights if we are unable to complete an initial business combination within the

required time period.

we are unable to complete an initial business combination within the required time period and we redeem the funds held in the

trust account, the warrants and rights will expire and holders will not receive any of such proceeds with respect to the warrants

have no obligation to net cash settle the warrants or rights.

no event will we have any obligation to net cash settle the warrants or rights.

Accordingly, the warrants and rights may expire

each warrant is exercisable for only one-half of one ordinary share, the units may be worth less than units of other blank check

warrant is exercisable for one-half of one ordinary share.

Warrants may be exercised only for a whole number of ordinary shares.

No fractional shares will be issued upon exercise of the warrants.

As a result, warrant holders not purchasing an even number

of units must sell any odd number of warrants in order to obtain full value from the fractional interest that will not be issued.

This is different from other offerings similar to ours whose units include one ordinary share and one warrant to purchase one

whole ordinary share.

We have established the components of the units in this way in order to reduce the dilutive effect of the

warrants upon completion of an initial business combination since the warrants will be exercisable in the aggregate for one-half

of the number of ordinary shares compared to units that each contain a warrant to purchase one whole share, thus making us, we

believe, a more attractive merger partner for target businesses.

Nevertheless, this unit structure may cause our units to be worth

less than if they included a warrant to purchase one whole share.

we do not maintain a current and effective prospectus relating to the ordinary shares issuable upon exercise of the redeemable

warrants, public holders will only be able to exercise such redeemable warrants on a “cashless basis”

result in a fewer number of shares being issued to the holder had such holder exercised the redeemable warrants for cash.

as set forth below, if we do not maintain a current and effective prospectus relating to the ordinary shares issuable upon exercise

of the warrants at the time that holders wish to exercise such warrants, they will only be able to exercise them on a “cashless

basis,”

provided that an exemption from registration is available.

As a result, the number of ordinary shares that a holder

will receive upon exercise of its warrants will be fewer than it would have been had such holder exercised its warrant for cash.

Further, if an exemption from registration is not available, holders would not be able to exercise their warrants on a cashless

basis and would only be able to exercise their warrants for cash if a current and effective prospectus relating to the ordinary

shares issuable upon exercise of the warrants is available.

Under the terms of the warrant agreement, we have agreed to use our

best efforts to meet these conditions and to maintain a current and effective prospectus relating to the ordinary shares issuable

upon exercise of the warrants until the expiration of the warrants.

However, we cannot assure you that we will be able to do so.

If we are unable to do so, the potential “upside”

of the holder’s investment in our company may be reduced or

the warrants may expire worthless.

Notwithstanding the foregoing, the private warrants may be exercisable for unregistered ordinary

shares for cash even if the prospectus relating to the ordinary shares issuable upon exercise of the warrants is not current and

investor will only be able to exercise a warrant or convert a right if the issuance of ordinary shares upon such exercise or conversion

has been registered or qualified or is deemed exempt under the securities laws of the state of residence of the holder of the

warrants and/or rights.

warrants will be exercisable for cash and no rights will be convertible and we will not be obligated to issue ordinary shares

unless the ordinary shares issuable upon such exercise or conversion have been registered or qualified or deemed to be exempt

under the securities laws of the state of residence of the holder of the warrants and/or rights.

At the time that the warrants

become exercisable or the rights become convertible, we expect to continue to be listed on a national securities exchange, which

would provide an exemption from registration in every state.

However, we cannot assure you of this fact.

If the ordinary shares

issuable upon exercise of the warrants or conversion of rights are not qualified or exempt from qualification in the jurisdictions

in which the holders of the warrants and/or rights reside, the warrants and/or rights may be deprived of any value, the market

for the warrants and/or rights may be limited and they may expire worthless if they cannot be sold.

management’s ability to require holders of our redeemable warrants to exercise such redeemable warrants on a cashless basis

will cause holders to receive fewer ordinary shares upon their exercise of the redeemable warrants than they would have received

had they been able to exercise their redeemable warrants for cash.

we call our warrants for redemption after the redemption criteria described elsewhere in this report have been satisfied, our

management will have the option to require any holder that wishes to exercise his warrants (including any warrants held by our

initial shareholders or their permitted transferees) to do so on a “cashless basis.”

If our management chooses to

require holders to exercise their warrants on a cashless basis, the number of ordinary shares received by a holder upon exercise

will be fewer than it would have been had such holder exercised his warrants for cash.

This will have the effect of reducing the

potential “upside”

of the holder’s investment in our company.

may amend the terms of the warrants in a way that may be adverse to holders with the approval by the holders of a majority of

the then outstanding warrants.

warrants are issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant

agent, and us.

The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder

to cure any ambiguity or correct any defective provision.

The warrant agreement requires the approval by the holders of a majority

of the then outstanding warrants (including the private warrants) in order to make any change that adversely affects the interests

of the registered holders.

Accordingly, we would need approval from the holders of only 6,000,001, or 24.0%, of the public warrants

to amend the terms of the warrants (assuming that the holders of the private warrants voted in favor of such amendment).

may amend the terms of the rights in a way that may be adverse to holders with the approval by the holders of a majority of the

then outstanding rights.

rights are issued in registered form under a rights agreement between Continental Stock Transfer & Trust Company, as rights

agent, and us.

The rights agreement provides that the terms of the rights may be amended without the consent of any holder to

cure any ambiguity or correct any defective provision.

The rights agreement requires the approval by the holders of a majority

of the then outstanding rights in order to make any change that adversely affects the interests of the registered holders.

we have not yet selected a particular industry or target business with which to complete a business combination, we are unable

to currently ascertain the merits or risks of the industry or business in which we may ultimately operate.

we intend to focus our search for target businesses on specific locations and industry sectors as described herein, we are not

limited to those locations and sectors and may consummate a business combination with a company in any location or industry we

Accordingly, there is no current basis for you to evaluate the possible merits or risks of the particular industry in

which we may ultimately operate or the target business which we may ultimately acquire.

To the extent we complete a business combination

with a financially unstable company or an entity in its development stage, we may be affected by numerous risks inherent in the

business operations of those entities.

If we complete a business combination with an entity in an industry characterized by a

high level of risk, we may be affected by the currently unascertainable risks of that industry.

Although our management will endeavor

to evaluate the risks inherent in a particular industry or target business, we cannot assure you that we will properly ascertain

or assess all of the significant risk factors.

We also cannot assure you that an investment in our units will not ultimately prove

to be less favorable to investors in our initial public offering than a direct investment, if an opportunity were available, in

a target business.

requirement that the target business or businesses that we acquire must collectively have a fair market value equal to at least

80% of the balance of the funds in the trust account at the time of the execution of a definitive agreement for our initial business

combination may limit the type and number of companies that we may complete such a business combination with.

to the Nasdaq listing rules, the target business or businesses that we acquire must collectively have a fair market value equal

to at least 80% of the balance of the funds in the trust account at the time of the execution of a definitive agreement for our

initial business combination.

This restriction may limit the type and number of companies with which we may complete a business

If we are unable to locate a target business or businesses that satisfy this fair market value test, we may be forced

to liquidate and you will only be entitled to receive your pro rata portion of the funds in the trust account.

Nasdaq delists our securities from trading on its exchange after our initial public offering, we would not be required to satisfy

the fair market value requirement described above and could complete a business combination with a target business having a fair

market value substantially below 80% of the balance in the trust account.

ability to successfully effect a business combination and to be successful thereafter will be totally dependent upon the efforts

of our key personnel, some of whom may join us following a business combination.

While we intend to closely scrutinize any individuals

we engage after a business combination, we cannot assure you that our assessment of these individuals will prove to be correct.

ability to successfully effect a business combination is dependent upon the efforts of our key personnel.

We believe that our

success depends on the continued service of our key personnel, at least until we have consummated our initial business combination.

We cannot assure you that any of our key personnel will remain with us for the immediate or foreseeable future.

In addition, none

of our officers are required to commit any specified amount of time to our affairs and, accordingly, they will have conflicts

of interest in allocating management time among various business activities, including identifying potential business combinations

and monitoring the related due diligence.

We do not have employment agreements with, or key-man insurance on the life of, any

of our officers.

The unexpected loss of the services of our key personnel could have a detrimental effect on us.

role of our key personnel in the target business, however, cannot presently be ascertained.

Although some of our key personnel

may remain with the target business in senior management or advisory positions following a business combination, it is likely

that some or all of the management of the target business will remain in place or be hired after consummation of the business

While we intend to closely scrutinize any individuals we engage after a business combination, we cannot assure you

that our assessment of these individuals will prove to be correct.

These individuals may be unfamiliar with the requirements of

operating a public company which could cause us to have to expend time and resources helping them become familiar with such requirements.

This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.

officers and directors may not have significant experience or knowledge regarding the jurisdiction or industry of the target business

we may seek to acquire.

we intend to focus our search for target businesses within the locations and industries as described herein, we may consummate

a business combination with a target business in any geographic location or industry we choose.

Relating to Our Business and Industry

are many risks and uncertainties that may affect our operations, performance, development and results.

Many of these risks are

beyond our control.

The following is a description of the important risk factors that may affect our business.

If any of these

risks were to actually occur, our business, financial condition or results of operations could be materially adversely affected.

Additional risks and uncertainties not currently known to us or that we currently consider to be immaterial may also materially

adversely affect our business, financial condition or results of operations.

we fail to anticipate user preferences and provide high-quality content, especially popular original content, in a cost-effective

manner, we may not be able to attract and retain users to remain competitive.

success depends on our ability to maintain and grow users and user time spent on the CHEERS App.

To attract and retain users and

compete against our competitors, we must continue to offer high-quality content, especially popular original content that provides

our users with a superior online entertainment experience.

To this end, we must continue to produce new original content and source

new talent and producers in a cost effective manner.

Given that we operate in a rapidly evolving industry, we must anticipate

user preferences and industry trends and respond to such trends in a timely and effective manner.

If we fail to fulfill the needs

and preferences of our users in order to deliver a superior user experience or control our costs in doing so, we may suffer from

reduced user traffic, and our business, financial condition and results of operations may be materially and adversely affected.

currently rely on our in-house team of employees to generate creative ideas for original content and to supervise the original

content origination and production process and intends to continue to invest our human and capital resources in such content production.

We face fierce competition for qualified personnel in a limited pool of high-quality creative talent.

If we are not able to compete

effectively for highly qualified personnel or attract and retain top talent at reasonable costs, our original content production

capabilities would be materially and adversely impacted.

If we are unable to offer popular original content that addresses our

user’s tastes and preferences in a cost effective manner, we may suffer a reduction in user traffic and our business, financial

condition and results of operations may be materially and adversely affected.

operate in a capital intensive industry and require a significant amount of cash to fund our operations and to produce or acquire

high quality video content.

If we fail to obtain sufficient capital to fund our operations, our business, financial condition

and future prospects may be materially and adversely affected.

operation of an internet video streaming content provider and producer of television shows requires significant and continuous

investment in content production or acquisition and video production technology.

Producing high-quality original content is costly

and time-consuming and typically requires a long period of time in order to realize a returns on investment, if at all.

cannot obtain adequate capital to meet our capital needs, we may not be able to fully execute our strategic plans for growth and

our business, financial condition and prospects may be materially and adversely affected.

We anticipate that we will need approximately

$75 million to support our working capital needs in the next twelve (12) months.

Even though we have recognized net income for

the years ended December 31, 2017 and 2018, historically we have funded our working capital requirements through profits, bank

loans and private placement of capital raise.

As of June 30, 2019, we had approximately $38.2 million in working capital.

our efforts to retain users and attract new users for our mobile and on-line video content and e-commerce products are not successful,

our business, financial condition and results of operations will be materially and adversely affected.

addition to our content production for television shows, we have experienced significant user growth for our mobile and on-line

video and e-commerce products over the past several years.

Our ability to continue to retain users and attract new users will

depend in part on our ability to consistently provide our users with compelling content choices, as well as a quality experience

for selecting and viewing video content.

If we introduce new features or service offerings, or change the mix of existing features

and services offerings, in a manner that is not favorably received by our users, we may not be able to attract and retain users

and our business, financial condition and results of operations would be materially and adversely affected.

we fail to retain existing or attract new advertising customers to advertise within our mobile and online video content or on

our e-commerce platform, maintain and increase our wallet share of advertising budget, or if we are unable to collect accounts

receivable in a timely manner, our business, financial condition and results of operations may be materially and adversely affected.

generate a substantial part of our revenues from advertising placed within our mobile and online video content and on our e-commerce

With the launch of our e-Mall in 2019, we anticipate that although mobile and online advertising revenue as a percentage

of our total revenues is expected to decrease due to the fast growth in revenues generated in our e-Mall, our mobile and online

advertising business is still growing and remains one of our largest sources of revenue.

However, because our advertising customers

are not under long term contracts, we may not be able to retain our advertising customers in the future, attract new advertising

customers continuously or be able to retain our advertising customers at all.

If our advertising customers find that they can

generate better returns elsewhere, or if our competitors provide better online advertising services to suit the advertising customers’

goals, we may lose some or all of our advertising customers.

In addition, third parties may develop and use certain technologies

to block the display of online advertisements, and should this occur our members will be able to skip the viewing of our advertising

customers’

advertisements, which may in turn cause us to lose advertising customers.

If our advertising customers determine

that their expenditures on internet video streaming platforms or our video content does not generate expected returns, they may

allocate a portion or all of their advertising budgets to other advertising channels such as television, newspapers and magazines

or other internet channels such as e-commerce and social media platforms, and reduce or discontinue business with us.

of our advertising customers are not bound by long-term contracts, they may easily reduce or discontinue advertising arrangements

without incurring material liabilities.

Failure to retain existing advertising customers or attract new advertising customers

to advertise within the video content produced by us or on our e-commerce platform may materially and adversely affect our business,

financial conditions and results of operations.

brand advertising customers typically enter into advertising agreements through various third-party advertising agencies.

In China’s

advertising industry, advertising agencies typically have good relationships and maintain longer periods of cooperation with the

brand advertising customers they represent.

In addition to entering into advertising contracts directly with advertising customers,

we also enter into advertising contracts with third-party advertising agencies, which represent advertising customers, even if

we have direct contact with such advertisers.

As a result, we rely on third-party advertising agencies for sales to, and collection

of payment from, our brand advertisers.

The financial soundness of our advertising customers and advertising agencies may affect

our collection of accounts receivable.

We make a credit assessment of our advertising customers and advertising agencies to evaluate

the collectability of the advertising service fees before entering into an advertising contract.

However, we may not be able to

accurately assess the creditworthiness of each advertising customer or advertising agency, and any inability of advertising customers

or advertising agencies to pay us for our services in a timely manner would negatively our liquidity and cash flows and may materially

and adversely affect our business, financial condition and results of operations.

operate in a highly competitive market and we may not be able to compete effectively.

We face significant competition

in China in various sub-markets we operate, primarily from Alibaba (Nasdaq:

BABA), Pin Duoduo (Nasdaq:PDD), Douyu (Nasdaq:

Qu Toutiao (Nasdaq:

QTT), Mango Media (SZ.300413), and TVZone Media (SH.603721).

We compete for users, usage time, advertising

customers, and shoppers.

Some of our competitors have a longer operating history and significantly greater financial resources

than we do, and, in turn, may be able to attract and retain more users, usage time and advertising customers.

our competitors may

compete with us in a variety of ways, including by conducting brand promotions and other marketing activities, and making investments

in and acquisitions of our business partners.

If any of our competitors achieves greater market acceptance than we do or are able

to offer more attractive internet video content, our user traffic and our market share may decrease, which may result in a loss

of advertising customers, shoppers, and users, as well as have a material and adverse effect on our business, financial condition

and results of operations.

We also face competition for users and user time from major television stations, which are increasing

their internet video offerings.

We also face competition from users and user time from other internet media and entertainment services,

such as internet and social media platforms that offer content in emerging and innovative media formats.

success of our business depends on our ability to maintain and enhance our brand.

believe that maintaining and enhancing our brand is of significant importance to the success of our business.

Our well-recognized

brand is critical to increasing our user base and, in turn, expanding our shoppers for our e-commerce platform and attractiveness

to advertising customers and content providers.

Since the internet video industry is highly competitive, maintaining and enhancing

our brand depends largely on our ability to become and remain a market leader in China, which may be difficult and expensive to

To the extent our original content is perceived as low quality or otherwise not appealing to users, our ability to

maintain and enhance our brand may be adversely impacted which in turn may result in a loss of users for our mobile and online

video and e-commerce platform.

in professionally-produced content, or PPC, by others may have a material and adverse effect on our business, financial condition

and results of operations.

depend on the quality of our PPC for the success of our business model.

The amount of PPC, especially TV series and movies, have

recently increased significantly in China and may continue to increase in the future.

Due to relatively robust online advertising

budgets, internet video streaming platforms are generating more revenues and are competing aggressively to produce and license

more PPC in general.

As the demand for quality PPC grows, the number of PPC producers will likely grow resulting in an increase

in competition for our users and usage time, which in turn may result in a loss of advertising customers, users, and shoppers

on our e-commerce platform.

Any significant loss in advertising customers, users, or shoppers on our e-commerce platform would

have a material and adverse effect on our business, financial condition and results of operations.

continued and collaborative efforts of our senior management and key employees are crucial to our success, and any loss of senior

management or key employees may materially and adversely affect our business, financial condition and results of operations.

success depends on the continued and collaborative efforts of our senior management, especially our executive officers, including

our founder, Mr.

If one or more of our executives or other key personnel are unable or unwilling to continue to provide

their services, we may not be able to find suitable replacements easily or at all.

Competition for management and key personnel

is intense and the pool of qualified candidates is limited.

We may not be able to retain the services of our executives or key

personnel, or attract and retain experienced executives or key personnel in the future.

If any of our executive officers or key

employees joins a competitor or forms a competing business, we may lose crucial business secrets, technological know-how, advertisers

and other valuable resources.

Each of our executive officers and key employees has entered into an employment agreement which

contains non-compete provisions.

However, we cannot assure you that they will abide by the employment agreements or that our efforts

to enforce these agreements will be effective enough to protect our interests.

limited operating history makes it difficult to evaluate our business and prospects.

expect to continue to grow our user and customer bases and explore new market opportunities.

However, due to our limited operating

history since 2016, our historical growth rate may not be indicative of our future performance.

We cannot assure you that our

officers and directors will have enough experience or have sufficient knowledge relating to the jurisdiction of the target or

its industry to make an informed decision regarding a business combination.

we become aware of a potential business combination outside of the geographic location or industry where our officers and directors

have the most experience, our management may retain consultants and advisors with experience in such industries to assist in the

evaluation of such business combination and in our determination of whether or not to proceed with such a business combination.

However, our management is not required to engage consultants or advisors in any situation.

If they do not engage any consultants

or advisors to assist them in the evaluation of a particular target business or business combination, our management may not properly

analyze the risks attendant with such target business or business combination.

Even if our management does engage consultants

or advisors to assist in the evaluation of a particular target business or business combination, we cannot assure you that such

consultants or advisors will properly analyze the risks attendant with such target business or business combination.

we may enter into a business combination that is not in our shareholders’

best interests.

key personnel may negotiate employment or consulting agreements with a target business in connection with a particular business

These agreements may provide for them to receive compensation following a business combination and as a result, may

cause them to have conflicts of interest in determining whether a particular business combination is the most advantageous.

key personnel will be able to remain with the company after the consummation of a business combination only if they are able to

negotiate employment or consulting agreements or other arrangements in connection with the business combination.

Such negotiations

would take place simultaneously with the negotiation of the business combination and could provide for such individuals to receive

compensation in the form of cash payments and/or our securities for services they would render to the company after the consummation

of the business combination.

The personal and financial interests of such individuals may influence their motivation in identifying

and selecting a target business.

officers and directors allocate their time to other businesses thereby potentially limiting the amount of time they devote to

This conflict of interest could have a negative impact on our ability to consummate our initial business combination.

officers and directors are not required to commit their full time to our affairs, which could create a conflict of interest when

allocating their time between our operations and their other commitments.

We presently expect each of our employees to devote

such amount of time as they reasonably believe is necessary to our business (which could range from only a few hours a week while

we are trying to locate a potential target business to a majority of their time as we move into serious negotiations with a target

business for a business combination).

We do not intend to have any full time employees prior to the consummation of our initial

business combination.

All of our officers and directors are engaged in several other business endeavors and are not obligated

to devote any specific number of hours to our affairs.

If our officers’

and directors’

other business affairs require

them to devote more substantial amounts of time to such affairs, it could limit their ability to devote time to our affairs and

could have a negative impact on our ability to consummate our initial business combination.

We cannot assure you these conflicts

will be resolved in our favor.

officers and directors have pre-existing fiduciary and contractual obligations and accordingly, may have conflicts of interest

in determining to which entity a particular business opportunity should be presented.

officers and directors have pre-existing fiduciary and contractual obligations to other companies, including other companies that

are engaged in business activities similar to those intended to be conducted by us.

Accordingly, they may participate in transactions

and have obligations that may be in conflict or competition with our consummation of our initial business combination.

a potential target business may be presented by our management team to another entity prior to its presentation to us and we may

not be afforded the opportunity to engage in a transaction with such target business.

For instance, Sing Wang, our Chief Executive

Officer and Chairman, is Chief Executive Officer and a director of CM Seven Star Acquisition Corporation, a blank check company

that went public in October 2017 and is currently seeking a target business with which to consummate an initial business combination.

CM Seven Star has until January 30, 2019 to complete its initial business combination (subject to an extension to April 30, 2019

and further extensions upon shareholder approval).

Subject to Mr.

Wang’s fiduciary duties under Cayman Islands law, Mr.

Wang will present opportunities for target businesses to CM Seven Star prior to presenting them to us unless such opportunity

is expressly offered to Mr.

Wang solely in his capacity as a director and/or officer of our company and such opportunity is one

we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue.

As CM Seven Star is

not currently seeking a target business for its initial business combination, we do not believe the fiduciary duties of Mr.

owed to CM Seven Star will affect our ability to complete our initial business combination.

officers’

and directors’

personal and financial interests may influence their motivation in determining whether a

particular target business is appropriate for a business combination.

officers, directors and our sponsor, which is affiliated with certain of our officers, have waived their right to convert (or

sell to us in any tender offer) their insider shares or any other ordinary shares acquired in our initial public offering or thereafter

(although none of these insiders have indicated any intention to purchase units in our initial public offering or thereafter)

or to receive distributions from the trust account with respect to their insider shares upon our liquidation if we are unable

to consummate our initial business combination.

Accordingly, these securities will be worthless if we do not consummate our initial

business combination.

Symphony has also, through an affiliate, purchased from us an aggregate of 13,000,000 private warrants at

$0.50 per private warrant (for a total purchase price of $6,500,000) that will expire worthless if we do not consummate a business

In addition, our officers and directors or their affiliates may loan funds to us after our initial public offering

and may be owed reimbursement for expenses incurred in connection with certain activities on our behalf which would only be repaid

if we complete an initial business combination.

The personal and financial interests of our directors and officers may influence

their motivation in timely identifying and selecting a target business and completing a business combination.

Consequently, our

directors’

and officers’

discretion in identifying and selecting a suitable target business may result in a conflict

of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and

in our shareholders’

best interest.

If this were the case, it would be a breach of their fiduciary duties to us as a matter

of Cayman Islands law and we might have a claim against such individuals.

However, we might not ultimately be successful in any

claim we may make against them for such reason.

may delist our securities from trading on its exchange which could limit investors’

ability to make transactions in our

securities and subject us to additional trading restrictions.

securities are listed on the Nasdaq Capital Market, a national securities exchange.

However, we cannot assure you that our securities

will continue to be listed on Nasdaq in the future prior to an initial business combination.

Additionally, in connection with

our initial business combination, it is likely that Nasdaq will require us to file a new initial listing application and meet

its initial listing requirements as opposed to its more lenient continued listing requirements.

We cannot assure you that we will

be able to meet those initial listing requirements at that time.

Nasdaq delists our securities from trading on its exchange, we could face significant material adverse consequences, including:

limited availability of market quotations for our securities;

liquidity with respect to our securities;

determination that our ordinary shares are “penny stock”

which will require brokers trading in our ordinary shares

to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for

our ordinary shares;

limited amount of news and analyst coverage for our company;

decreased ability to issue additional securities or obtain additional financing in the future.

may only be able to complete one business combination with the proceeds of our initial public offering, which will cause us to

be solely dependent on a single business which may have a limited number of products or services.

may only be able to complete one business combination with the proceeds of our initial public offering.

By consummating a business

combination with only a single entity, our lack of diversification may subject us to numerous economic, competitive and regulatory

developments.

Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting

of losses, unlike other entities which may have the resources to complete several business combinations in different industries

or different areas of a single industry.

Accordingly, the prospects for our success may be:

dependent upon the performance of a single business, or

upon the development or market acceptance of a single or limited number of products, processes or services.

lack of diversification may subject us to numerous economic, competitive and regulatory developments, any or all of which may

have a substantial adverse impact upon the particular industry in which we may operate subsequent to a business combination.

Alternatively,

if we determine to simultaneously acquire several businesses and such businesses are owned by different sellers, we will need

for each of such sellers to agree that our purchase of its business is contingent on the simultaneous closings of the other business

combinations, which may make it more difficult for us, and delay our ability, to complete the business combination.

With multiple

business combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple

negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent

assimilation of the operations and services or products of the acquired companies in a single operating business.

If we are unable

to adequately address these risks, it could negatively impact our profitability and results of operations.

ability of our public shareholders to exercise their conversion rights or sell their public shares to us in a tender offer may

not allow us to effectuate the most desirable business combination or optimize our capital structure.

our business combination requires us to use substantially all of our cash to pay the purchase price, because we will not know

how many public shareholders may exercise conversion rights or seek to sell their public shares to us in a tender offer, we may

either need to reserve part of the trust account for possible payment upon such conversion, or we may need to arrange third party

financing to help fund our business transaction.

In the event that the business combination involves the issuance of our shares

as consideration, we may be required to issue a higher percentage of our shares to make up for a shortfall in funds.

Raising additional

funds to cover any shortfall may involve dilutive equity financing or incurring indebtedness at higher than desirable levels.

This may limit our ability to effectuate the most attractive business combination available to us.

may be unable to consummate a business combination if a target business requires that we have cash in excess of the minimum amount

we are required to have at closing and public shareholders may have to remain shareholders of our company and wait until our liquidation

to receive a pro rata share of the trust account or attempt to sell their shares in the open market.

potential target may make it a closing condition to our business combination that we have a certain amount of cash in excess of

the $5,000,001 of net tangible assets we are required to have pursuant to our organizational documents available at the time of

If the number of our shareholders electing to exercise their conversion rights or sell their shares to us in a tender

offer has the effect of reducing the amount of money available to us to consummate a business combination below such minimum amount

required by the target business and we are not able to locate an alternative source of funding, we will not be able to consummate

such business combination and we may not be able to locate another suitable target within the applicable time period, if at all.

In that case, public shareholders may have to remain shareholders of our company and wait until February 20, 2020 (or until June

20, 2020 if we extend the period of time to consummate a business combination through issuance of the potential extension warrants,

as described in more detail herein) in order to be able to receive a pro rata portion of the trust account, or

attempt to sell their shares in the open market prior to such time, in which case they may receive less than a pro rata share

of the trust account for their shares.

public shareholders may not be afforded an opportunity to vote on our proposed business combination, which means we may consummate

our initial business combination even though a majority of our public shareholders do not support such a combination.

intend to hold a shareholder vote before we consummate our initial business combination.

However, if a shareholder vote is not

required, for business or legal reasons, we may conduct conversions via a tender offer and not offer our shareholders the opportunity

to vote on a proposed business combination.

In determining whether to seek shareholder approval on a proposed business combination,

we will consider factors such as timing and cost and other factors that we may deem material at the time of entry into a definitive

Accordingly, we may consummate our initial business combination even if holders of a majority of our public shares

do not approve of the business combination.

connection with any meeting held to approve an initial business combination, we will offer each public shareholder the option

to vote in favor of a proposed business combination and still seek conversion of his, her or its public shares, which may make

it more likely that we will consummate a business combination.

connection with any meeting held to approve an initial business combination, we will offer each public shareholder the right to

have his, her or its public shares converted to cash (subject to the limitations described elsewhere in this report) regardless

of whether such shareholder votes for or against such proposed business combination.

Furthermore, we will consummate our initial

business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and a majority of the issued

and outstanding shares voted are voted in favor of the business combination.

Accordingly, public shareholders owning shares sold

in our initial public offering may exercise their conversion rights and we could still consummate a proposed business combination

so long as a majority of shares voted at the meeting are voted in favor of the proposed business combination.

This is different

than other similarly structured blank check companies where shareholders are offered the right to convert their shares only when

they vote against a proposed business combination.

This is also different than other similarly structured blank check companies

where there is a specific number of shares sold in the offering which must not exercise conversion rights for the company to complete

a business combination.

The lack of such a threshold and the ability to seek conversion while voting in favor of a proposed business

combination may make it more likely that we will consummate our initial business combination.

connection with any meeting called to approve a proposed initial business combination, we may require shareholders who wish to

convert their public shares to comply with specific requirements for conversion that may make it more difficult for them to exercise

their conversion rights prior to the deadline for exercising their rights.

connection with any meeting called to approve a proposed initial business combination, each public shareholder will have the right,

regardless of whether it is voting for or against such proposed business combination, to demand that we convert its public shares

into a share of the trust account.

Such conversion will be effectuated under Cayman Islands law as a redemption of the shares,

with the redemption price to be paid being the applicable pro rata portion of the monies held in the trust account.

We may require public shareholders who wish to convert their public shares in connection with a proposed business combination

to either tender their certificates to our transfer agent or to deliver their shares to the transfer agent electronically using

the Depository Trust Company’s (“DTC”) DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s

option, at any time at or prior to the vote taken at the shareholder meeting relating to such business combination.

obtain a physical share certificate, a shareholder’s broker and/or clearing broker, DTC and our transfer agent will need

to act to facilitate this request.

It is our understanding that shareholders should generally allot at least two weeks to obtain

physical certificates from the transfer agent.

However, because we do not have any control over this process or over the brokers

or DTC, it may take significantly longer than two weeks to obtain a physical share certificate.

It is also our understanding that

it takes a short time to deliver shares through the DWAC System.

However, this too may not be the case.

Accordingly, if it takes

longer than we anticipate for shareholders to deliver their shares, shareholders who wish to convert may be unable to meet the

deadline for exercising their conversion rights and thus may be unable to convert their shares.

may not have sufficient time to comply with the delivery requirements for conversion.

to our amended and restated memorandum and articles of association, we are required to give a minimum of only ten days’

notice for each general meeting.

As a result, if we require public shareholders who wish to convert their public shares into the

right to receive a pro rata portion of the funds in the trust account to comply with specific delivery requirements

for conversion, holders may not have sufficient time to receive the notice and deliver their shares for conversion.

investors may not be able to exercise their conversion rights and may be forced to retain our securities when they otherwise would

we require public shareholders who wish to convert their public shares to comply with the delivery requirements for conversion,

such converting shareholders may be unable to sell their securities when they wish to in the event that the proposed business

combination is not approved.

we require public shareholders who wish to convert their public shares to comply with specific delivery requirements for conversion

described above and such proposed business combination is not consummated, we will promptly return such certificates to the tendering

public shareholders.

Accordingly, investors who attempted to convert their shares in such a circumstance will be unable to sell

their securities after the failed acquisition until we have returned their securities to them.

The market price for our shares

may decline during this time and you may not be able to sell your securities when you wish to, even while other shareholders that

did not seek conversion may be able to sell their securities.

we seek shareholder approval of our initial business combination and we do not conduct redemptions pursuant to the tender offer

rules, a shareholder or a “group”

of shareholders holding a substantial portion of our ordinary shares may influence

our ability to complete our business combination.

other blank check companies, if we seek shareholder approval of our initial business combination and we do not conduct redemptions

in connection with our initial business combination pursuant to the tender offer rules, our amended and restated memorandum and

articles of incorporation will not provide that a public shareholder, together with any affiliate of such shareholder or any other

person with whom such shareholder is acting in concert or as a “group”

(as defined under Section 13 of the Exchange

Act), holding in excess of a certain percentage of shares offered in our initial public offering will be restricted from seeking

redemption rights with respect to any shares they hold in excess of such percentage.

The ability of any such shareholder to redeem

all their shares will increase their influence over our ability to complete our business combination and could make it more difficult

for us to complete such business combination.

of our limited resources and structure, other companies may have a competitive advantage and we may not be able to consummate

an attractive business combination.

expect to encounter intense competition from entities other than blank check companies having a business objective similar to

ours, including venture capital funds, leveraged buyout funds and operating businesses competing for acquisitions.

Many of these

entities are well established and have extensive experience in identifying and effecting business combinations directly or through

Many of these competitors possess greater technical, human and other resources than we do and our financial resources

will be relatively limited when contrasted with those of many of these competitors.

While we believe that there are numerous potential

target businesses that we could acquire with the net proceeds of our initial public offering, our ability to compete in acquiring

certain sizable target businesses will be limited by our available financial resources.

This inherent competitive limitation gives

others an advantage in pursuing the acquisition of certain target businesses.

Furthermore, seeking shareholder approval of a business

combination may delay or prevent the consummation of a transaction, a risk a target business may not be willing to accept.

Additionally,

our outstanding warrants and rights, and the future dilution they potentially represent, may not be viewed favorably by certain

target businesses.

Any of the foregoing may place us at a competitive disadvantage in successfully negotiating a business combination.

initial shareholders control a substantial interest in us and thus may influence certain actions requiring a shareholder vote.

initial shareholders collectively own approximately 19.9% of our issued and outstanding ordinary shares.

None of our officers,

directors, initial shareholders or their affiliates has indicated any intention to purchase any units or ordinary shares from

persons in the open market or in private transactions.

However, our officers, directors, initial shareholders or their affiliates

could determine in the future to make such purchases in the open market or in private transactions, to the extent permitted by

law, in order to assist us in consummating our initial business combination.

In connection with any vote for a proposed business

combination, all of our initial shareholders, as well as all of our officers and directors, have agreed to vote the ordinary shares

owned by them immediately before our initial public offering as well as any ordinary shares acquired in the aftermarket in favor

of such proposed business combination.

is no requirement under the Companies Law for us to hold annual or general meetings to elect directors.

Accordingly, shareholders

would not have the right to such a meeting or election of directors, unless the holders of not less than 10% in par value capital

of our company request such a meeting.

As a result, it is unlikely that there will be an annual general meeting to elect new directors

prior to the consummation of a business combination, in which case all of the current directors will continue in office until

at least the consummation of the business combination.

Accordingly, you may not be able to exercise your voting rights until February

20, 2020 (or until June 20, 2020 if we extend the period of time to consummate a business combination through issuance of the

potential extension warrants, as described in more detail herein).

If there is an annual general meeting, as a consequence of

our “staggered”

board of directors, only a minority of the board of directors will be considered for election and

our initial shareholders, because of their ownership position, will have considerable influence regarding the outcome.

our initial shareholders will continue to exert control at least until the consummation of a business combination.

outstanding warrants and rights may have an adverse effect on the market price of our ordinary shares and make it more difficult

to effect a business combination.

issued warrants that will result in the issuance of up to 12,500,000 ordinary shares as part of the units offered in our initial

public offering and private warrants that will result in the issuance of an additional 6,500,000 ordinary shares.

issue to holders of our public shares, by way of a dividend, potential extension warrants, which may result in the issuance of

an additional 12,500,000 ordinary shares.

The potential for the issuance of a substantial number of additional shares upon exercise

of the warrants and conversion of the rights could make us a less attractive acquisition vehicle in the eyes of a target business.

Such securities, when converted, will increase the number of issued and outstanding ordinary shares and reduce the value of the

shares issued to complete the business combination.

Accordingly, our warrants and rights may make it more difficult to effectuate

a business combination or increase the cost of acquiring the target business.

Additionally, the sale, or even the possibility

of sale, of the shares underlying the warrants and rights could have an adverse effect on the market price for our securities

or on our ability to obtain future financing.

If and to the extent these warrants are exercised, you may experience dilution to

your holdings.

growth rate will be the same as in the past.

In addition, we may in the future introduce new services or significantly expand

our existing services, including those that currently are of relatively small scale or with which we have little or no prior development

or operating experience.

If these new or enhanced services fail to engage users and customers, our business and operating results

may suffer as a result.

We cannot assure you that we will be able to recoup our investments in introducing these new services

or enhancing existing smaller business lines, and we may experience significant loss and impairment of asset value due to such

Furthermore, as a technology-based entertainment company, we frequently introduce innovative products and services to

our users and advertising customers in order to capture new market opportunities.

However, we cannot assure you that our products

and services will be well received by our users and advertising customers.

If our existing or new products and services are not

well received by our users and customers, we may suffer damages to our brand image and may not be able to maintain or expand our

user and customer base, which in turn may have a material and adverse effect on our business, financial condition and results

of operations.

You should consider our prospects in light of the risks and uncertainties fast-growing companies with limited operating

histories in a fast evolving industry.

may not be able to manage our growth effectively.

have experienced rapid growth since we launched our services in 2016.

To manage the further expansion of our business and the

growth of our operations and personnel, we need to continuously expand and enhance our infrastructure and technology, and improve

our operational and financial systems, procedures, compliance and controls.

We also need to expand, train and manage our growing

employee base.

In addition, our management will be required to maintain and expand our relationships with distributors, advertising

customers, and other third parties.

We cannot assure you that our current infrastructure, systems, procedures and controls will

be adequate to support our expanding operations.

If we fail to manage our expansion effectively, our business, financial condition,

results of operations and prospects may be materially and adversely affected.

we are unable to offer branded products at attractive prices to meet customer needs and preferences on our e-commerce platform,

or if our reputation for selling authentic, high-quality products suffers, we may lose customers and our business, financial condition

and results of operations may be materially and adversely affected.

future growth on our e-commerce platform partially depends on our ability to continue to attract new customers as well as to increase

the spending and repeat purchase rate of existing customers.

Constantly changing consumer preferences have historically affected,

and will continue to affect, the online retail industry.

Consequently, we must stay abreast of emerging lifestyle and consumer

preferences and anticipate product trends that will appeal to existing and potential customers.

we implement our strategy to offer a personalized web-interface focusing on deep curation and targeted offerings desired by our

customers, we expect to face additional challenges in the selection of products and services.

We are focused on offering only

authentic products on our e-commerce platform, as perception by our customers or prospective customers that any of our products

are not authentic, or are lacking in quality, could cause our reputation to suffer.

This is particularly important for cosmetics

products, which we expect to account for an increasing proportion of our revenues.

While our representatives generally check the

products that are offered for sale on our e-commerce platform to confirm their authenticity and quality, there can be no assurance

that our suppliers have provided us with authentic products or that all products that we sell are of the quality expected by consumers.

If our customers cannot find desired products within our product portfolio at attractive prices, or if our reputation for selling

authentic, high-quality products suffers, our customers may lose interest in our e-Mall and thus may visit our e-commerce platform

less frequently or even stop visiting it altogether, which in turn, may materially and adversely affect our business, financial

condition and results of operations.

behavior on mobile devices is rapidly evolving, and if we fail to successfully adapt to these changes, our competitiveness and

market position may suffer.

sellers and other participants are increasingly using mobile devices in China for a wide range of purposes, including for e-commerce.

While a significant and growing portion of participants access our e-commerce platform through mobile devices, this area is developing

rapidly and we may not be able to continue to increase the level of mobile access to, or transactions on, our e-commerce platform

by users of mobile devices.

The variety of technical and other configurations across different mobile devices and platforms increases

the challenges associated with this environment.

our ability to successfully expand the use of mobile devices to access our e-commerce

platform is affected by the following factors:

ability to continue to provide compelling video content on our e-commerce platform and tools in a multiple mobile device environment;

ability to successfully deploy apps on popular mobile operating systems;

attractiveness of alternative platforms.

we are unable to attract significant numbers of new mobile buyers and increase levels of mobile engagement, our ability to maintain

or grow our business would be materially and adversely affected.

business prospects and financial results may be impacted by our relationship with third-party platforms.

addition to our own e-commerce platform, we also distribute video content through third-party platforms.

However, there can be

no assurance that our arrangements with those platforms will be extended or renewed after their respective expiration or that

we will be able to extend or renew such arrangements on terms and conditions favorable to us.

In addition, if any such third-party

platforms breach their obligations under any of the agreements entered into with us or refuses to extend or renew such agreements

when their term expires, and we cannot find a suitable replacement on a timely basis, or at all, we may suffer significant losses

to our user base and revenue streams, or lose the opportunity to expand our business through such platforms.

Disputes may arise

between us and third-party platforms with which we have used in the past that may adversely affect the relationship with such

platforms which in turn may have a material and adverse effect on our business, financial condition and results of operations.

face risks, such as unforeseen costs and potential liability in connection with content we produce, license and/or distribute

through third-party platforms and our e-commerce platform.

a producer, licensor and distributor of content, we face potential liability for negligence, copyright and trademark infringement,

or other claims based on the content that we produce, license, provide and/or distribute.

We also may face potential liability

for content used in promoting our service, including marketing materials and features on our platform such as user reviews.

are responsible for the production costs and other expenses of our original content.

Litigation to defend these claims could be

costly and the expenses and damages arising from any liability or unforeseen production risks could harm our business, financial

condition and results of operations.

We may not be indemnified against claims or costs of these types and we may not have insurance

coverage for these types of claims.

and other content produced by us or displayed on our e-commerce platform may be found objectionable by PRC regulatory authorities

and may subject us to penalties and other administrative actions.

are subject to PRC regulations governing internet access and the distribution of videos and other forms of information over the

Under these regulations, internet content providers and internet publishers are prohibited from posting or displaying

over the internet any content that, among other things, violates PRC laws and regulations, impairs the national dignity of China

or the public interest, or is obscene, superstitious, frightening, gruesome, offensive, fraudulent or defamatory.

as an internet video streaming producer, we are not allowed to (i) produce or disseminate programs that distort, parody or vilify

classic literary works;

(ii) re-edit, re-dub or re-caption the subtitles of classic literary works, radio and television programs,

and network-based original audio-video programs, (iii) intercept program segments and splice them into new programs;

or (iv) disseminate

edited pieces of works that distort the originals.

Failure to comply with these requirements may result in monetary penalties,

revocation of licenses to provide internet content or other licenses, suspension of the concerned platforms and reputational harm.

In addition, these laws and regulations are subject to interpretation by the relevant authorities, and it may not be possible

to determine in all cases the types of content that could cause us to be held liable as an internet content provider.

the extent that PRC regulatory authorities find any content produced by us or displayed on our e-commerce platform objectionable,

they may require us to limit or eliminate the dissemination of such content on our platform in the form of take-down orders or

operate in a rapidly evolving industry.

If we fail to keep up with the technological developments and users’

changing requirements,

our business, financial condition, results of operations and prospects may be materially and adversely affected.

internet video streaming industry is rapidly evolving and subject to continuous technological changes.

our success will depend

on our ability to keep up with the changes in technology and user behavior resulting from the technological developments.

make our services available across a variety of mobile operating systems and devices, we are dependent on the interoperability

of our services with popular mobile devices and mobile operating systems that we do not control, such as Android and iOS.

changes in such mobile operating systems or devices that degrade the functionality of our services or give preferential treatment

to competitive services could adversely affect usage of our services.

Further, if the number of mobile operating systems and devices

increases, which is typically seen in a dynamic and fragmented mobile services market such as China, we will likely incur additional

costs and expenses associated with developing tools and software necessary for access to our e-commerce platform by these devices

If we fail to adapt our products and services to such changes in an effective and timely manner, we may suffer from

decreased user traffic, which may result in a reduced user base.

Furthermore, changes in technologies may require substantial

capital expenditures in product development as well as in modification of products, services or infrastructure.

We may not execute

our business strategies successfully due to a variety of reasons such as technical hurdles, misunderstanding or erroneous prediction

of market demand or lack of necessary resources.

Failure to keep up with technological development may result in our products

and services being less attractive, which, in turn, may materially and adversely affect our business, results of operations and

may not be able to adequately protect our intellectual property rights, and any failure to protect our intellectual property rights

could adversely affect our revenues and competitive position.

believe that trademarks, trade secrets, copyrights, and other intellectual property we use are critical to our business.

on a combination of trademark, copyright and trade secret protection laws in China and other jurisdictions, as well as confidentiality

procedures and contractual provisions to protect our intellectual property and our brand.

Protection of intellectual property

rights in China may not be as effective as in the United States or other jurisdictions, and as a result, we may not be able to

adequately protect our intellectual property rights, which could adversely affect our revenues and competitive position.

any unauthorized use of our intellectual property by third parties may adversely affect our revenues and our reputation.

we may have difficulty addressing the threats to our business associated with piracy of our copyrighted content, particularly

our original content.

our content and streaming services may be potentially subject to unauthorized consumer copying and illegal

digital dissemination without an economic return to us.

policing unauthorized use of proprietary technology is difficult and expensive, and we may need to resort to litigation to enforce

or defend intellectual property or to determine the enforceability, scope and validity of our proprietary rights or those of others.

Such litigation and an adverse determination in any such litigation could result in substantial costs and diversion of resources

and management attention.

business generates and processes a large amount of data, and the improper use or disclosure of such data could harm our reputation

as well as have a material adverse effect on our business and prospects.

e-commerce platform generates and processes a large quantity of personal, transaction, demographic and behavioral data.

risks inherent in handling large volumes of data and in protecting the security of such data.

In particular, we face a number

of challenges relating to data from transactions and other activities on our platform, including:

the data in and hosted on our system, including against attacks on our system by outside parties or fraudulent behavior by our

concerns related to privacy and sharing, safety, security and other factors;

with applicable laws, rules and regulations relating to the collection, use, disclosure or security of personal information, including

any requests from regulatory and government authorities relating to such data.

systems failure or security breach or lapse that results in the release of user data could harm our reputation and brand and,

consequently, our business, in addition to exposing us to potential legal liability.

to maintain or improve our technology infrastructure could harm our business and prospects.

new software and upgrading our online infrastructure requires significant investments of time and resources, including adding

new hardware, updating software and recruiting and training new engineering personnel.

Maintaining and improving our technology

infrastructure require significant levels of investment.

Adverse consequences could include unanticipated system disruptions,

slower response times, impaired quality of buyers’

and sellers’

experiences and delays in reporting accurate operating

and financial information.

In addition, much of the software and interfaces we use are internally developed and proprietary technology.

If we experience problems with the functionality and effectiveness of our software, or are unable to maintain and constantly improve

our technology infrastructure to handle our business needs, our business, financial condition, results of operation and prospects,

as well as our reputation, could be materially and adversely affected.

are subject to payment processing risk.

e-commerce customers pay for their services using a variety of different online payment methods.

We rely on third parties to process

such payments.

Acceptance and processing of these payment methods are subject to certain rules and regulations and require payment

of interchange and other fees.

To the extent there are increases in payment processing fees, material changes in the payment ecosystem,

such as delays in receiving payments from payment processors and/or changes to rules or regulations concerning payment processing,

our revenues, operating expenses and results of operations could be adversely impacted.

successful operation of our business depends upon the performance and reliability of the Internet infrastructure in China.

than the production of television shows that are transmitted via satellite television in China, our business depends on the performance

and reliability of the Internet infrastructure in China.

Almost all access to the Internet is maintained through state-owned telecommunications

operators under the administrative control and regulatory supervision of the Ministry of Industry and Information Technology of

In addition, the national networks in China are connected to the Internet through state-owned international gateways, which

are the only channels through which a domestic user can connect to the Internet outside of China.

We may not have access to alternative

networks in the event of disruptions, failures or other problems with China’s Internet infrastructure.

In addition, the

Internet infrastructure in China may not support the demands associated with continued growth in Internet usage.

breaches and attacks against our internal systems and network, and any potential resulting breach or failure to otherwise protect

confidential and proprietary information, could damage our reputation and negatively impact our business, as well as materially

and adversely affect our financial condition and results of operations.

we have employed resources to develop security measures against unauthorized access to our systems and networks, our cybersecurity

measures may not successfully detect or prevent all unauthorized attempts to access the data on our network or compromise and

disable our systems.

Unauthorized access to our network and systems may result in the misappropriation of information or data,

deletion or modification of user information, or a denial-of-service or other interruption to our business operations.

As techniques

used to obtain unauthorized access to or sabotage systems change frequently and may not be known until launched against us or

our third-party service providers, we may be unable to anticipate, or implement adequate measures to protect against these attacks.

If we are unable to avert these attacks and security breaches, we could be subject to significant legal and financial liability,

our reputation would be harmed and we could sustain substantial revenue loss from user dissatisfaction.

We may not have the resources

or technical sophistication to anticipate or prevent rapidly evolving types of cyber-attacks.

Actual or anticipated attacks and

risks may cause us to incur significantly higher costs, including costs to deploy additional personnel and network protection

technologies, train employees, and engage third-party experts and consultants.

Cybersecurity breaches would not only harm our

reputation and business, but also could materially decrease our revenue and net income.

rely upon our partners to make our service available through Internet Protocol Television (IPTV).

In the IPTV video streaming

market, only a small number of qualified license holders can provide internet audio and visual program services to the TV terminal

users via IPTV, set-top boxes and other electronic products.

Most of those license holders are radio or TV stations.

Private companies

that wish to operate such business need to cooperate with those license holders to legally provide relevant services.

not successful in maintaining existing or creating new relationships, or if we encounter technological, content licensing, regulatory

or other impediments to delivering our streaming content to our members via these devices, our ability to grow our business may

be adversely impacted.

or failure of our IT systems could impair our users’

online entertainment experience and adversely affect our reputation.

ability to provide users with a high-quality online entertainment experience on our e-commerce platform depends on the continuous

and reliable operation of our IT systems.

We cannot assure you that we will be able to procure sufficient bandwidth in a timely

manner or on acceptable terms or at all.

Failure to do so may significantly impair user experience on our platform and decrease

the overall effectiveness of our platform to both users and advertisers.

we experience frequent or persistent service disruptions, whether caused by failures of our own systems or those of third-party

service providers, our users’

experience may be negatively affected, which in turn, may have a material and adverse effect

on our reputation.

We cannot assure you that we will be successful in minimizing the frequency or duration of service interruptions.

programming errors could adversely affect our user experience and market acceptance of our video content, which may materially

and adversely affect our business, financial condition and results of operations.

content produced by us or displayed on our e-commerce platform may contain programming errors that may only become apparent after

We generally have been able to resolve such programming errors in a timely manner.

However, we cannot assure you

that we will be able to detect and resolve all these programming errors effectively.

Undetected audio or video programming errors

or defects may adversely affect user experience which in turn may have a material and adverse effect on our business, financial

condition and results of operation.

revenue and net income may be materially and adversely affected by any economic slowdown in China and indirectly by trade disputes

between the United States and China that may contribute to uncertainties in economic outlook.

success of our business depends on consumers spending from e-commerce, advertising fees, production costs and copyright payments

from third parties which may be affected by consumer confidence and uncertainties in the outlook for economic growth within China.

We derive substantially all of our revenue from China.

As a result, our revenue and net income are impacted to a significant extent

by economic conditions in China and globally, as well as economic conditions specific to online and mobile commerce and advertising

The PRC government has in recent years implemented a number of measures to control the rate of economic growth, including

by raising and lowering of interest rates and adjusting deposit reserve ratios for commercial banks as well as by implementing

other measures designed to tighten or loosen credit and liquidity.

In the past, these measures have contributed to a slowdown

of the PRC economy and although recently the PRC has taken steps to reduce interest rates and adjusting deposit reserve ratios

to increase the availability of credit in response to a weakening economy cause, in part, by the continuing trade dispute with

the United States, no assurances can be given that the PRC’s efforts will result in more certainty in domestic economic

outlook or an increase in consumer confidence.

Any continuing or worsening slowdown could significantly reduce domestic commerce

in China, including through the Internet generally and within our ecosystem.

An economic downturn, whether actual or perceived,

a further decrease in economic growth rates or an otherwise uncertain economic outlook in China or any other market in which we

may operate could have a material adverse effect on our business, financial condition and results of operations.

face risks related to natural disasters, health epidemics and other outbreaks, which could significantly disrupt our operations.

are vulnerable to natural disasters and other calamities.

Fire, floods, typhoons, earthquakes, power loss, telecommunications

failures, break-ins, war, riots, terrorist attacks or similar events may give rise to server interruptions, breakdowns, system

failures, technology platform failures or internet failures, which could cause the loss or corruption of data or malfunctions

of software or hardware as well as adversely affect our ability to produce video content or provide products and services on our

e-commerce platform.

business operations could be disrupted if any of our employees are suspected of having Ebola virus disease, H1N1 flu, H7N9 flu,

avian flu, SARS or other epidemic, since we could require our employees to be quarantined and/or our offices to be disinfected.

In addition, our business, financial condition or results of operations could be materially and adversely affected to the extent

that any of these epidemics harms the Chinese economy in general.

quarterly operating results may fluctuate, which makes our results of operations difficult to predict and may cause our quarterly

results of operations to fall short of expectations.

quarterly operating results have fluctuated in the past and may continue to fluctuate depending upon a number of factors, many

of which are out of our control.

Our operating results tend to be seasonal.

As a result, comparing our operating results on a

period-to-period basis may not be meaningful.

For example, online user numbers tend to be lower during school holidays and certain

parts of the school year, and advertising revenues tend to be lower during the Chinese New Year season, which may negatively affects

our cash flow for those periods.

require highly qualified personnel to generate high quality video content and if we are unable to hire or retain qualified personnel,

we may not be able to grow effectively and our business, financial condition, and results of operation may be materially and adversely

currently rely on our in-house team of employees to generate creative ideas for original content and to supervise the original

content origination and production process and intends to continue to invest our human and capital resources in such content production.

We face fierce competition for qualified personnel in a limited pool of high-quality creative talent.

If we are not able to compete

effectively for highly qualified personnel or attract and retain top talent at reasonable costs, our original content production

capabilities would be materially and adversely impacted.

If we are unable to offer popular original content that addresses our

user’s tastes and preferences in a cost effective manner, we may suffer a reduction in user traffic and our business, financial

condition and results of operations may be materially and adversely affected.

future success also depends upon our ability to attract and retain highly qualified management personnel.

Expansion of our business

and our management will require additional managers and employees with industry experience, and our success will be highly dependent

on our ability to attract and retain skilled management personnel and other employees.

We may not be able to attract or retain

highly qualified personnel.

Competition for skilled management personnel is significant in China.

This competition may make it

more difficult and expensive to attract, hire and retain qualified managers and employees.

controlling shareholder will have substantial influence over us.

of March 20, 2020, Happy Starlight Limited, which is controlled by Mr.

Bing Zhang, our chairman, beneficially owns 15,219,963

of our ordinary shares, or 30.38%.

Zhang will have substantial influence over our business, including decisions regarding

mergers, consolidations, the sale of all or substantially all of our assets, election of directors, declaration of dividends and

other significant corporate actions.

In addition, this concentration of ownership may discourage, delay or prevent a change in

control which could deprive you of an opportunity to receive a premium for your ordinary shares as part of a sale of our company.

do not foresee paying cash dividends in the foreseeable future and, as a result, our investors’

sole source of gain will

depend on capital appreciation, if any.

do not plan to declare or pay any cash dividends on our shares of ordinary shares in the foreseeable future and currently intends

to retain any future earnings for funding growth.

As a result, investors should not rely on an investment in our securities if

they require the investment to produce dividend income.

Capital appreciation, if any, of our shares may be our investors’

sole source of gain for the foreseeable future.

Star Group’s bank accounts are in China and are not insured or protected against loss.

Star Group maintains its cash primarily with major banks in China which is primarily owned by the Chinese government.

Group’s cash accounts are not insured or otherwise protected.

Should any bank or trust company holding our cash deposits

become insolvent, or if we are otherwise unable to withdraw funds, we could lose the cash on deposit with that particular bank

or trust company or have our account frozen.

failure to protect our intellectual property rights could have a negative impact on our business.

believe our brand, trade names, trademarks and other intellectual property are critical to our success.

The success of our business

depends substantially upon our continued ability to use our brand, trade names and trademarks to increase brand awareness and

to further develop our brand.

The unauthorized reproduction of our trade names or trademarks could diminish the value of our brand

and our market acceptance, competitive advantages or goodwill.

In addition, our proprietary information, which has not been patented

or otherwise registered as our property, is a component of our competitive advantage and our growth strategy.

and preventing the unauthorized use of our intellectual property is difficult.

The measures we take to protect our brand, trade

names, trademarks and other intellectual property rights may not be adequate to prevent their unauthorized use by third parties.

In addition, the application of laws governing intellectual property rights in China and abroad is uncertain and evolving, and

could involve substantial risks to us.

To our knowledge, the relevant authorities in China historically have not protected intellectual

property rights to the same extent as the United States.

If we are unable to adequately protect our brand, trade names, trademarks

and other intellectual property rights, we may lose these rights and our business may suffer materially.

Further, unauthorized

use of our brands, trade names or trademarks could cause brand confusion among advertisers and harm our reputation as a provider

of high quality and comprehensive advertising services.

If our brand recognition decreases, we may lose advertisers and fail in

our expansion strategies, and our business, results of operations, financial condition and prospects could be materially and adversely

may be named as a defendant in litigation, or may be joined as a defendant in litigation brought against our customers by third

parties, our customers’

competitors, governmental or regulatory authorities or consumers, which could result in judgments

against us and materially disrupt our business.

These actions could involve claims alleging, among other things, that:

● advertising

claims made with respect to our customers’

products or services are false, deceptive or misleading;

customers’

products are defective or injurious and may be harmful to others;

communicating or advertising materials created for our customers infringe on the proprietary rights of third parties.

damages, costs, expenses and attorneys’

fees arising from any of these claims could have a material and adverse affect on

our business, financial condition, results of operations, and prospects to the extent that we are not adequately indemnified by

our customers.

In any case, our reputation may be negatively affected by these allegations.

rely on computer software and hardware systems in our operations, the failure of which could adversely affect our business, financial

condition, and results of operations.

are dependent upon our computer software and hardware systems in designing our advertisements and keeping important operational

and market information.

In addition, we rely on our computer hardware for the storage, delivery and transmission of data.

system failure that causes interruptions to the input, retrieval and transmission of data or increase in service time could disrupt

our normal operations.

Although we have a disaster recovery plan that is designed to address the failures of our computer software

and hardware systems, we may not be able to effectively carry out this disaster recovery plan or restore our operations within

a sufficiently short time frame to avoid business disruptions.

Any failure in our computer software or hardware systems could

decrease our revenues and harm our relationships with advertisers, television channels and other media companies, which in turn

could have a material adverse effect on our business, results of operations and financial condition.

do not maintain business liability or disruption, litigation or property insurance and any business liability or disruption, litigation

or property damage we experience may result in substantial costs to us and the diversion of our resources.

insurance industry in China is still at an early stage of development.

Insurance companies in China offer limited business disruption,

business liability or similar business insurance products.

We have determined that the risks of disruption or liability from our

business, the potential loss or damage to our property, including our facilities, equipment and office furniture, the cost of

obtaining insurance coverage for these risks and the difficulties associated with obtaining such insurance on commercially reasonable

terms, make it impractical for us to have obtained such insurance on terms and conditions that are commercially reasonable.

a result, we did not purchase any business liability, disruption, litigation or property insurance coverage for our operations

Any occurrence of an uninsured loss or damage to our property or litigation or business disruption may result in substantial

costs to us and the diversion of our resources, which could have an adverse effect on our operating results.

Related to our Corporate Structure

PRC government may determine that the VIE Contracts are not in compliance with applicable PRC laws, rules and regulations.

To comply with applicable

PRC laws, rules and regulations, we conduct our operations in the PRC through the VIE Contracts, a series of contractual arrangements

entered into among (i) WFOE, (ii) Glory Star and certain shareholders of Glory Star, (iii) Xing Cui Can and our shareholders, and

(iv) Horgos and our shareholder, which consist of the Business Cooperation Agreement, Exclusive Option Agreement, Proxy Agreement

and Power of Attorney, and Share Pledge Agreement.

As a result of these VIE Contracts, Glory Star manages and operates our value-added

telecommunication services and certain other business through the WFOE, Xing Cui Can and Horgos pursuant to the rights it holds

under the VIE Contracts.

A majority of the economic benefit and almost all of the risks arising from the operations of Xing Cui

Can and Horgos are ultimately enjoyed and undertaken by Glory Star under these agreements.

are risks involved with the operation of our business in reliance on the VIE Contracts, including the risk that the VIE Contracts

may be determined by PRC regulators or courts to be unenforceable.

Although we believe that we are in compliance with current

PRC regulations in the execution and implementation of the VIE Contracts, we cannot assure you the PRC government would agree

that the VIE Contracts fully comply with existing PRC policies or with policies that may be adopted in the future.

regulations governing the validity of these VIE Contracts are uncertain.

If the VIE Contracts were for any reason determined to

be in breach of any existing or future PRC laws or regulations, the relevant regulatory authorities would have broad discretion

in dealing with such breach, including:

economic penalties;

● discounting

or restricting the operations of Horgos and Xing Cui Can;

conditions or requirements in respect of the VIE Contracts with which Horgos, Xing Cui Can or WFOE may not be able to comply;

us to restructure the relevant ownership structure or operations;

other regulatory or enforcement actions that could adversely affect our business;

the business licenses and/or the licenses or certificates of Horgos, Xing Cui Can or WFOE, and/or voiding the VIE Contracts.

of these actions would adversely affect our ability to manage, operate and gain the financial benefits of Horgos and Xing Cui

Can, which would have a material adverse impact on our business, financial condition and results of operations.

ability to manage and operate Horgos and Xing Cui Can under the VIE Contracts may not be as effective as direct ownership.

conduct our advertising operation, e-commerce and certain other business in the PRC and generates virtually all of our revenues

for our business through the VIE Contracts.

Our plans for future growth are based substantially on growing the operations of Horgos

and Xing Cui Can.

However, the VIE Contracts may not be as effective in providing us with control over Horgos and Xing Cui Can

as direct ownership.

Under the current VIE Contracts, if Horgos, Xing Cui Can or their shareholders fail to perform their obligations

under these contractual arrangements, we may have to incur substantial costs and resources to enforce such arrangements, and rely

on legal remedies under PRC law, which it cannot be sure would be effective.

Therefore, if we are unable to effectively control

Horgos and Xing Cui Can, it may have an adverse effect on our ability to achieve our business objectives and grow our revenues.

the VIE Contracts are governed by PRC law, we would be required to rely on PRC law to enforce our rights and remedies under them;

PRC law may not provide us with the same rights and remedies as are available in contractual disputes governed by the law of other

jurisdictions.

VIE Contracts are governed by PRC law and provide for the resolution of disputes through arbitral proceedings.

If Horgos, Xing

Cui Can or their shareholders fail to perform their obligations under the VIE Contracts, we would be required to resort to legal

remedies available under PRC law, including seeking specific performance or injunctive relief, or claiming damages.

be sure that such remedies would provide us with effective means of causing Horgos or Xing Cui Can to meet their obligations,

or recovering any losses or damages as a result of non-performance.

Further, the legal environment in the PRC is not as developed

as in some other jurisdictions.

Uncertainties in the application of various laws, rules, regulations or policies in the PRC legal

system could limit our liability to enforce the VIE Contracts and protect our interests.

payment arrangement under the VIE Contracts may be challenged by the PRC tax authorities.

generate our revenues through the payments we receive pursuant to the VIE Contracts.

We could face adverse tax consequences if

the PRC tax authorities determine that the VIE Contracts were not entered into based on arm’s length negotiations.

PRC tax authorities may adjust our income and expenses for PRC tax purposes, which could result in our being subject to higher

tax liability, or cause other adverse financial consequences.

According to the PRC Tax Administration and Collection Law, (中华人民共和国税收征收管理法),

and Implementation Regulations for the Law of the PRC Tax Administration and Collection Law 《中华人民共和国税收征收管理法实施细则(2016修订),

in the case of a transfer pricing related adjustment, the statute of limitation is three years normally and 10 years in special

rely on the approval certificates and business license held by us for our advertising operation, e-commerce and certain other

business and any deterioration of the relationship between Horgos and Xing Cui Can could materially and adversely affect our business

operate our advertising operation, e-commerce and certain other business in the PRC on the basis of the approval certificates,

business license and other requisite licenses held by us.

There is no assurance that we will be able to renew our licenses or

certificates when their terms expire with substantially similar terms as the ones it currently holds.

our relationship with Horgos and Xing Cui Can is governed by the VIE Contracts, which is intended to provide us with effective

control over the business operations of Horgos and Xing Cui Can.

However, the VIE Contracts may not be effective in providing

control over the application for and maintenance of the licenses required for our business operations.

If we violate the VIE Contracts,

go bankrupt, suffer from difficulties in our business or otherwise become unable to perform our obligations under the VIE Contracts

and, as a result, our operations, reputations and business could be severely harmed.

the WFOE exercises the purchase option it holds over the share capital of Horgos or Xing Cui Can pursuant to the Exclusive Option

Agreement, the payment of the purchase price could materially and adversely affect our financial position.

the Exclusive Option Agreement, the WFOE has the option to purchase up to 100% of the equity interest in Horgos and Xing Cui Can

at a price equivalent to the lowest price then permitted under PRC law, provided that the acquisition will not violate any PRC

laws or regulations in effect.

As Horgos and Xing Cui Can are already our contractually controlled affiliates, the WFOE’s

exercising of the options would not bring immediate benefit to it, and payment of the purchase price could adversely affect our

financial position.

Relating to Doing Business in China

face risks related to the Coronarvirus and health epidemics and other outbreaks, which could significantly disrupt our operations.

The spread of a novel strain of coronavirus

(COVID-19) around the world in the first quarter of 2020 has caused significant volatility in China and international markets.

There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact

on the China and international economies and, as such, the Company is unable to determine if it will have a material impact to

its operations.

The Company's operations may be affected

by the recent and ongoing outbreak of COVID-19 in 2019, which was declared a pandemic by the World Health Organization in March

The ultimate damage caused by the outbreak is uncertain;

however, this may have a significant adverse effect on the Company's

financial condition, operations and cash flow.

COVID-19 outbreak has caused delays in the audit of our financial statement, and if it continues to spread, it may impede our

ability to file our SEC filings in a timely manner.

to the widespread travel restrictions and government imposed quarantines to help control the spread of the Coronavirus resulting

in limited access to our staff and financial data, Glory Star was unable to timely complete its year ended December 31, 2019 audit

by its independent accountants.

If the COVID-19 outbreak continues to spread, it may impede our ability to file our SEC filings

in a timely manner.

are subject to PRC laws or regulations that govern our industry.

are subject to administrative regulatory authorities and applicable laws in the PRC to operate our business.

In order to operate

our business we are required to obtain licenses and permits by various governmental agencies.

We will not be able to operate some

of businesses if it loses our licenses and permits, which will adversely affect our business.

are subject to risks relating to the nature of China’s advertising industry, including frequent and sudden changes in advertising

nature of the advertising business in China is such that sudden changes in advertising proposals and actual advertisements are

In China, television stations, as the advertising publisher, remain responsible for the content of advertisements, and

as a result, television stations may reject or recommend changes to the content of advertisements.

We strive to minimize problems

related to work for clients by encouraging the conclusion of basic written agreements, but we are exposed to the risk of unforeseen

incidents or disputes with advertising clients.

In addition, similar to other companies in our industry in the PRC where relationships

between advertising clients within a particular industry and advertising companies are not typically exclusive, we are currently

acting for multiple clients within a single industry in a number of industries.

If this practice in China is to change in favor

of exclusive relationships and if our efforts to respond to this change are ineffective, our business, results of operations and

financial condition could be materially and adversely affected.

regulates media content extensively and it may be subject to government actions based on the advertising content it design for

advertising clients or services it provide to them.

advertising laws and regulations require advertisers, advertising operators and advertising publishers, including our businesses,

to ensure that the advertisements shall not contain any false or misleading content and their advertising activities shall be

in full compliance with applicable laws, rules and regulations.

Violation of these laws, rules or regulations may result in penalties,

including fines, confiscation of advertising fees, orders to cease dissemination of the advertisements and orders to publish an

advertisement correcting the misleading information.

In circumstances involving serious violations, the PRC government may revoke

our business license.

In addition, such non-compliance can constitute a violation of criminal law and criminal proceedings could

be brought against us as a result.

Our business includes assisting

advertising clients in designing and producing advertisements, as well as executing their advertising campaigns.

We act as agent

for our clients in dealing with television channels, or other media on whose platform our clients want to display their advertisements.

Under our agreements with television chanels or other media, we are typically responsible for the compliance with applicable laws,

rules and regulations with respect to advertising content that it provide to the media.

In addition, some of our advertising clients

provide completed advertisements for us to display on the television channels.

Although these advertisements are subject to internal

review and verification, their content may not fully comply with applicable laws, rules and regulations.

Further, for advertising

content related to special types of products and services, such as pharmaceuticals and medical procedures, pesticides and health

products, we are required to confirm that our clients have obtained requisite government approvals.

We endeavor to comply with

such requirements, including by requesting relevant documents from the advertising clients and employing qualified advertising

inspectors who are trained to review advertising content for compliance with applicable PRC laws, rules and regulations.

we cannot assure you that violations or alleged violations of the content requirements will not occur with respect to our operations.

If the relevant PRC governmental agencies determine the content of the advertisements that we represent violated any applicable

laws, rules or regulations, we could be subject to penalties, which may harm our reputation and may divert significant amounts

of our management’s time and other resources.

It may be difficult and expensive to defend against such proceedings.

our agreements with our clients normally require them to warrant the fairness, accuracy and compliance with relevant laws and regulations

of their advertising content and agree to indemnify us for violations of these warranties, these contractual remedies may not cover

all of our losses resulting from governmental penalties.

Violations or alleged violations of the content requirements could also

harm our reputation and impair our ability to conduct and expand our business.

Uncertainties

in the interpretation and enforcement of PRC laws and regulations could limit the legal protections available to us.

PRC legal system is a civil law system based on written statutes.

Unlike common law systems, it is a system in which legal decisions

have limited value as precedents.

In the late 1970s, the PRC government began to promulgate a comprehensive system of laws and

regulations governing economic matters in general.

The overall effect of legislation over the past three decades has significantly

increased the protections afforded to various forms of foreign or private-sector investment in the PRC.

WFOE, our PRC operating

subsidiary, is a wholly foreign-owned enterprise and is subject to laws and regulations applicable to foreign investment in the

PRC as well as laws and regulations applicable to foreign-invested enterprises.

WFOE is a privately owned company and is subject

to various PRC laws and regulations that are generally applicable to companies in the PRC.

These laws and regulations are still

evolving, and their interpretation and enforcement involve uncertainties.

For example, we may have to resort to administrative

and court proceedings to enforce the legal protections that it enjoy either by law or contract.

However, since PRC administrative

and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be

more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we may enjoy

in the PRC legal system than in more developed legal systems.

These uncertainties may also impede our ability to enforce the contracts

that we have entered into.

As a result, these uncertainties could materially and adversely affect our business and operations.

in issuing invoices due to China taxing authorities may materially and adversely affect our cash flow.

Companies operating in China

may be required to obtain VAT invoices in advance from the Chinese tax authorities in order to collect the dues from our customers

according to their contractual arrangement.

To accomplish this, companies submit invoices to the Chinese tax authorities and await

for the VAT invoices to be issued.

Upon receipt, it sends the VAT invoices to the customers for payment.

From time to time, the

Chinese tax authority may delay issuing the VAT invoices because the amount of the company’s invoices exceeded the quotas

previously granted for the VAT invoices for that period of time.

Such quotas are set by the Chinese tax authorities based on the

amount of invoices issued by the company over a period of time pursuant to the company’s past business operation, which quotas

are adjusted periodically.

As such, for fast growing companies like ours, our invoices may periodically exceed the current quota

granted which results in a delay in obtaining VAT invoices impacting our ability to timely invoice and collect our accounts receivable

from our clients.

To address this challenge, we have taken an active role in reaching out to the Chinese tax authorities to explain

the company’s fast growth which is outpacing the quota needed to timely obtain VAT invoices.

In addition, we are working

closely with our clients to receive payments before VAT invoices are issued.

However, if we are unable to timely increase our quota

resulting in delays in issuing VAT invoices or our clients are unable or unwilling to make payments before receipt of VAT invoices,

it may suffer delays in collecting our accounts receivable and hence affect our cash flow.

in our industry is growing and could cause us to lose market share and revenues in the future.

may face growing competition in our industry and we believe that the market is becoming more competitive as this industry matures

and begins to consolidate.

Some of our competitors have larger and more established borrower bases and substantially greater financial,

marketing and other resources than us.

As a result, we could lose market share and our revenues could decline, thereby affecting

our earnings and potential for growth.

business depends on the continuing efforts of our management.

If it loses their services, our business may be severely disrupted.

business operations depend on the continuing efforts of our management, particularly the executive officers named in this document.

If one or more of our management were unable or unwilling to continue their employment with us, it might not be able to replace

them in a timely manner, or at all.

We may incur additional expenses to recruit and retain qualified replacements.

may be severely disrupted and our financial condition and results of operations may be materially and adversely affected.

our management may join a competitor or form a competing company.

We may not be able to successfully enforce any contractual rights

it has with our management team, in particular in China, where all of these individuals reside and where our business is operated

through a series of subsidiaries and the VIE Contracts.

As a result, our business may be negatively affected due to the loss of

one or more members of our management.

to maintain an effective internal control over financial reporting may cause the combined company’s investors to lose confidence

in our financial and other reports.

a public company, the combined company will be subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley

The Exchange Act requires, among other things, that the combined company file annual reports with respect to our

business and financial condition.

Section 404 of the Sarbanes-Oxley Act requires, among other things, that the combined company

include a report of our management on the combined company’s internal control over financial reporting.

The combined company

is also required to include certifications of our management regarding the effectiveness of our disclosure controls and procedures.

If the combined company cannot effectively maintain our controls and procedures, the combined company could suffer material misstatements

in our financial statements and other information it reports which would likely cause investors to lose confidence.

of confidence could lead to a decline in the trading price of the combined company’s common shares.

business may be materially adversely impacted by the global financial crisis and economic downturn.

operate our business in the PRC.

Any future global financial crisis and economic downturn may materially adversely impact our

business, financial condition, results of operations and prospects in a number of ways, including:

may face severe challenges, loss of customers and other operation risks during the global financial crisis and economic downturn;

and other sources of liquidity may not be available on reasonable terms or at all.

risks may be exacerbated in the event of a prolonged economic downturn or financial crisis.

severe and prolonged global economic recession and the slowdown in the Chinese economy may adversely affect our business, results

of operations and financial condition.

growth of the Chinese economy has slowed down since 2012 compared to the previous decade and the trend may continue.

to the National Bureau of Statistics of China, China’s gross domestic product (GDP) growth was 6.6% in 2018.

There is considerable

uncertainty over the long-term effects of the monetary and fiscal policies adopted by the central banks and financial authorities

of some of the world’s leading economies, including the United States and China.

In addition, there have also been concerns

on the relationship between China and the U.S.

following rounds of tariffs imposed by the U.S.

and retaliatory tariffs imposed

by China and concerns on the relationship among China and other Asian countries, which may result in or intensify potential conflicts

in relation to territorial disputes.

It is unclear whether these challenges and uncertainties will be contained or resolved, and

what effects they may have on the global political and economic conditions in the long term.

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 prolonged slowdown in the global or Chinese economy may have a negative impact on our

business, results of operations and financial condition, and continued turbulence in the international markets may adversely affect

our ability to access the capital markets to meet liquidity needs.

adverse changes in political policies of the PRC government could negatively impact China’s overall economic growth, which

could materially adversely affect our business.

The Company is a holding

company and all of our operations are entirely conducted in the PRC.

China’s economy differs from the economies of most other

countries in many respects, including the amount of government involvement in the economy, the general level of economic development,

growth rates and government control of foreign exchange and the allocation of resources.

The PRC government exercises significant

control over China’s economic growth by allocating resources, controlling the payment of foreign currency-denominated obligations,

setting monetary policy and providing preferential treatment to particular industries or companies.

Any actions and policies adopted

by the PRC government could negatively impact the Chinese economy, which could materially adversely affect our business.

uncertainties and restrictions with respect to the political and economic policies of the PRC government and PRC laws and regulations

could have a significant impact upon the business we may be able to conduct in the PRC and accordingly on the results of our operations

and financial condition.

business operations may be adversely affected by the current and future political environment in the PRC.

The Chinese government

exerts substantial influence and control over the manner in which we must conduct our business activities.

Our ability to operate

in China may be adversely affected by changes in Chinese laws and regulations.

Under the current government leadership, the government

of the PRC has been pursuing economic reform policies that encourage private economic activities and greater economic decentralization.

However, the government of the PRC may not continue to pursue these policies, or may significantly alter these policies from time

to time without notice.

are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited

to, the laws and regulations governing our business, or the laws and regulations applicable to foreign investments in China.

after 1979 did the Chinese government begin to promulgate a comprehensive system of laws that regulate economic affairs in general,

deal with economic matters such as foreign investment, corporate organization and governance, commerce, taxation and trade, as

well as encourage foreign investment in China.

Although the influence of the law has been increasing, China has not developed

a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities

Also, because these laws and regulations are relatively new, and because of the limited volume of published cases and

judicial interpretation and their lack of force as precedents, interpretation and enforcement of these laws and regulations involve

significant uncertainties.

New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.

In addition, there have been constant changes and amendments of laws and regulations over the past 30 years in order to keep up

with the rapidly changing society and economy in China.

Because government agencies and courts provide interpretations of laws

and regulations and decide contractual disputes and issues, their inexperience in adjudicating new business and new polices or

regulations in certain less developed areas causes uncertainty and may affect our business.

Consequently, we cannot clearly foresee

the future direction of Chinese legislative activities with respect to either businesses with foreign investment or the effectiveness

on enforcement of laws and regulations in China.

The uncertainties, including new laws and regulations and changes of existing

laws, as well as judicial interpretation by inexperienced officials in the agencies and courts in certain areas, may cause possible

problems to foreign investors.

Second Session of the Thirteen National People’s Congress of the People’s Republic of China voted to adopt the Foreign

Investment Law of the People’s Republic of China (“the Foreign Investment Law”) on March 15, 2019, which

shall come into effect on January 1, 2020.

The current three major foreign investment laws (the Sino-Foreign Equity Joint Venture

Law, Sino-Foreign Cooperative Joint Venture Law and Wholly Foreign Owned Enterprise Law) shall be replaced by the Foreign Investment

Law on January 1, 2020.

Foreign Investment Law expressly stipulated that “the State protects foreign investors’

investment, earnings and other

legitimate rights and interests within the territory of China pursuant to the present Law;”

“foreign investors may,

according to the present Law, freely remit into or out of China, in Renminbi or any other foreign currency, their contributions,

profits, capital gains, income from asset proposal, intellectual property royalties, lawfully acquired compensation, indemnity

or liquidation income and so on within the territory of China;”

“Foreign investors shall not invest in any field with

investment prohibited by the negative list for foreign investment access.

Foreign investors shall meet the investment conditions

stipulated under the negative list for any field with investment restricted by the negative list for foreign investment access;”

“In formulating normative documents concerning foreign investment, the people’s governments at all levels and their

departments concerned shall comply with laws and regulations, and if there are no laws or administrative regulations to serve

as the basis, they shall not impair foreign-invested enterprises’

legitimate rights and interests or increase their obligations,

set any market access and exit conditions, or intervene the normal production and operation activities of any foreign-invested

enterprise.”

is unclear how the Foreign Investment Law will be implemented in practice by the PRC government authorities.

Comparing with the

Draft Foreign Investment Law of the People’s Republic of China published in 2015, the Foreign Investment Law does not include

the following expression of ‘control or acquire equities of an enterprise within the territory of China through contractual

arrangements, including but not limited to contracts and trust agreements.’

Whether the offshore companies controlled by

the PRC investors through variable interest entities structure be deemed as foreign investment remains to be seen.

in the foreign currency exchange rate between U.S.

Dollars and Renminbi could adversely affect our financial condition.

value of the RMB against the U.S.

dollar and other currencies may fluctuate.

Exchange rates are affected by, among other things,

changes in political and economic conditions and the foreign exchange policy adopted by the PRC government.

On July 21, 2005,

the PRC government changed our policy of pegging the value of the RMB to the U.S.

Under the new policy, the RMB is permitted

to fluctuate within a narrow and managed band against a basket of foreign currencies.

Following the removal of the U.S.

peg, the RMB appreciated more than 20% against the U.S.

dollar over three years.

From July 2008 until June 2010, however, the

RMB traded stably within a narrow range against the U.S.

There remains significant international pressure on the PRC government

to adopt a more flexible currency policy, which could result in a further and more significant appreciation of the RMB against

foreign currencies.

On June 20, 2010, the PBOC announced that the PRC government would reform the RMB exchange rate regime and

increase the flexibility of the exchange rate.

On August 11, 2015, the PBOC led central parity quoting banks to further improve

the formation mechanism of the RMB against the US dollar, indicating that the central parity quoting price shall be decided with

reference to the closing price on the previous trading day.

On December 11, 2015, the China Foreign Exchange Trade System launched

the RMB exchange-rate index, which strengthened the reference to a currency basket to better maintain the stability of the RMB

exchange rate against the currencies in the basket.

As a result, the CNY/USD central parity formation mechanism of “closing

rate + exchange-rate movements of a basket of currencies”

was developed.

In June 2016, the Foreign Exchange Self-Disciplinary

Mechanism was established, allowing financial institutions to play a more important role in maintaining orderly operations in

the foreign-exchange market and in an environment for fair competition.

In February 2017, the Foreign Exchange Self-Disciplinary

Mechanism adjusted the reference period for the central parity against the currency basket from 24 hours ahead of submitting the

quotes to 15 hours between the closing on the previous trading day and the submission of the quotes, which avoided repeated references

to the daily movements of the USD exchange rate in the central parity of the following day.

In general, the RMB exchange-rate

central parity formation mechanism has been improving, which has effectively improved the rule-based, transparent, and market-oriented

nature of RMB exchange-rate policies and has played an active role in stabilizing exchange-rate expectations.

The flexibility

of the RMB exchange rate against the US dollar was further strengthened, exhibiting larger two-way fluctuations.

We cannot predict

how this new policy and mechanism will impact the RMB exchange rate.

Our revenues and costs are

mostly denominated in the RMB, and a significant portion of our financial assets are also denominated in the RMB.

Any significant

fluctuations in the exchange rate between the RMB and the U.S.

dollar may materially adversely affect our cash flows, revenues,

earnings and financial position, and the amount of and any dividends, if any, it may pay on our ordinary shares in U.S.

In addition, any fluctuations in the exchange rate between the RMB and the U.S.

dollar could result in foreign currency conversion

losses for financial reporting purposes.

may be difficult to protect interests and exercising rights as a shareholder since we conducts all of our operations in China,

and all of our officers and our Chairman reside outside the United States.

The Company was incorporated

in the Cayman Islands and it conducts all of our operations in China through Horgos, Xing Cui Can and their subsidiaries, our consolidated

VIEs in China.

In addition, all of our officers and our chairman reside outside of the United States and substantially all of the

assets of those persons are located outside of the United States.

As a result of all of the above, shareholders may have more difficulty

in protecting their interests through actions against our management, or major shareholders than would shareholders of a corporation

doing business entirely or predominantly within the United States.

inflation in China may inhibit economic activity and adversely affect our operations.

Chinese economy has experienced periods of rapid expansion in recent years, which can lead to high rates of inflation or deflation.

This has caused the PRC government to, from time to time, enact various corrective measures designed to restrict the availability

of credit or regulate growth and contain inflation.

High inflation may in the future cause the PRC government to once again impose

controls on credit and/or prices, or to take other action, which could inhibit economic activity in China.

Any action on the part

of the PRC government that seeks to control credit and/or prices may materially adversely affect our business operations.

regulation of loans to, and direct investments in, PRC entities by offshore holding companies may delay or prevent us from using

proceeds from future financing activities to make loans or additional capital contributions to our PRC operating subsidiaries.

As an offshore holding company

with PRC subsidiaries, we may transfer funds to our PRC subsidiaries or finance our operating entity by means of shareholder loans

or capital contributions.

Any loans to our PRC subsidiaries, which are foreign-invested enterprises, shall be limited to within

the margin between the total investment and registered capital approved by the examination and approval authorities.

scope of the aforementioned margin, foreign-invested enterprises may voluntarily contract foreign debts.

Where the margin is exceeded,

the original examination and approval authorities shall re-conduct appraisal and determination of total investment.

Such loan shall

be registered with SAFE, or their local counterparts.

Furthermore, any capital increase contributions we make to our PRC subsidiaries,

which are foreign-invested enterprises, shall be subject to record-filing via the Comprehensive Management System of MOFCOM.

may not be able to obtain these government registrations or approvals on a timely basis, if at all.

If we fail to receive such

registrations or approvals, our ability to provide loans or capital increase contributions to our PRC subsidiaries may be negatively

affected, which could adversely affect our liquidity and our ability to fund and expand our business.

In addition, SAFE promulgated

a Notice on Further Improving and Adjusting the Foreign Exchange Administration Policies on Direct Investments on November 19,

2012, or Circular 59 (《国家外汇管理局关于进一步改进和调整直接投资外汇管理政策的通知》(汇发[2012]59号

) ), which became effective on December 17, 2012, and was further amended on May 4, 2015 and October 10, 2018, respectively, requires

the authenticity of settlement of net proceeds from offshore offerings to be closely examined and the net proceeds to be settled

in the manner described in the offering documents.

Furthermore, SAFE promulgated a Notice on Reforming the Administrative Approach

Regarding the Settlement of the Foreign Exchange Capitals of Foreign-invested Enterprises, or Circular 19 (《国家外汇管理局关于改革外商投资企业外汇资本金结汇管理方式的通知》(汇发[2015]19号)

), promulgated on March 30, 2015, and took effect from June 1, 2015, pursuant to which the foreign-invested enterprises shall

be allowed to settle their foreign exchange capitals on a discretionary basis, the RMB funds obtained by foreign-invested enterprises

from the discretionary settlement of their foreign exchange capitals shall be managed under the accounts for foreign exchange

settlement pending payment, and a foreign-invested enterprise shall truthfully use their capital for their own operational purposes

within the scope of business and it shall not, unless otherwise prescribed by laws and regulations, use the foregoing funds for

investment in securities etc.

Besides, SAFE further promulgated a Notice on Reforming and Standardizing the Administrative Provisions

on Capital Account Foreign Exchange Settlement, or Circular 16 (《国家外汇管理局关于改革和规范资本项目结汇管理政策的通知》(汇发〔2016〕16号

) ), on June 9, 2016, according to which a domestic institution shall use foreign exchange earnings under capital account within

our business scope and in a truthful manner for proprietary purposes and a bank shall not process foreign exchange settlement

or payment formalities for a domestic institution that applies for the payment and settlement of all of their foreign exchange

earnings under capital account in one lump-sum or the payment of all RMB funds in their Account for Foreign Exchange Settlement

Pending Payment, if the domestic institution is unable to provide relevant materials in proof of transaction authenticity.

59, Circular 19 and Circular 16 may significantly limit our ability to effectively use the proceeds from future financing activities

as the WFOE may not convert the funds received from us in foreign currencies into RMB or may not use the RMB funds obtained from

foreign exchange settlement for certain purposes, which may materially adversely affect our liquidity and our ability to fund

and expand our business in the PRC.

disclosures about us in reports and other filings with the SEC and our other public pronouncements are not subject to the scrutiny

of any regulatory bodies in the PRC.

about us in SEC filings and other disclosure and public pronouncements are not subject to the review or scrutiny of any PRC regulatory

For example, the disclosure by us in SEC reports and other filings are not subject to the review by CSRC, a PRC regulator

that is tasked with oversight of the capital markets in China.

Accordingly, you should review information about us in SEC reports,

filings and our other public pronouncements with the understanding that no local regulator has done any review of information

about us in SEC reports, other filings or any of our other public pronouncements.

did not seek approval of the CSRC for the Business Combination which may be required;

the failure to obtain this approval, if

required, could have a material adverse effect on our business, operating results and reputation.

August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State-owned Assets Supervision and Administration Commission

of the State Council, the State Administration for Taxation, the State Administration for Industry and Commerce, the CSRC and

the State Administration of Foreign Exchange, or SAFE, jointly adopted the Regulations on Mergers and Acquisitions of Domestic

Enterprises by Foreign Investors, or the M&A Rules, which became effective on September 8, 2006, and were amended on June

22, 2009 (《关于外国投资者并购境内企业的规定( 2009 修订)》).

The M&A Rules, among other things, include provisions that purport to require an offshore special purpose vehicle incorporated

for the purpose of acquiring PRC domestic companies and controlled by PRC individuals to obtain the approval of the CSRC prior

to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange.

On September 21,

2006, the CSRC published on their official website procedures regarding approval of overseas listings by special purpose vehicles.

The CSRC approval procedures require the filing of an application and supporting documents with the CSRC.

on the advice of our PRC legal advisor at the time, we believe that no specific CSRC approval was required in the context of Business

Combination because (i) the CSRC has not issued any definitive rules or interpretations concerning whether the Business Combination

is subject to the CSRC approval procedures under the M&A Rules;

(ii) WFOE was established by us as a wholly foreign-owned

enterprise, and we have not acquired any equity interest or assets of a PRC domestic company owned by PRC companies or individuals

as defined under the M&A Rules that are our beneficial owners after the effective date of the M&A Rules, (iii) no provision

in the M&A Rules clearly classifies the contractual arrangements among Horgos and Xing Cui Can, our VIEs and their shareholders

as a type of acquisition transaction subject to the M&A Rules, and (iv) the CSRC currently has not issued any definitive rule

or interpretation concerning whether the Business Combination falls under the M&A Rules.

There can be no assurance that the

relevant PRC government agencies, including the CSRC, would reach the same conclusion as our PRC counsel, and hence we may face

regulatory actions or other sanctions from the CSRC or other PRC regulatory agencies.

In that case, the relevant regulatory agencies

may impose fines and penalties on our operations in the PRC, limit our operating privileges in the PRC, or take other actions

that could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects.

M&A Rules set forth complex procedures for acquisitions conducted by foreign investors, which could make it more difficult

to pursue growth through acquisitions.

M&A Rules established additional procedures and requirements that could make merger and acquisition activities by foreign

investors more time-consuming and complex, including requirements in some instances that the MOFCOM be notified in advance of

any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise.

In the future, we may

grow our business in part by acquiring complementary businesses.

Complying with the requirements of this regulation to complete

such transactions could be time-consuming, and any required approval processes, including obtaining approval from the MOFCOM,

may delay or inhibit our ability to complete such transactions.

Any delay or inability to obtain applicable approvals to complete

acquisitions could affect our ability to expand our business or maintain our market share.

In addition, in the future, if any

of our acquisitions were subject to the M&A Rules and were found not to be in compliance with the requirements of the M&A

Rules, relevant PRC regulatory agencies may impose fines and penalties on our operations in the PRC, limit our operating privileges

in the PRC, or take other actions that could have a material adverse effect on our business, financial condition, results of operations,

reputation and prospects.

regulations relating to offshore investment activities by PRC residents and PRC citizens may increase the administrative burden

we face and may subject our PRC resident beneficial owners or employees who are stock option holders to personal liabilities,

limit our subsidiary’s abilities to increase our registered capital or distribute profits to us, limit our ability to inject

capital into our PRC subsidiary, or may otherwise expose us to liability under PRC law.

has promulgated regulations that require PRC residents and PRC corporate entities to register with local branches of SAFE in

connection with their direct or indirect offshore investment activities.

These regulations may apply to our shareholders who

are PRC residents and may apply to any offshore acquisitions that it make in the future.

In accordance with the Circular on

Relevant Issues Relating to Domestic Resident’s Investment and Financing and Roundtrip Investment through Special

Purpose Vehicles, or SAFE Circular 37

(《国家外汇管理局关于境内居民通过特殊目的公司境外投融资及返程投资外汇管理有关问题的通知》(汇发[2014]37号)

), any PRC resident who is a direct or indirect shareholder of an offshore company is required to update his or her

registration with the relevant SAFE branches, with respect to that offshore company, any material change involving an

increase or decrease of capital, transfer or swap of shares, merger, division or other material event.

SAFE promulgated the

Notice on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment in

February 2015, which took effect on June 1, 2015.

This notice has amended SAFE Circular 37 requiring PRC residents or

entities to register with qualified banks rather than SAFE or their local branch in connection with their establishment or

control of an offshore entity established for the purpose of overseas investment or financing.

is uncertainty concerning under what circumstances residents of other countries and regions can be classified as a PRC resident.

The PRC government authorities may interpret our beneficial owners’

status differently or their status may change in the

Moreover, we may not be fully informed of the identities of our beneficial owners and we cannot assure you that all of

our PRC resident beneficial owners will comply with SAFE regulations.

The failure of our beneficial owners who are PRC residents

to make any required registrations may subject us to fines and legal sanctions, and prevent us from being able to make distributions

or pay dividends, as a result of which our business operations and our ability to distribute profits to you could be materially

adversely affected.

on foreign exchange under PRC laws may limit our ability to convert cash derived from our operating activities into foreign currencies

and may materially and adversely affect the value of your investment.

Substantially

all of our revenues and operating expenses are denominated in Renminbi.

Under the relevant foreign exchange regulations in the

PRC, conversion of the Renminbi is permitted, without the need for SAFE approval, for “current account”

transactions,

which includes dividends, trade, and service-related foreign exchange transactions, subject to procedural requirements including

presenting relevant documentary evidence of such transactions and conducting such transactions at designated foreign exchange

banks within China who have the licenses to carry out foreign exchange business.

Conversion of the Renminbi for “capital

account”

transactions, which includes foreign direct investment, loans and investment in negotiable instruments, is still

subject to significant limitations and requires approvals from and registration with SAFE and other PRC regulatory authorities.

Under our current structure, our source of funds primarily consists of dividend payments from our subsidiary in the PRC.

assure you that it will be able to meet all of our foreign currency obligations or to remit profits out of China.

If future changes

in relevant regulations were to place restrictions on the ability of our subsidiaries to remit dividend payments, our liquidity

and ability to satisfy our third-party payment obligations and our ability to distribute dividends could be materially adversely

may rely on dividends and other distributions on equity paid by our wholly-owned subsidiaries to fund any cash and financing requirements

it may have, and any limitation on the ability of our subsidiaries to make payments to us could have a material adverse effect

on our ability to conduct our business.

Company is a holding company, and it may rely on dividends from our wholly-owned subsidiaries and service, license and other fees

paid to our wholly-owned subsidiary in China by Horgos Star and Xing Cui Can for our cash requirements, including any debt it

Current PRC regulations permit our PRC subsidiaries to pay dividends to us only out of their accumulated profits, if

any, determined in accordance with Chinese accounting standards and regulations.

In addition, our PRC subsidiary, Xing Cui Can

and Horgos are required to set aside at least 10% of their after-tax profits each year, if any, to fund a statutory reserve until

such reserve reaches 50% of their registered capital, and each of our subsidiaries is required to further set aside a portion

of our after-tax profits to fund the employee welfare fund at the discretion of our board of directors.

These reserves are not

distributable as cash dividends.

Furthermore, if our PRC subsidiaries, Xing Cui Can and Horgos 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.

addition, the PRC tax authorities may require us to adjust our taxable income under the contractual arrangements it currently

have in place in a manner that would materially and adversely affect our PRC subsidiaries’

ability to pay dividends and

other distributions to us.

Any limitation on the ability of our subsidiaries to distribute dividends to us or on the ability of

Horgos and Xing Cui Can to make payments to us could materially and adversely limit our ability to grow, make investments or acquisitions

that could be beneficial to our businesses, pay dividends, or otherwise fund and conduct our business.

may be treated as a resident enterprise for PRC tax purposes under the EIT Law, which may subject us to PRC income tax for our

global income and withholding for any dividends it pay to our non-PRC shareholders.

Under the Enterprise Income

Tax Law (“EIT Law”), enterprises established outside of China whose “de facto management bodies”

in China are considered “resident enterprises,”

and will generally be subject to the uniform 25% enterprise income

tax rate for their global income.

Although the term “de facto management bodies”

is defined as “management bodies

which have substantial and overall management and control power on the operation, human resources, accounting and assets of the

enterprise,”

the circumstances under which an enterprise’s “de facto management body”

would be considered

to be located in China are currently unclear.

A circular issued by the State Administration of Taxation (《国家税务总局关于境外注册中资控股企业依据实际管理机构标准认定为居民企业有关问题的通知》)

on April 22, 2009, provides that a foreign enterprise controlled by a PRC company or a PRC company group will be classified as

a “resident enterprise”

with “de facto management bodies”

located within China if the following requirements

are satisfied:

(1) the senior management and core management departments in charge of daily operations function mainly in the PRC;

(2) financial and human resources decisions are subject to determination or approval by persons or bodies in the PRC;

assets, accounting books, company seals, and minutes and files of board and shareholders’

meetings are located or kept in

and (4) at least half of the enterprise’s directors or senior management with voting rights reside in the PRC.

addition, the State Administration of Taxation recently promulgated the Interim Provisions on Administration of Income Tax of Chinese-Controlled

Resident Enterprise Registered Overseas (《境外注册中资控股居民企业所得税管理办法(试行

)》), effective from September 1, 2011, which clarified certain matters concerning the determination of resident status,

administrative matters following this determination, and competent tax authorities.

These interim provisions also specify that,

when an enterprise that is both Chinese-controlled and incorporated outside of mainland China, receives PRC-sourced incomes such

as dividends and interests, no PRC withholding tax is applicable if such enterprise has obtained a certificate evidencing our status

as a PRC resident enterprise that is registered overseas and controlled by Chinese.

members of our management team are based in China and are expected to remain in China.

Although our offshore holding companies

are not controlled by any PRC company or company group, we cannot assure you that it will not be deemed to be a PRC resident enterprise

under the EIT Law and our implementation rules.

If we are deemed to be a PRC resident enterprise, we will be subject to PRC enterprise

income tax at the rate of 25% on our global income.

In that case, however, dividend income that we receive from our PRC subsidiaries

may be exempt from PRC enterprise income tax because the EIT Law and our implementation rules generally provide that dividends

received by a PRC resident enterprise from our directly invested entity that is also a PRC resident enterprise is exempt from

enterprise income tax.

Accordingly, if we are deemed to be a PRC resident enterprise and earn income other than dividends from

our PRC subsidiaries, a 25% enterprise income tax on our global income could significantly increase our tax burden and materially

and adversely affect our cash flow and profitability.

addition, the EIT Law and implementation rules are relatively new and ambiguities exist with respect to the interpretation

of the provisions relating to identification of PRC-sourced income.

If we are deemed to be a PRC resident enterprise, dividends

distributed to our non-PRC entity investors by us, or the gain our non-PRC entity investors may realize from the transfer of our

common shares, may be treated as PRC-sourced income and therefore be subject to a 10% PRC withholding tax pursuant to the EIT

Law and, as a result, the value of your investment may be materially and adversely affected.

may have exposure to greater than anticipated tax liabilities.

PRC laws and regulations, arrangements and transactions among business entities may be subject to audit or challenge by the PRC

tax authorities.

The tax laws applicable to our business activities are subject to interpretation.

We could face material and

adverse tax consequences if the PRC tax authorities determine that some of our business activities are not based on arm’s-length

prices and adjust our taxable income accordingly.

In addition, the PRC tax authorities may impose late payment fees and other

penalties to us for under-paid taxes.

Our consolidated net profits in the future may be materially and adversely affected if we

are subject to greater than anticipated tax liabilities.

PRC legal system has inherent uncertainties regarding the interpretation and enforcement of PRC laws and regulations which could

limit the legal protections available to investors.

Substantially

all of our operations are conducted in the PRC.

The PRC legal system is a civil law system based on written statutes, and prior

court decisions can only be cited as reference and have almost no precedential value.

Since 1979, the PRC government has been

developing a comprehensive system of laws, rules and regulations in relation to economic matters, such as foreign investment,

corporate organization and governance, commerce, taxation and trade.

However, because of the limited volume of published cases

and their non-binding nature, the interpretation and enforcement of these laws, rules and regulations involve some degree of uncertainty,

which may lead to additional restrictions and uncertainty for our business and uncertainty with respect to the outcome of any

legal action investors may take against us in the PRC.

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 pre-emption of local regulations by national laws.

Any changes to such laws and regulations may materially increase our

costs and regulatory exposure in complying with them.

we become directly subject to the recent scrutiny, criticism and negative publicity involving U.S.-listed Chinese companies, it

may have to expend significant resources to investigate and resolve any related issues, which could materially adversely impact

our business operations and reputation.

public companies that have substantially all of their operations in China have been the subject of intense scrutiny, criticism

and negative publicity by investors, financial commentators and regulatory agencies, such as the SEC.

Much of the scrutiny, criticism

and negative publicity has been centered around financial and accounting irregularities and mistakes, a lack of effective internal

controls over financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases,

allegations of fraud.

As a result of the scrutiny, criticism and negative publicity, the publicly traded stock of certain U.S.-listed

Chinese companies has sharply decreased in value.

Certain companies are now subject to shareholder lawsuit and SEC enforcement

actions and are conducting internal and external investigations into the allegations.

It is not clear what effect this scrutiny,

criticism and negative publicity may have on our business.

If we become the subject of any unfavorable allegations, whether such

allegations are proven to be true or untrue, it will have to expend significant resources to investigate such allegations and/or

This situation will be costly and time consuming and distract our management from growing our business.

Such allegations

may materially adversely impact our business operations and reputation.

risk of discontinuation of our Preferential Tax Treatments.

we are eligible to be exempted from income tax from 2017 to 2020, and will be eligible for certain tax rebates from local taxing

authorities from 2021 to 2025.

If such preferential tax is no longer available to us, the income tax rate may increase up to 25%,

which could have an adverse effect on financial condition and results of operations.

a result of the Business Combination, we will 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 Circular on Issues of Enterprise Income Tax on Indirect Transfers of Assets by Non-PRC Resident Enterprises, or

Pursuant to Circular 7, an “indirect transfer”

of assets, including equity interests in a PRC resident

enterprise, by non-PRC resident enterprises, may be re-characterized and treated as a direct transfer of PRC taxable assets, if

such arrangement does not have a reasonable commercial purpose and is established for the purpose of avoiding payment of PRC enterprise

As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax.

When determining

whether there is a “reasonable commercial purpose”

of the transaction arrangement, considerations include, inter alia,

(i) whether the main value of the equity interest of the relevant offshore enterprise derives directly or indirectly from PRC taxable

(ii) whether the assets of the relevant offshore enterprise mainly consist of direct or indirect investment in China or

if income is mainly derived from China;

and (iii) whether the offshore enterprise and subsidiaries directly or indirectly holding

PRC taxable assets have real commercial nature evidenced by their actual function and risk exposure.

According to Circular 7, where

the payer fails to withhold any or sufficient tax, the transferor shall declare and pay such tax to the tax authority by itself

within the statutory time limit.

Late payment of applicable tax will subject the transferor to default interest.

Circular 7 does

not apply to transactions of sales of shares by investors through a public stock exchange where such shares were acquired on a

public stock exchange.

On October 17, 2017, the SAT issued the Circular on Issues of Tax Withholding regarding Non-PRC Resident

Enterprise Income Tax, or Circular 37, which further elaborates the relevant implemental rules regarding the calculation, reporting

and payment obligations of the withholding tax by the non-resident enterprises.

Nonetheless, there remain uncertainties as to the

interpretation and application of Circular 7.

Circular 7 may be determined by the tax authorities to be applicable to our offshore

transactions or sales of our shares or those of our offshore subsidiaries where non-resident enterprises, being the transferors,

were involved.

as a result of the Business Combination, if a holder of our ordinary shares purchases our ordinary shares in the open market and

sells them in a private transaction, or purchases our ordinary shares in a private transaction and sells them in the open market,

and fails to comply with the SAT Circular 7, the PRC tax authorities may take actions, including requesting us to provide assistance

for their investigation or impose a penalty on us, which could have a negative impact on our business operations.

since we may pursue acquisitions as one of our growth strategies, and may conduct acquisitions involving complex corporate structures,

the PRC tax authorities might impose taxes on capital gains or request that we submit certain additional documentation for their

review in connection with any potential acquisitions, which may incur additional acquisition costs, or delay our acquisition timetable.

PRC tax authorities have discretion under Circular 7 to make adjustments to the taxable capital gains based on the difference

between the fair value of the equity interests transferred and the cost of investment.

We may pursue acquisitions in the future

that involve complex corporate structures.

If we are considered a non-resident enterprise under the EIT Law and if the PRC tax

authorities make adjustments to the taxable income of these transactions under Circular 7, our income tax expenses associated

with such potential acquisitions will be increased, which may have an adverse effect on our financial condition and results of

legislation or changes in the PRC labor laws or regulations may affect our business operations.

PRC labor laws or regulations could be amended or updated from time to time, and new laws or regulations may be enacted.

be required to change our business practices in order to comply with the new or revised labor laws and regulations or adapt to

policy changes.

There can be no assurance that we will be able to change our business practices in a timely or efficient manner

pursuant to such new requirements.

Any such failure may subject us to administrative fines or penalties or other adverse consequences

which could materially and adversely affect our brand name, reputation, business, financial condition and results of operations.

control of currency conversion may limit our ability to utilize our net revenues effectively and affect the value of your investment.

PRC government imposes controls on the convertibility of the Renminbi (RMB) into foreign currencies and, in certain cases, on

the remittance of currency out of China.

We receive all of our revenues in Renminbi.

Under our current corporate structure,

we will primarily rely on dividend payments from the WFOE to fund any cash and financing requirements that we may have, or

for the possible payment of dividends.

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 the WFOE may be used to

pay dividends to us.

However, approval from or registration with appropriate government authorities is required where

Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of

loans denominated in foreign currencies.

As a result, we need to obtain SAFE approval to use cash generated from the

operations of the WFOE and VIE to pay off their respective debt in a currency other than Renminbi owed to entities outside

China, if any, or to make other capital expenditure payments outside China in a currency other than Renminbi.

government may at their discretion restrict access to foreign currencies for current account transactions in the future.

the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency

demands, the value of your investment may be affected.

trading prices of our ordinary shares are likely to be volatile, which could result in substantial losses to our shareholders

and investors.

trading prices of our ordinary shares are likely to be volatile and could fluctuate widely due to factors beyond our control.

This may happen because of broad market and industry factors, like the performance and fluctuation in the market prices or the

underperformance or deteriorating financial results of other similarly situated companies that have listed their securities in

in recent years.

The securities of some of these companies have experienced significant volatility since their initial

public offerings, including, in some cases, substantial price declines in the trading prices of their securities.

performances of these companies’

securities after their offerings may affect the attitudes of investors toward such companies

listed in the United States, which consequently may affect the trading performance of our ordinary shares, regardless of our actual

operating performance.

In addition, securities markets may from time to time experience significant price and volume fluctuations

that are not related to our operating performance, such as the large decline in share prices in the United States and other jurisdictions.

addition to market and industry factors, the price and trading volume for our ordinary shares may be highly volatile for factors

specific to our own operations including the following:

in our revenues, earnings and cash flow;

● announcements

of new product and service offerings, investments, acquisitions, strategic partnerships, joint ventures, or capital commitments

by us or our competitors;

in the performance or market valuation of our company or our competitors;

in financial estimates by securities analysts;

in the number of our users and customers;

● fluctuations

in our operating metrics;

on our part to realize monetization opportunities as expected;

or departures of our key management and personnel;

of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities;

● detrimental

negative publicity about us, our competitors or our industry;

conditions or regulatory developments affecting us or our industry;

litigations or regulatory investigations.

of these factors may result in large and sudden changes in the trading volume and the price at which our ordinary shares will

In the past, shareholders of a public company often brought securities class action suits against the listed company following

periods of instability in the market price of that company’s securities.

If we were involved in a class action suit, it

could divert a significant amount of our management’s attention and other resources from our business and operations, which

could harm our results of operations and require us to incur significant expenses to defend the suit.

Any such class action suit,

whether or not successful, could harm our reputation and restrict our ability to raise capital in the future.

In addition, if

a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect

on our financial condition and results of operations.

securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the

market price for our ordinary shares and trading volume could decline.

trading market for our ordinary shares will depend in part on the research and reports that securities or industry analysts publish

about us or our industry.

If research analysts do not establish and maintain adequate research coverage or if the analysts who

cover us downgrade our ordinary shares or publish inaccurate or unfavorable research about our industry, the market price for

our ordinary shares might decline.

If one or more of these analysts cease coverage of us or fail to publish reports on us regularly,

we could lose visibility in the financial markets, which in turn could cause the market price or trading volume for our ordinary

shares to decline.

the Public Company Accounting Oversight Board (PCAOB) currently has access to inspect the auditor’s work papers and practices

of Glory Star Group, new laws or restrictions imposed by the Chinese government may limit or restrict the PCAOB inspection which

would deprive you of the benefit of such inspection.

independent registered public accounting firm, as an auditor of companies that are traded publicly in the U.S.

and a firm registered

with the PCAOB, is required by the laws of the U.S.

to undergo regular inspections by the PCAOB to assess our compliance with

the laws of the U.S.

and the relevant professional standards.

The PCAOB currently has access to inspect the working paper of our

auditors, however, new laws or restrictions may be imposed in China that may place new restrictions on PCAOB access to auditor’s

work papers for Chinese companies.

If new restrictions by the Chinese government limits or restricts the ability of the PCAOB

to conduct inspections of auditors who performs audits in China and/or for Chinese companies, it would make it more difficult

to evaluate the effectiveness of our auditors’

audit procedures or quality control procedures.

Investors may lose confidence

in our reported financial information and procedures and the quality of our financial statements if the PCAOB access to our auditors

is limited or restricted.

Relating to our Ordinary Shares

may face difficulties in protecting your interests, and your ability to protect your rights through the U.S.

federal courts may

be limited, because the Company is incorporated under Cayman Islands law.

Company is an exempted company incorporated under the laws of the Cayman Islands.

The Company’s corporate affairs are governed

by our memorandum and articles of association, the Cayman Islands Companies Law and the common law of the Cayman Islands.

rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities

of our directors to the Company under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands.

The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as

well as from common law of England and Wales, the decisions of whose courts are of persuasive authority, but are not binding,

on a court in the Cayman Islands.

The rights of the Company’s shareholders and the fiduciary responsibilities of our directors

under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions

in the United States.

In particular, the Cayman Islands have a less developed body of securities laws as compared to the United

states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than

the Cayman Islands.

In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in

a federal court of the United States.

is uncertainty as to whether the courts of the Cayman Islands would:

or enforce judgments of courts of the United States obtained against the Company based on certain civil liability provisions of

securities laws;

original actions brought against the Company predicated upon certain civil liability provisions of U.S.

securities laws.

is no statutory recognition in the Cayman Islands of judgments obtained in the United States, although the courts of the Cayman

Islands will in certain circumstances recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction

without retrial on the merits.

a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions

taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a

company incorporated in the United States.

judgments obtained against the Company by our shareholders may not be enforceable.

Company is a Cayman Islands company and all of our assets are located outside of the United States.

Substantially all of our current

operations are conducted in the PRC.

In addition, all of the Company’s directors and officers are nationals and residents

of countries other than the United States.

A substantial portion of the assets of these persons are located outside the United

As a result, it may be difficult or impossible for you to bring an action against the Company or against these individuals

in the United States in the event that you believe that your rights have been infringed under the United States federal securities

laws or otherwise.

Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of the PRC

may render you unable to enforce a judgment against our assets or the assets of our directors and officers.

our shareholders exercise their registration rights with respect to their securities, it may have an adverse effect on the market

price of our ordinary shares and the existence of these rights may make it more difficult to effect a business combination.

initial shareholders are entitled to make a demand that we register the resale of their insider shares at any time commencing

of our initial shareholders are entitled to make a demand that we register the resale of their insider shares at any time commencing

three months prior to the date on which their shares may be released from escrow.

Additionally, the purchasers of the private

warrants and our initial shareholders, officers and directors are entitled to demand that we register the resale of the shares

underlying the private warrants and private warrants and any securities our initial shareholders, officers, directors or their

affiliates may be issued in payment of working capital loans made to us at any time after we consummate a business combination.

The presence of these additional securities trading in the public market may have an adverse effect on the market price of our

In addition, the existence of these rights may make it more difficult to effectuate a business combination or increase

the cost of acquiring the target business, as the shareholders of the target business may be discouraged from entering into a

business combination with us or will request a higher price for their securities because of the potential effect the exercise

of such rights may have on the trading market for our ordinary shares.

may qualify as a passive foreign investment company, or “PFIC,”

which could result in adverse U.S.

federal income

tax consequences to U.S.

holders of our securities.

we are determined to be a PFIC (under the rules described below) for any taxable year (or portion thereof) that is included in

the holding period of a U.S.

Holder (as defined below) of our ordinary shares, rights or warrants, the U.S.

Holder may be subject

to adverse U.S.

federal income tax consequences and may be subject to additional reporting requirements.

The term “U.S.

Holder”

means a beneficial owner of ordinary shares, rights or warrants who or that is for U.S.

federal income tax purposes:

(i) an individual citizen or resident of the United States, (ii) a corporation (or other entity treated as a corporation for United

States federal income tax purposes) that is created or organized (or treated as created or organized) in or under the laws of

the United States, any state thereof or the District of Columbia, (iii) an estate the income of which is subject to United States

federal income taxation regardless of its source or (iv) a trust if (A) a court within the United States 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 in effect a valid election to be treated as a U.S.

foreign (i.e., non-U.S.) corporation will be a PFIC for U.S.

tax purposes if at least 75% of its gross income in a taxable year,

including its pro rata share of the gross income of any corporation in which it is considered to own at least 25% of the shares

by value, is passive income.

Alternatively, a foreign corporation will be a PFIC if at least 50% of its assets in a taxable year

of the foreign corporation, ordinarily determined based on fair market value and averaged quarterly over the year, including its

pro rata share of the assets of any corporation in which it is considered to own at least 25% of the shares by value, are held

for the production of, or produce, passive income.

Passive income generally includes dividends, interest, rents and royalties

(other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of passive

we are a blank check company, with no current active business, we believe that it is likely that we will meet the PFIC asset or

income test for our current taxable year ending December 31, 2019.

However, pursuant to a start-up exception, a corporation will

not be a PFIC for the first taxable year the corporation has gross income (the “start-up year”, which in our case

is the taxable year ending December 31, 2018), if (1) no predecessor of the corporation was a PFIC;

(2) the corporation satisfies

the IRS that it will not be a PFIC for either of the two taxable years following the start-up year;

and (3) the corporation is

not in fact a PFIC for either of those years.

The applicability of the start-up exception to us will not be known until after

the close of our current taxable year ending December 31, 2019.

After the acquisition of a company or assets in a business combination,

we may still meet one of the PFIC tests depending on the timing of the acquisition and the amount of our passive income and assets

as well as the passive income and assets of the acquired business.

If the company that we acquire in a business combination is

a PFIC, then we will likely not qualify for the start-up exception and will be a PFIC for our current taxable year ending December

Our actual PFIC status for our current taxable year or any future taxable year, however, will not be determinable until

after the end of such taxable year.

Accordingly, there can be no assurance with respect to our status as a PFIC for our current

taxable year ending December 31, 2019 or any future taxable year.

we are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S.

of our ordinary shares, rights or warrants and, in the case of our ordinary shares, the U.S.

Holder did not make either a timely

qualified electing fund (“QEF”) election for our first taxable year as a PFIC in which the U.S.

Holder held (or was

deemed to hold) ordinary shares or a timely “mark to market”

election, each as described below, such holder generally

will be subject to special rules with respect to:

gain recognized by the U.S.

Holder on the sale or other disposition of its ordinary shares, rights or warrants;

“excess distribution”

made to the U.S.

Holder (generally, any distributions to such U.S.

Holder during a taxable year

Holder that are greater than 125% of the average annual distributions received by such U.S.

Holder in respect of the

ordinary shares during the three preceding taxable years of such U.S.

Holder or, if shorter, such U.S.

Holder’s holding

period for the ordinary shares).

Holder’s gain or excess distribution will be allocated ratably over the U.S.

Holder’s holding period for the

ordinary shares, rights and warrants (as applicable);

amount allocated to the U.S.

Holder’s taxable year in which the U.S.

Holder recognized the gain or received the excess distribution,

or to the period in the U.S.

Holder’s holding period before the first day of our first taxable year in which we are a PFIC,

will be taxed as ordinary income;

amount allocated to other taxable years (or portions thereof) of the U.S.

Holder and included in its holding period will be taxed

at the highest tax rate in effect for that year and applicable to the U.S.

interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable to each such other

taxable year of the U.S.

general, if we are determined to be a PFIC, a U.S.

Holder may avoid the PFIC tax consequences described above in respect to our

ordinary shares (but not our warrants and likely not our rights) by making a timely QEF election (if eligible to do so) to include

in income its pro rata share of our net capital gains (as long-term capital gain) and other earnings and profits (as ordinary

income), on a current basis, in each case whether or not distributed, in the taxable year of the U.S.

Holder in which or with

which our taxable year ends.

Holder generally may make a separate election to defer the payment of taxes on undistributed

income inclusions under the QEF rules, but if deferred, any such taxes will be subject to an interest charge.

treatment of the rights to acquire our ordinary shares is unclear.

For example, the rights may be viewed as a forward contract,

derivative security or similar interest in our company (analogous to a warrant or option with no exercise price), and thus the

holder of the right would not be viewed as owning the ordinary shares issuable pursuant to the rights until such ordinary shares

are actually issued.

There may be other alternative characterizations of the rights that the IRS may successfully assert, including

that the rights are treated as equity in our company at the time the rights are issued, that would reach different conclusions

regarding the tax treatment of the rights under the PFIC rules.

In any case, depending on which characterization is successfully

applied to the rights, different PFIC consequences may result for U.S.

Holders of the rights.

It is also likely that a U.S.

of rights would not be able to make a QEF or mark-to-market election (discussed below) with respect to such U.S.

Holder’s

Due to the uncertainty of the application of the PFIC rules to the rights, all U.S.

holders are strongly urged to consult

with their own tax advisors regarding the consequences to holders of such rights in any initial business combination.

Holder may not make a QEF election with respect to its warrants to acquire our ordinary shares.

As a result, if a U.S.

sells or otherwise disposes of such warrants (other than upon exercise of such warrants), any gain recognized generally will be

subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above, if we were

a PFIC at any time during the period the U.S.

Holder held the warrants.

Holder that exercises such warrants properly

makes a QEF election with respect to the newly acquired ordinary shares (or has previously made a QEF election with respect to

our ordinary shares), the QEF election will apply to the newly acquired ordinary shares, but the adverse tax consequences relating

to PFIC shares, adjusted to take into account the current income inclusions resulting from the QEF election, will continue to

apply with respect to such newly acquired ordinary shares (which generally will be deemed to have a holding period for purposes

of the PFIC rules that includes the period the U.S.

Holder held the warrants), unless the U.S.

Holder makes a purging election.

The purging election creates a deemed sale of such shares at their fair market value.

The gain recognized by the purging election

will be subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above.

As a result of the purging election, the U.S.

Holder will have a new basis and holding period in the ordinary shares acquired

upon the exercise of the warrants for purposes of the PFIC rules.

QEF election is made on a shareholder-by-shareholder basis and, once made, can be revoked only with the consent of the IRS.

QEF election may not be made with respect to our warrants.

Holder generally makes a QEF election by attaching a completed

IRS Form 8621 (Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund), including the information

provided in a PFIC annual information statement, to a timely filed U.S.

federal income tax return for the tax year to which the

election relates.

Retroactive QEF elections generally may be made only by filing a protective statement with such return and if

certain other conditions are met or with the consent of the IRS.

Holders should consult their own tax advisors regarding

the availability and tax consequences of a retroactive QEF election under their particular circumstances.

order to comply with the requirements of a QEF election, a U.S.

Holder must receive a PFIC annual information statement from us.

If we determine we are a PFIC for any taxable year, we will endeavor to provide to a U.S.

Holder such information as the IRS may

require, including a PFIC annual information statement, in order to enable the U.S.

Holder to make and maintain a QEF election.

However, there is no assurance that we will have timely knowledge of our status as a PFIC in the future or of the required information

to be provided.

Holder has made a QEF election with respect to our ordinary shares, and the special tax and interest charge rules do not

apply to such shares (because of a timely QEF election for our first taxable year as a PFIC in which the U.S.

Holder holds (or

is deemed to hold) such shares or a purge of the PFIC taint pursuant to a purging election, as described above), any gain recognized

on the sale of our ordinary shares generally will be taxable as capital gain and no interest charge will be imposed under the

As discussed above, U.S.

Holders of a QEF are currently taxed on their pro rata shares of its earnings and profits,

whether or not distributed.

In such case, a subsequent distribution of such earnings and profits that were previously included

in income generally should not be taxable as a dividend to such U.S.

The tax basis of a U.S.

Holder’s shares in

a QEF will be increased by amounts that are included in income, and decreased by amounts distributed but not taxed as dividends,

under the above rules.

a determination as to our PFIC status will be made annually, an initial determination that our company is a PFIC will generally

apply for subsequent years to a U.S.

Holder who held ordinary shares, rights or warrants while we were a PFIC, whether or not

we meet the test for PFIC status in those subsequent years.

Holder who makes the QEF election discussed above for our first

taxable year as a PFIC in which the U.S.

Holder holds (or is deemed to hold) our ordinary shares, however, will not be subject

to the PFIC tax and interest charge rules discussed above in respect to such shares.

In addition, such U.S.

Holder will not be

subject to the QEF inclusion regime with respect to such shares for any taxable year of us that ends within or with a taxable

year of the U.S.

Holder and in which we are not a PFIC.

On the other hand, if the QEF election is not effective for each of our

taxable years in which we are a PFIC and the U.S.

Holder holds (or is deemed to hold) our ordinary shares, the PFIC rules discussed

above will continue to apply to such shares unless the holder makes a purging election, as described above, and pays the tax and

interest charge with respect to the gain inherent in such shares attributable to the pre-QEF election period.

Alternatively,

Holder, at the close of its taxable year, owns shares in a PFIC that are treated as marketable stock, the U.S.

may make a mark-to-market election with respect to such shares for such taxable year.

Holder makes a valid mark-to-market

election for the first taxable year of the U.S.

Holder in which the U.S.

Holder holds (or is deemed to hold) ordinary shares in

us and for which we are determined to be a PFIC, such holder generally will not be subject to the PFIC rules described above in

respect to its ordinary shares.

Instead, in general, the U.S.

Holder will include as ordinary income each year the excess, if

any, of the fair market value of its ordinary shares at the end of its taxable year over the adjusted basis in its ordinary shares.

Holder also will be allowed to take an ordinary loss in respect of the excess, if any, of the adjusted basis of its ordinary

shares over the fair market value of its ordinary shares at the end of its taxable year (but only to the extent of the net amount

of previously included income as a result of the mark-to-market election).

Holder’s basis in its ordinary shares

will be adjusted to reflect any such income or loss amounts, and any further gain recognized on a sale or other taxable disposition

of the ordinary shares will be treated as ordinary income.

Currently, a mark-to-market election likely may not be made with respect

to our rights or warrants.

mark-to-market election is available only for stock that is regularly traded on a national securities exchange that is registered

with the Securities and Exchange Commission, including the Nasdaq Capital Market, or on a foreign exchange or market that the

IRS determines has rules sufficient to ensure that the market price represents a legitimate and sound fair market value.

Holders should consult their own tax advisors regarding the availability and tax consequences of a mark-to-market election in

respect to our ordinary shares under their particular circumstances.

we are a PFIC and, at any time, have a foreign subsidiary that is classified as a PFIC, U.S.

Holders generally would be deemed

to own a portion of the shares of such lower-tier PFIC, and generally could incur liability for the deferred tax and interest

charge described above if we receive a distribution from, or dispose of all or part of our interest in, the lower-tier PFIC or

Holders otherwise were deemed to have disposed of an interest in the lower-tier PFIC.

We will endeavor to cause any lower-tier

PFIC to provide to a U.S.

Holder the information that may be required to make or maintain a QEF election with respect to the lower-tier

However, there is no assurance that we will have timely knowledge of the status of any such lower-tier PFIC.

we may not hold a controlling interest in any such lower-tier PFIC and thus there can be no assurance we will be able to cause

the lower-tier PFIC to provide the required information.

Holders are urged to consult their own tax advisors regarding the

tax issues raised by lower-tier PFICs.

Holder that owns (or is deemed to own) shares in a PFIC during any taxable year of the U.S.

Holder, may have to file an IRS

Form 8621(whether or not a QEF or market-to-market election is made) and such other information as may be required by the U.S.

Treasury Department.

rules dealing with PFICs and with the QEF and mark-to-market elections are very complex and are affected by various factors in

addition to those described above.

Accordingly, U.S.

Holders of our ordinary shares, rights or warrants should consult their own

tax advisors concerning the application of the PFIC rules to our ordinary shares, rights or warrants under their particular circumstances.

we are deemed to be an investment company, we may be required to institute burdensome compliance requirements and our activities

may be restricted, which may make it difficult for us to complete a business combination.

company that, among other things, is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business

of investing, reinvesting, owning, trading or holding certain types of securities would be deemed an investment company under

the Investment Company Act of 1940.

Since we will invest the proceeds held in the trust account only in United States government

treasury bills, notes or bonds having a maturity of 180 days or less or in money market funds meeting the applicable conditions

under Rule 2a-7 promulgated under the Investment Company Act of 1940 and that invest solely in United States treasuries, we believe

that we will not be considered to be an investment company pursuant to the exemption provided in Rule 3a-1 promulgated under the

Investment Company Act of 1940.

we are nevertheless deemed to be an investment company under the Investment Company Act of 1940, we may be subject to certain

restrictions that may make it more difficult for us to complete a business combination, including:

● restrictions

on the nature of our investments;

● restrictions

on the issuance of securities.

addition, we may have imposed upon us certain burdensome requirements, including:

● registration

as an investment company;

of a specific form of corporate structure;

record keeping, voting, proxy, compliance policies and procedures and disclosure requirements and other rules and regulations.

with these additional regulatory burdens would require additional expense that we have not provided for.

may not seek an opinion from an unaffiliated third party as to the fair market value of the target business we acquire.

are not required to obtain an opinion from an unaffiliated third party that the target business we select has a fair market value

in excess of at least 80% of the balance of the trust account unless our board of directors cannot make such determination on

We are also not required to obtain an opinion from an unaffiliated third party indicating that the price we are paying

is fair to our shareholders from a financial point of view unless the target is affiliated with our officers, directors, initial

shareholders or their affiliates.

If no opinion is obtained, our shareholders will be relying on the judgment of our board of

directors, whose collective experience in business evaluations for blank check companies like ours is not significant.

our directors may have a conflict of interest in analyzing the transaction due to their personal and financial interests.

may acquire a target business that is affiliated with our officers, directors, initial shareholders or their affiliates.

we do not currently intend to pursue an initial business combination with a company that is affiliated with our officers, directors,

initial shareholders or their affiliates, we are not prohibited from pursuing such a transaction, nor are we prohibited from consummating

a business combination where any of our officers, directors, initial shareholders or their affiliates acquire a minority interest

in the target business alongside our acquisition, provided in each case we obtain an opinion from an unaffiliated third party

indicating that the price we are paying is fair to our shareholders from a financial point of view.

These affiliations could cause

our officers or directors to have a conflict of interest in analyzing such transactions due to their personal and financial interests.

we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability

to protect your rights through the U.S.

Federal courts may be limited.

are an exempted company incorporated under the laws of the Cayman Islands and certain of our officers and directors are residents

of jurisdictions outside the United States.

As a result, it may be difficult for investors to effect service of process within

the United States upon our directors or executive officers, or enforce judgments obtained in the United States courts against

our directors or officers.

corporate affairs are governed by our amended and restated memorandum and articles of association, the Companies Law (as the same

may be supplemented or amended from time to time) or the common law of the Cayman Islands.

The rights of shareholders to take

action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under

Cayman Islands law are to a large extent governed by the common law of the Cayman Islands.

The common law of the Cayman Islands

is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the

decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands.

The rights of our

shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are different from statutes or judicial

precedent in some jurisdictions in the United States.

In particular, the Cayman Islands has a different body of securities laws

as compared to the United States.

In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative

action in a Federal court of the United States.

have been advised by our Cayman Islands legal counsel that the courts of the Cayman Islands are unlikely (i) to recognize or enforce

against us judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws

of the United States or any state;

and (ii) in original actions brought in the Cayman Islands, to impose liabilities against us

predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the

liabilities imposed by those provisions are penal in nature.

In those circumstances, although there is no statutory enforcement

in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce

a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that

a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been

given provided certain conditions are met.

For a foreign judgment to be enforced in the Cayman Islands, such judgment must be

final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman

Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, and or be of a kind

the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple

damages may well be held to be contrary to public policy).

A Cayman Islands Court may stay enforcement proceedings if concurrent

proceedings are being brought elsewhere.

a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions

taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a

United States company.

we must furnish our shareholders with financial statements of the target business prepared in accordance with U.S.

as issued by the IASB or reconciled to U.S.

GAAP, we may not be able to complete an initial business combination with some prospective

target businesses.

will be required to provide historical and pro forma financial statement disclosure relating to our target business to our shareholders.

These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally

accepted in the United States of America, or GAAP, or international financial reporting standards as issued by the International

Accounting Standards Board, or IFRS, depending on the circumstances, and the historical financial statements may be required to

be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB.

The financial

statements may also be required to be prepared in accordance with U.S.

GAAP for the Form 8-K announcing the closing of an initial

business combination, which would need to be filed within four business days after closing.

These financial statement requirements

may limit the pool of potential target businesses we may acquire.

warrants and certain of our shareholders, officers and directors are entitled to demand that we register the resale of the shares

underlying the private warrants and private warrants and any securities such shareholders, officers, directors or their affiliates

may be issued in payment of working capital loans made to us or as Closing Payment Shares and Earnout Shares from the Business

Combination at any time after the Closing of the Business Combination.

The presence of these additional securities trading in

the public market may have an adverse effect on the market price of our securities.

could delist our ordinary shares, which could limit investors’

ability to transact in our securities and subject us to additional

trading restrictions.

securities are listed on the Nasdaq Capital Market, a national securities exchange.

We cannot assure you that we will be able

to remain in compliance with the Nasdaq listing requirements.

the Nasdaq Capital Market delists our securities, we could face significant material adverse consequences, including:

limited availability of market quotations for our securities;

liquidity for our securities;

determination that our ordinary shares are a “penny stock”

which will require brokers trading in our ordinary shares

to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for

our securities;

limited amount of news and analyst coverage;

decreased ability to issue additional securities or obtain additional financing in the future.

our ordinary shares become subject to the SEC’s penny stock rules, broker-dealers may experience difficulty in completing

customer transactions, and trading activity in our securities may be adversely affected.

at any time we have net tangible assets of $5,000,001 or less and our ordinary shares have a market price per share of less than

$5.00, transactions in our ordinary shares may be subject to the “penny stock”

rules promulgated under the Exchange

Under these rules, broker-dealers who recommend such securities to persons other than institutional accredited investors

a special written suitability determination for the purchaser;

the purchaser’s written agreement to the transaction prior to sale;

the purchaser with risk disclosure documents which identify certain risks associated with investing in “penny stocks”

and which describe the market for these “penny stocks”

as well as a purchaser’s legal remedies;

a signed and dated acknowledgment from the purchaser demonstrating that the purchaser has actually received the required risk

disclosure document before a transaction in a “penny stock”

can be completed.

our ordinary shares become subject to these rules, broker-dealers may find it difficult to effectuate customer transactions and

trading activity in our securities may be adversely affected.

As a result, the market price of our securities may be depressed,

and you may find it more difficult to sell our securities.

with the Sarbanes-Oxley Act of 2002 will require substantial financial and management resources and may increase the time and

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inability to provide reliable financial reports could harm our business.

A target business may also not be in compliance with

the provisions of the Sarbanes-Oxley Act regarding the adequacy of internal controls.

The development of the internal controls

of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any

such acquisition.

Furthermore, any failure to implement required new or improved controls, or difficulties encountered in the

implementation of adequate controls over our financial processes and reporting in the future, could harm our operating results

or cause us to fail to meet our reporting obligations.

Inferior internal controls could also cause investors to lose confidence

in our reported financial information, which could have a negative effect on the trading price of our securities.

Furthermore, any failure to implement required new or

improved controls, or difficulties encountered in the implementation of adequate controls over our financial processes and reporting

in the future, could harm our operating results or cause us to fail to meet our reporting obligations.

Inferior internal controls

could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the

trading price of our securities.

are an “emerging growth company”

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are an “emerging growth company,”

as defined in the JOBS Act.

as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act.

We will remain an “emerging growth company”

for up to five years.

However, if our non-convertible debt issued within a three-year period exceeds $1.0 billion or revenues

exceed $1.07 billion, or the market value of our ordinary shares that are held by non-affiliates exceeds $700 million on the last

day of the second fiscal quarter of any given fiscal year, we would cease to be an emerging growth company as of the following

As an emerging growth company, we are not being required to comply with the auditor attestation requirements of section

404 of the Sarbanes-Oxley Act, we have reduced disclosure obligations regarding executive compensation in our periodic reports

and proxy statements, and we are exempt from the requirements of holding a nonbinding advisory vote on executive compensation

and shareholder approval of any golden parachute payments not previously approved.

Additionally, as an emerging growth company,

we have elected to delay the adoption of new or revised accounting standards that have different effective dates for public and

private companies until those standards apply to private companies.

As such, our financial statements may not be comparable to

companies that comply with public company effective dates.

We cannot predict if investors will find our shares less attractive

because we may rely on these provisions.

If some investors find our shares less attractive as a result, there may be a less active

trading market for our shares and our share price may be more volatile.

However, if our non-convertible debt issued within

a three-year period exceeds $1.0 billion or revenues exceed $1.07 billion, or the market value of our ordinary shares that are

held by non-affiliates exceeds $700 million on the last day of the second fiscal quarter of any given fiscal year, we would cease

to be an emerging growth company as of the following fiscal year.

As an emerging growth company, we are not being required to

comply with the auditor attestation requirements of section 404 of the Sarbanes-Oxley Act, we have reduced disclosure obligations

regarding executive compensation in our periodic reports and proxy statements, and we are exempt from the requirements of holding

a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously

Additionally, as an emerging growth company, we have elected to delay the adoption of new or revised accounting standards

that have different effective dates for public and private companies until those standards apply to private companies.

our financial statements may not be comparable to companies that comply with public company effective dates.

We cannot predict

if investors will find our shares less attractive because we may rely on these provisions.

If some investors find our shares less

attractive as a result, there may be a less active trading market for our shares and our share price may be more volatile.

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial

10 unchanged sentences

out of using the extended transition period difficult or impossible because of the potential differences in accountant standards

may reincorporate in another jurisdiction in connection with our initial business combination and such reincorporation may result

in taxes imposed on shareholders.

may, in connection with our initial business combination and subject to requisite shareholder approval under the Companies Law,

reincorporate in the jurisdiction in which the target company or business is located.

The transaction may require a shareholder

to recognize taxable income in the jurisdiction in which the shareholder is a tax resident or in which its members are resident

if it is a tax transparent entity.

We do not intend to make any cash distributions to shareholders to pay such taxes.

may be subject to withholding taxes or other taxes with respect to their ownership of us after the reincorporation.

federal income tax reform could adversely affect us and holders of our units.

December 22, 2017, President Trump signed into law H.R.

1, originally known as the “Tax Cuts and Jobs Act,”

significantly revised the Internal Revenue Code of 1986, as amended.

The new legislation, among other things, changes the U.S.

federal income tax rates, imposes significant additional limitations on the deductibility of interest, allows the expensing of

capital expenditures, and puts into effect the migration from a “worldwide”

system of taxation to a territorial system.

The impact of this new tax legislation, or of any future administrative guidance interpreting provisions thereof, on holders of

our units is uncertain and could be adverse.

This report does not discuss any such tax legislation or the manner in which it might

affect holders of our units.

We urge prospective investors to consult with their legal and tax advisors with respect to any such

legislation and the potential tax consequences of investing in our units.

our management following a business combination is unfamiliar with United States securities laws, they may have to expend time

and resources becoming familiar with such laws which could lead to various regulatory issues.

a business combination, our management will likely resign from their positions as officers of the company and the management of

the target business at the time of the business combination will remain in place.

We cannot assure you that management of the

target business will be familiar with United States securities laws.

If new management is unfamiliar with our laws, they may have

to expend time and resources becoming familiar with such laws.

This could be expensive and time-consuming and could lead to various

regulatory issues which may adversely affect our operations.

restrictions on repatriation of earnings from the target business’

home jurisdiction to foreign entities are instituted,

our business following a business combination may be materially negatively affected.

is possible that following an initial business combination, the home jurisdiction of the target business may have restrictions

on repatriations of earnings or additional restrictions may be imposed in the future.

If they were, it could have a material adverse

effect on our operations.

Associated with Acquiring and Operating a Business Outside of the United States

we effect our initial business combination with a company located outside of the United States, we would be subject to a variety

of additional risks that may negatively impact our operations.

we effect our initial business combination with a company located outside of the United States, we would be subject to any special

considerations or risks associated with companies operating in the target business’

home jurisdiction, including any of

the following:

and regulations or currency redemption or corporate withholding taxes on individuals;

governing the manner in which future business combinations may be effected;

and trade barriers;

● regulations

related to customs and import/export matters;

payment cycles;

issues, such as tax law changes and variations in tax laws as compared to the United States;

fluctuations and exchange controls;

of inflation;

in collecting accounts receivable;

and language differences;

strikes, riots, civil disturbances, terrorist attacks and wars;

● deterioration

of political relations with the United States which could result in any number of difficulties, both normal course such as above

or extraordinary such as sanctions being imposed.

We may not be able to adequately address these additional risks.

unable to do so, our operations might suffer.

we effect a business combination with a company located outside of the United States, the laws applicable to such company will

likely govern all of our material agreements and we may not be able to enforce our legal rights.

we effect a business combination with a company located outside of the United States, the laws of the country in which such company

operates will govern almost all of the material agreements relating to its operations.

We cannot assure you that the target business

will be able to enforce any of its material agreements or that remedies will be available in this new jurisdiction.

of laws and the enforcement of existing laws in such jurisdiction may not be as certain in implementation and interpretation as

in the United States.

The inability to enforce or obtain a remedy under any of our future agreements could result in a significant

loss of business, business opportunities or capital.

Additionally, if we acquire a company located outside of the United States,

it is likely that substantially all of our assets would be located outside of the United States and some of our officers and directors

might reside outside of the United States.

As a result, it may not be possible for investors in the United States to enforce their

legal rights, to effect service of process upon our directors or officers or to enforce judgments of United States courts predicated

upon civil liabilities and criminal penalties of our directors and officers under Federal securities laws.

of the costs and difficulties inherent in managing cross-border business operations after we acquire it, our results of operations

may be negatively impacted following a business combination.

a business, operations, personnel or assets in another country is challenging and costly.

Management of the target business that

we may hire (whether based abroad or in the U.S.) may be inexperienced in cross-border business practices and unaware of significant

differences in accounting rules, legal regimes and labor practices.

Even with a seasoned and experienced management team, the

costs and difficulties inherent in managing cross-border business operations, personnel and assets can be significant (and much

higher than in a purely domestic business) and may negatively impact our financial and operational performance.

countries, and especially those in emerging markets, have difficult and unpredictable legal systems and underdeveloped laws and

regulations that are unclear and subject to corruption and inexperience, which may adversely impact our results of operations

and financial condition.

ability to seek and enforce legal protections, including with respect to intellectual property and other property rights, or to

defend ourselves with regard to legal actions taken against us in a given country, may be difficult or impossible, which could

adversely impact our operations, assets or financial condition.

and regulations in many countries, including some of the emerging markets within the regions we will initially focus, are often

ambiguous or open to differing interpretation by responsible individuals and agencies at the municipal, state, regional and federal

The attitudes and actions of such individuals and agencies are often difficult to predict and inconsistent.

with respect to the enforcement of particular rules and regulations, including those relating to customs, tax, environmental and

labor, could cause serious disruption to operations abroad and negatively impact our results.

our initial business combination, substantially all of our assets may be located in a foreign country and substantially all of

our revenue may be derived from our operations in such country.

Accordingly, our results of operations and prospects will be subject,

to a significant extent, to the economic, political and legal policies, developments and conditions in the country in which we

economic, political and social conditions, as well as government policies, of the country in which our operations are located

could affect our business.

The economies in developing markets we will initially focus on, such as some countries in Eastern Europe,

Central Asia and India, differ from the economies of most developed countries in many respects.

Such economic growth has been

uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future.

the future such country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand

for spending in certain industries.

A decrease in demand for spending in certain industries could materially and adversely affect

our ability to find an attractive target business with which to consummate our initial business combination and if we effect our

initial business combination, the ability of that target business to become profitable.

rate fluctuations and currency policies may cause a target business’

ability to succeed in the international markets to

be diminished.

the event we acquire a non-U.S.

target, all revenues and income would likely be received in a foreign currency, the dollar equivalent

of our net assets and distributions, if any, could be adversely affected by reductions in the value of the local currency.

value of the currencies in our target regions fluctuate and are affected by, among other things, changes in political and economic

Any change in the relative value of such currency against our reporting currency may affect the attractiveness of

any target business or, following consummation of our initial business combination, our financial condition and results of operations.

Additionally, if a currency appreciates in value against the dollar prior to the consummation of our initial business combination,

the cost of a target business as measured in dollars will increase, which may make it less likely that we are able to consummate

such transaction.

our business objective includes the possibility of acquiring one or more operating businesses with primary operations in emerging

markets we will focus on, changes in the exchange rate between the U.S.

dollar and the currency of any relevant jurisdiction may

affect our ability to achieve such objective.

For instance, the exchange rates between the Turkish lira or the Indian rupee and

dollar has changed substantially in the last two decades and may fluctuate substantially in the future.

declines in value against the relevant currency, any business combination will be more expensive and therefore more difficult

Furthermore, we may incur costs in connection with conversions between U.S.

dollars and the relevant currency, which

may make it more difficult to consummate a business combination.

foreign law could govern almost all of our material agreements, we may not be able to enforce our rights within such jurisdiction

or elsewhere, which could result in a significant loss of business, business opportunities or capital.

law could govern almost all of our material agreements.

The target business may not be able to enforce any of its material agreements

or that remedies will be available outside of such foreign jurisdiction’s legal system.

The system of laws and the enforcement

of existing laws and contracts in such jurisdiction may not be as certain in implementation and interpretation as in the United

Judiciaries in such jurisdiction may also be relatively inexperienced in enforcing corporate and commercial law, leading

to a higher than usual degree of uncertainty as to the outcome of any litigation.

As a result, the inability to enforce or obtain

a remedy under any of our future agreements could result in a significant loss of business and business opportunities.

governance standards in foreign countries may not be as strict or developed as in the United States and such weakness may hide

issues and operational practices that are detrimental to a target business.

corporate governance standards in some countries are weak in that they do not prevent business practices that cause unfavorable

related party transactions, over-leveraging, improper accounting, family company interconnectivity and poor management.

laws often do not go far to prevent improper business practices.

Therefore, shareholders may not be treated impartially and equally

as a result of poor management practices, asset shifting, conglomerate structures that result in preferential treatment to some

parts of the overall company, and cronyism.

The lack of transparency and ambiguity in the regulatory process also may result in

inadequate credit evaluation and weakness that may precipitate or encourage financial crisis.

In our evaluation of a business

combination we will have to evaluate the corporate governance of a target and the business environment, and in accordance with

United States laws for reporting companies take steps to implement practices that will cause compliance with all applicable rules

and accounting practices.

Notwithstanding these intended efforts, there may be endemic practices and local laws that could add

risk to an investment we ultimately make and that result in an adverse effect on our operations and financial results.

in foreign countries may be subject to accounting, auditing, regulatory and financial standards and requirements that differ,

in some cases significantly, from those applicable to public companies in the United States, which may make it more difficult

or complex to consummate a business combination.

In particular, the assets and profits appearing on the financial statements of

a foreign company may not reflect its financial position or results of operations in the way they would be reflected had such

financial statements been prepared in accordance with U.S.

GAAP and there may be substantially less publicly available information

about companies in certain jurisdictions than there is about comparable United States companies.

Moreover, foreign companies may

not be subject to the same degree of regulation as are United States companies with respect to such matters as insider trading

rules, tender offer regulation, shareholder proxy requirements and the timely disclosure of information.

principles relating to corporate affairs and the validity of corporate procedures, directors’

fiduciary duties and liabilities

and shareholders’

rights for foreign corporations may differ from those that may apply in the U.S., which may make the consummation

of a business combination with a foreign company more difficult.

We therefore may have more difficulty in achieving our business

a foreign judiciary may determine the scope and enforcement of almost all of our target business’

material agreements under

the law of such foreign jurisdiction, we may be unable to enforce our rights inside and outside of such jurisdiction.

law of a foreign jurisdiction, may govern almost all of our target business’

material agreements, some of which may be with

governmental agencies in such jurisdiction.

We cannot assure you that the target business or businesses will be able to enforce

any of their material agreements or that remedies will be available outside of such jurisdiction.

The inability to enforce or

obtain a remedy under any of our future agreements may have a material adverse impact on our future operations.

slowdown in economic growth in the markets that our business target operates in may adversely affect our business, financial condition,

results of operations, the value of its equity shares and the trading price of our shares following our business combination.

the business combination, our results of operations and financial condition may be dependent on, and may be adversely affected

by, conditions in financial markets in the global economy, and, particularly in the markets where the business operates.

economy could be adversely affected by various factors such as political or regulatory action, including adverse changes in liberalization

policies, business corruption, social disturbances, terrorist attacks and other acts of violence or war, natural calamities, interest

rates, inflation, commodity and energy prices and various other factors which may adversely affect our business, financial condition,

results of operations, value of our equity shares and the trading price of our shares following the business combination.

hostilities, terrorist attacks, communal disturbances, civil unrest and other acts of violence or war may result in a loss of

investor confidence and a decline in the value of our equity shares and trading price of our shares following our business combination.

attacks, civil unrest and other acts of violence or war may negatively affect the markets in which we may operates our business

following our business combination and also adversely affect the worldwide financial markets.

In addition, the countries we will

focus on, have from time to time experienced instances of civil unrest and hostilities among or between neighboring countries.

Any such hostilities and tensions may result in investor concern about stability in the region, which may adversely affect the

value of our equity shares and the trading price of our shares following our business combination.

Events of this nature in the

future, as well as social and civil unrest, could influence the economy in which our business target operates, and could have

an adverse effect on our business, including the value of equity shares and the trading price of our shares following our business

occurrence of natural disasters may adversely affect our business, financial condition and results of operations following our

business combination.

occurrence of natural disasters, including hurricanes, floods, earthquakes, tornadoes, fires and pandemic disease may adversely

affect our business, financial condition or results of operations following our business combination.

The potential impact of

a natural disaster on our results of operations and financial position is speculative, and would depend on numerous factors.

extent and severity of these natural disasters determines their effect on a given economy.

Although the long term effect of diseases

such as the H5N1 “avian flu,”

or H1N1, the swine flu, cannot currently be predicted, previous occurrences of avian

flu and swine flu had an adverse effect on the economies of those countries in which they were most prevalent.

An outbreak of

a communicable disease in our market could adversely affect our business, financial condition and results of operations following

our business combination.

We cannot assure you that natural disasters will not occur in the future or that its business, financial

condition and results of operations will not be adversely affected.

downgrade of credit ratings of the country in which the company we acquire does business may adversely affect our ability to raise

debt financing following our business combination.

assurance can be given that any rating organization will not downgrade the credit ratings of the sovereign foreign currency long-term

debt of the country in which our business target operates, which reflect an assessment of the overall financial capacity

of the government of such country to pay its obligations and its ability to meet its financial commitments as they become due.

Any downgrade could cause interest rates and borrowing costs to rise, which may negatively impact both the perception of credit

risk associated with our future variable rate debt and our ability to access the debt markets on favorable terms in the future.

This could have an adverse effect on our financial condition following our business combination.

on investment in foreign companies may be decreased by withholding and other taxes.

investments will incur tax risk unique to investment in developing economies.

Income that might otherwise not be subject to withholding

of local income tax under normal international conventions may be subject to withholding of income tax in a developing economy.

Additionally, proof of payment of withholding taxes may be required as part of the remittance procedure.

Any withholding taxes

paid by us on income from our investments in such country may or may not be creditable on our income tax returns.

seek to minimize any withholding tax or local tax otherwise imposed.

However, there is no assurance that the foreign tax authorities

will recognize application of such treaties to achieve a minimization of such tax.

We may also elect to create foreign subsidiaries

to effect the business combinations to attempt to limit the potential tax consequences of a business combination.

Associated With Acquiring and Operating a Target Business with its Primary Operation in China

set forth herein, our efforts in identifying a prospective target business will not be limited to a particular country, although

we intend to focus on opportunities created by consumer/lifestyle assets that may have particular application for the PRC market.

Accordingly, in addition to the risk factors referred above, we have set forth some of the primary risks we have identified in

seeking to consummate our initial business combination with a company having its primary operations in and/or important economic

relationships with the PRC.

a result of merger and acquisition regulations implemented on September 8, 2006 (amended on June 22, 2009) relating to acquisitions

of assets and equity interests of Chinese companies by foreign persons, we may not be able to complete a PRC transaction in a

timely manner.

September 8, 2006, the Ministry of Commerce, together with several other government agencies, promulgated the Regulations on Merger

and Acquisition of Domestic Enterprises by Foreign Investors (the “M&A Regulations”, including its amendment on

June 22, 2009), which implemented a comprehensive set of regulations governing the approval process by which a Chinese company

may participate in an acquisition of its assets or its equity interests and by which a Chinese company may obtain public trading

of its securities on a securities exchange outside the PRC.

Although there was a complex series of regulations in place prior

to September 8, 2006 for approval of Chinese enterprises that were administered by a combination of provincial and centralized

agencies, the M&A Regulations have largely centralized and expanded the approval process to the Ministry of Commerce, the

State Administration of Industry and Commerce (“SAIC”), the State Administration of Foreign Exchange (“SAFE”)

or its branch offices, the State Asset Supervision and Administration Commission (“SASAC”), and the China Securities

Regulatory Commission (“CSRC”).

Depending on the structure of the transaction, these M&A Regulations will require

the Chinese parties to make a series of applications and supplemental applications to one or more of the aforementioned agencies,

some of which must be made within strict time limits and depending on approvals from one or the other of the aforementioned agencies.

The application process has been supplemented to require the presentation of economic data concerning a transaction, including

appraisals of the business to be acquired and evaluations of the acquirer which will permit the government to assess the economics

of a transaction in addition to the compliance with legal requirements.

If obtained, approvals will have expiration dates by which

a transaction must be completed.

Also, completed transactions must be reported to the Ministry of Commerce and some of the other

agencies within a short period after closing or be subject to an unwinding of the transaction.

Therefore, acquisitions in China

may not be able to be completed because the terms of the transaction may not satisfy aspects of the approval process and may not

be completed, even if approved, if they are not consummated within the time permitted by the approvals granted.

with the PRC Antitrust law may limit our ability to effect our initial business combination.

PRC Antitrust Law became effective on August 1, 2008.

The government authorities in charge of antitrust matters in China are the

Antitrust Commission and other antitrust authorities under the State Council.

The PRC Antitrust Law regulates (1) monopoly agreements,

including decisions or actions in concert that preclude or impede competition, entered into by business operators;

dominant market position by business operators;

and (3) concentration of business operators that may have the effect of precluding

or impeding competition.

To implement the Antitrust Law, in 2008, the State Council formulated the regulations that require filing

of concentration of business operators, pursuant to which concentration of business operators refers to (1) merger with other

business operators;

(2) gaining control over other business operators through acquisition of equity interest or assets of other

business operators;

and (3) gaining control over other business operators through exerting influence on other business operators

through contracts or other means.

In 2009, the Ministry of Commerce, to which the Antitrust Commission is affiliated, promulgated

the Measures for Filing of Concentration of Business Operators (amended by the Guidelines for Filing of Concentration of Business

Operators in 2014), which set forth the criteria of concentration and the requirement of miscellaneous documents for the purpose

The business combination we contemplate may be considered the concentration of business operators, and to the extent

required by the Antitrust Law and the criteria established by the State Council, we must file with the antitrust authority under

the PRC State Council prior to conducting the contemplated business combination.

If the antitrust authority decides not to further

investigate whether the contemplated business combination has the effect of precluding or impeding competition or fails to make

a decision within 30 days from receipt of relevant materials, we may proceed to consummate the contemplated business combination.

If antitrust authority decides to prohibit the contemplated business combination after further investigation, we must terminate

such business combination and would then be forced to either attempt to complete a new business combination if it was prior to

February 20, 2020 (or until June 20, 2020 if we extend the period of time to consummate a business combination through issuance

of the potential extension warrants, as described in more detail herein) or we would be required to return any amounts which were

held in the trust account to our shareholders.

When we evaluate a potential business combination, we will consider the need to

comply with the Antitrust Law and other relevant regulations which may limit our ability to effect an acquisition or may result

in our modifying or not pursuing a particular transaction.

due to restrictions on foreign investment in a target business, we have to acquire the business through the use of contractual

arrangements and the PRC government determines that such contractual arrangements do not comply with foreign investment regulations,

or if these regulations or the interpretation of existing regulations in the PRC change or new restrictive or prohibitive regulations

come into force in the future, we could be subject to significant penalties or be forced to relinquish our interests in those

of the above mentioned industrial restrictions, foreign investors often acquire control of PRC business through the use of contractual

arrangements pursuant to which they effectively control the PRC business.

There are uncertainties as to whether such contractual

arrangements comply with the regulations prohibiting or restricting foreign ownership in certain industries.

In addition, even

if such arrangements are not in violation of current regulations, such regulations are subject to change in the future and may

be broadened to further restrict foreign investments in new industries or new category of assets.

we or any of our potential future target businesses are found to be in violation of any existing or future local laws or regulations

with respect to foreign investment in local entities (for example, if we are deemed to be holding equity interests in certain

of our affiliated entities in which direct foreign ownership is prohibited), the relevant regulatory authorities might have the

discretion to:

the business and operating licenses of the potential future target business;

relevant income and impose fines and other penalties;

● discontinue

or restrict the operations of the potential future target business;

us or potential future target business to restructure the relevant ownership structure or operations;

or prohibit our use of the proceeds of our initial public offering to finance the target businesses and its operations;

conditions or requirements with which we or potential future target business may not be able to comply;

us to discontinue a portion or all of our business.

imposition of any of the above penalties could result in a material and adverse effect on our ability to conduct our business

as well as our financial situation and we might be forced to relinquish our interests in operations.

we have to acquire a target business through contractual arrangements with, or which results in, one or more operating businesses

in China, such contracts may not be as effective in providing operational control as direct ownership of such businesses.

government of the PRC has restricted or limited foreign ownership of certain kinds of assets and companies operating in certain

The industry groups that are restricted are wide ranging, including certain aspects of telecommunications, advertising,

food production and heavy equipment manufacturers, for example.

In addition, there can be restrictions on the foreign ownership

of businesses that are determined from time to time to be in “important industries”

that may affect the national economic

security or having “famous Chinese brand names”

or “well established Chinese brand names.”

the review and approval requirements of the Ministry of Commerce and other relevant agencies as discussed elsewhere for acquisitions

of assets and companies in the PRC and subject to the various percentage ownership limitations that exist from time to time, acquisitions

involving foreign investors and parties in the various restricted categories of assets and industries may nonetheless sometimes

be consummated using contractual arrangements with permitted Chinese parties.

To the extent such agreements are employed, they

may be for control of specific assets such as intellectual property or control of blocks of the equity ownership interests of

a company which may provide exceptions to the merger and acquisition regulations mentioned above since these types of arrangements

typically do not involve a change of equity ownership in PRC operating company.

The agreements would be designed to provide our

company with the economic benefits of and control over the subject assets or equity interests similar to the rights of full ownership,

while leaving the technical ownership in the hands of Chinese parties who would be our nominees and, therefore, may exempt the

transaction from the merger and acquisition regulations, including the application process required thereunder.

However, there

has been limited implementation guidance provided with respect to the merger and acquisition regulations.

There can be no assurance

the relevant government agencies would not apply them to a business combination effected through contractual arrangements.

such an agency determines such an application should have made, consequences may include levying fines, revoking business and

other licenses, requiring restructure of ownership or operations and requiring discontinuation of any portion of all of the acquired

These agreements likely also would provide for increased ownership or full ownership and control by us when and if permitted

under PRC law and regulation.

If we choose to effect our initial business combination that employs the use of these types of control

arrangements, we may have difficulty in enforcing our rights.

Therefore, these contractual arrangements may not be as effective

in providing us with the same economic benefits, accounting consolidation or control over a target business as would direct ownership.

For example, if the target business or any other entity fails to perform its obligations under these contractual arrangements,

we may have to incur substantial costs and expend substantial resources to enforce such arrangements, and rely on legal remedies

under Chinese law, including seeking specific performance or injunctive relief, and claiming damages, which we cannot assure will

be sufficient to off-set the cost of enforcement and may adversely affect the benefits we expect to receive from the business

relating to the transfer of state-owned property rights in enterprises may increase the cost of our acquisitions and impose an

additional administrative burden on us.

legislation governing the acquisition of a China state-owned company contains stringent governmental regulations.

of state-owned property rights in enterprises must take place through a government approved “state-owned asset exchange,”

and the value of the transferred property rights must be evaluated by those Chinese appraisal firms qualified to do “state-owned

assets evaluation.”

The final price must not be less than 90% of the appraisal price.

Additionally, bidding/auction procedures

are essential in the event that there is more than one potential transferee.

In the case of an acquisition by foreign investors

of state-owned enterprises, the acquirer and the seller must make a resettlement plan to properly resettle the employees, and

the resettlement plan must be approved by the Employees’

Representative Congress.

The seller must pay all unpaid wages and

social welfare payments from the existing assets of the target company to the employees.

These regulations may adversely affect

our ability to acquire a state-owned business or assets.

controls that exist in the PRC may restrict or prevent us from using the proceeds of our initial public offering to acquire a

target company in PRC and limit our ability to utilize our cash flow effectively following our initial business combination.

promulgated the Notice of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement

of Capital of Foreign-invested Enterprises, or Circular 19, effective on June 1, 2015, in replacement of the Circular on the Relevant

Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of

Foreign-Invested Enterprises, or SAFE Circular 142, the Notice from the State Administration of Foreign Exchange on Relevant Issues

Concerning Strengthening the Administration of Foreign Exchange Businesses, or Circular 59, and the Circular on Further Clarification

and Regulation of the Issues Concerning the Administration of Certain Capital Account Foreign Exchange Businesses, or Circular

According to Circular 19, the flow and use of the RMB capital converted from foreign currency-denominated registered capital

of a foreign-invested company is regulated such that RMB capital may not be used for the issuance of RMB entrusted loans, the

repayment of inter-enterprise loans or the repayment of banks loans that have been transferred to a third party.

Although Circular

19 allows RMB capital converted from foreign currency-denominated registered capital of a foreign-invested enterprise to be used

for equity investments within the PRC, it also reiterates the principle that RMB converted from the foreign currency-denominated

capital of a foreign-invested company may not be directly or indirectly used for purposes beyond its business scope.

is unclear whether SAFE will permit such capital to be used for equity investments in the PRC in actual practice.

SAFE promulgated

the Notice of the State Administration of Foreign Exchange on Reforming and Standardizing the Foreign Exchange Settlement Management

Policy of Capital Account, or Circular 16, effective on June 9, 2016, which reiterates some of the rules set forth in Circular

19, but changes the prohibition against using RMB capital converted from foreign currency-denominated registered capital of a

foreign-invested company to issue RMB entrusted loans to a prohibition against using such capital to issue loans to non-associated

Violations of SAFE Circular 19 and Circular 16 could result in administrative penalties.

such, Circular 19 and Circular 16 may significantly limit our ability to transfer the proceeds of our initial public offering

to a PRC target company and the use of such proceeds by the PRC target company.

addition, following our initial business combination with a PRC target company, we will be subject to the PRC’s rules and

regulations on currency conversion.

In the PRC, the SAFE regulates the conversion of the Renminbi into foreign currencies.

FIEs are required to apply to the SAFE for “Foreign Exchange Registration Certificates for FIEs.”

Following our initial

business combination, we will likely be an FIE as a result of our ownership structure.

With such registration certificates, which

need to be renewed annually, FIEs are allowed to open foreign currency accounts including a “basic account”

and “capital

account.”

Currency conversion within the scope of the “basic account,”

such as remittance of foreign currencies

for payment of dividends, can be effected without requiring the approval of the SAFE.

However, conversion of currency in the “capital

account,”

including capital items such as direct investment, loans and securities, still require approval of the SAFE.

cannot assure you the PRC regulatory authorities will not impose further restrictions on the convertibility of the Renminbi.

future restrictions on currency exchanges may limit our ability to use the proceeds of our initial public offering in an initial

business combination with a PRC target company and the use our cash flow for the distribution of dividends to our shareholders

or to fund operations we may have outside of the PRC.

initial business combination may be subject to national security review by the PRC government and we may have to spend additional

resources and incur additional time delays to complete any such business combination or be prevented from pursuing certain investment

opportunities.

February 3, 2011, the PRC government issued a Notice Concerning the Establishment of Security Review Procedure on Mergers and

Acquisitions of Domestic Enterprises by Foreign Investors, or Security Review Regulations, which became effective on March 5,

The Security Review Regulations cover acquisitions by foreign investors of a broad range of PRC enterprises if such acquisitions

could result in de facto control by foreign investors and the enterprises are relating to military, national defense, important

agriculture products, important energy and natural resources, important infrastructures, important transportation services, key

technologies and important equipment manufacturing.

The scope of the review includes whether the acquisition will impact the national

security, economic and social stability, and the research and development capabilities on key national security related technologies.

Foreign investors should submit a security review application to the Department of Commerce for its initial review for contemplated

If the acquisition is considered to be within the scope of the Security Review Regulations, the Department of Commerce

will transfer the application to a joint security review committee within five business days for further review.

The joint security

review committee, consisting of members from various PRC government agencies, will conduct a general review and seek comments

from relevant government agencies.

The joint security review committee may initiate a further special review and request the termination

or restructuring of the contemplated acquisition if it determines that the acquisition will result in significant national security

Security Review Regulations will potentially subject a large number of mergers and acquisitions transactions by foreign investors

in China to an additional layer of regulatory review.

Currently, there is significant uncertainty as to the implication of the

Security Review Regulations.

Neither the Department of Commerce nor other PRC government agencies have issued any detailed rules

for the implementation of the Security Review Regulations.

If, for example, our potential initial business combination is with

a target company operating in the PRC in any of the sensitive sectors identified above, the transaction will be subject to the

Security Review Regulations, and we may have to spend additional resources and incur additional time delays to complete any such

We may also be prevented from pursuing certain investment opportunities if the PRC government considers that the

potential investments will result in a significant national security issue.

we successfully consummate a business combination with a target business with its primary operation in the PRC, we will be subject

to restrictions on dividend payments following consummation of our initial business combination.

we consummate our initial business combination, we may rely on dividends and other distributions from our operating company to

provide us with cash flow and to meet our other obligations.

Current regulations in China would permit our operating company in

China to pay dividends to us only out of its accumulated distributable profits, if any, determined in accordance with Chinese

accounting standards and regulations.

In addition, our operating company in China will be required to set aside at least 10% (up

to an aggregate amount equal to half of its registered capital) of its accumulated profits each year.

Such cash reserve may not

be distributed as cash dividends.

In addition, if our operating company in China incurs debt on its own behalf in the future,

the instruments governing the debt may restrict its ability to pay dividends or make other payments to us.

we make equity compensation grants to persons who are PRC citizens, they may be required to register with the SAFE.

face regulatory uncertainties that could restrict our ability to adopt equity compensation plans for our directors and employees

and other parties under PRC laws.

April 6, 2007, SAFE issued the “Operating Procedures for Administration of Domestic Individuals Participating in the Employee

Stock Ownership Plan or Stock Option Plan of An Overseas Listed Company, also known as “Circular 78.”

It is not clear

whether Circular 78 covers all forms of equity compensation plans or only those which provide for the granting of shares options.

For any plans which are so covered and are adopted by a non-PRC listed company, such as our company, after April 6, 2007, Circular

78 requires all participants who are PRC citizens to register with and obtain approvals from SAFE prior to their participation

In addition, Circular 78 also requires PRC citizens to register with SAFE and make the necessary applications and

filings if they participated in an overseas listed company’s covered equity compensation plan prior to April 6, 2007.

believe that the registration and approval requirements contemplated in Circular 78 will be burdensome and time consuming.

consummation of business combination with a target business with primary operations in PRC, we may adopt an equity incentive plan

and make shares option grants under the plan to our officers, directors and employees, whom may be PRC citizens and be required

to register with SAFE.

If it is determined that any of our equity compensation plans are subject to Circular 78, failure to comply

with such provisions may subject us and participants of our equity incentive plan who are PRC citizens to fines and legal sanctions

and prevent us from being able to grant equity compensation to our PRC employees.

In that case, our ability to compensate our

employees and directors through equity compensation would be hindered and our business operations may be adversely affected.

uncertainties exist with respect to the enactment timetable, interpretation and implementation of draft PRC Foreign Investment

Law and how it may impact the viability of our corporate structure, corporate governance and business operations should we adopt

a variable interest entity structure in connection with our initial business combination.

PRC Ministry of Commerce, or MOFCOM, published a discussion draft of the proposed Foreign Investment Law in January 2015 aiming

to, upon its enactment, replace the trio of existing laws regulating foreign investment in China, namely, the Sino-foreign Equity

Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise

Law, together with their implementation rules and ancillary regulations.

The draft Foreign Investment Law embodies an expected

PRC regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international practice and

the legislative efforts to unify the corporate legal requirements for both foreign and domestic investments.

The MOFCOM is currently

soliciting comments on this draft and substantial uncertainties exist with respect to its enactment timetable, interpretation

and implementation.

The draft Foreign Investment Law, if enacted as proposed, may materially impact the viability of our corporate

structure, corporate governance and business operations in many aspects if we adopt a variable interest entity structure in connection

with our initial business combination.

other things, the draft Foreign Investment Law expands the definition of foreign investment and introduces the principle of “actual

control”

in determining whether a company is considered an FIE.

The draft Foreign Investment Law specifically provides that

entities established in China but “controlled”

by foreign investors will be treated as FIEs.

If an FIE proposes to

conduct business in an industry subject to foreign investment “restrictions”

in the “negative list,”

FIE must go through a market entry clearance by the MOFCOM before being established.

If an FIE proposes to conduct business in

an industry subject to foreign investment “prohibitions”

in the “negative list,”

it must not engage in

the business.

However, an FIE that is subject to foreign investment “restrictions,”

upon market entry clearance, may

apply in writing for being treated as a PRC domestic investment if it is ultimately “controlled”

by PRC government

authorities and its affiliates and/or PRC citizens.

In this connection, “control”

is broadly defined in the draft

law to cover the following summarized categories:

(i) holding 50% or more of the voting rights of the subject entity;

less than 50% of the voting rights of the subject entity but having the power to secure at least 50% of the seats on the board

or other equivalent decision making bodies, or having the voting power to exert material influence on the board, the shareholders’

meeting or other equivalent decision making bodies;

or (iii) having the power to exert decisive influence, via contractual or

trust arrangements, over the subject entity’s operations, financial matters or other key aspects of business operations.

Once an entity is determined to be an FIE, it will be subject to the foreign investment restrictions or prohibitions set forth

in a “negative list,”

to be separately issued by the State Council at a later date.

Unless the underlying business

of the FIE falls within the negative list, which calls for market entry clearance by the MOFCOM, prior approval from the government

authorities as mandated by the existing foreign investment legal regime would no longer be required for establishment of the FIE.

“variable interest entity”

structure, or VIE structure, has been adopted by many PRC-based companies to obtain necessary

licenses and permits in the industries that are currently subject to foreign investment restrictions in China.

Under the draft

Foreign Investment Law, variable interest entities that are controlled via contractual arrangement would also be deemed as FIEs,

if they are ultimately “controlled”

by foreign investors.

Therefore, for any companies with a VIE structure in an

industry category that is included in the “negative list”

as restricted industry, the VIE structure may be deemed

legitimate only if the ultimate controlling person(s) is/are of PRC nationality (either PRC companies or PRC citizens).

if the actual controlling person(s) is/are of foreign nationalities, then the variable interest entities will be treated as FIEs

and any operation in the industry category on the “negative list”

without market entry clearance may be considered

draft Foreign Investment Law has not taken a position on what actions will be taken with respect to the companies employing a

VIE structure before its enactment, whether or not these companies are controlled by Chinese parties, while it is soliciting comments

from the public on this point.

It is uncertain whether or not we will utilize any VIE structure in connection with our initial

business combination or whether our initial business combination will be completed before the enacted version of the Foreign Investment

Law becomes effective.

In addition, it is uncertain whether the industry in which our target company operates will be subject

to the foreign investment restrictions or prohibitions set forth in the “negative list”

that is to be issued.

utilize a VIE structure in connection with our initial business combination and the enacted version of the Foreign Investment

Law and the final “negative list”

mandate further actions, such as MOFCOM market entry clearance or certain restructuring

of corporate structure and operations, there may be substantial uncertainties as to whether we can complete these actions in a

timely manner, or at all, and our business and financial condition may be materially and adversely affected.

draft Foreign Investment Law, if enacted as proposed, may also materially impact our corporate governance practice and increase

our compliance costs if we utilize any VIE structure in connection with our initial business combination.

For instance, the draft

Foreign Investment Law imposes stringent ad hoc and periodic information reporting requirements on foreign investors and the applicable

Aside from an investment implementation report and an investment amendment report that are required for each investment

and alteration of investment specifics, an annual report is mandatory, and large foreign investors meeting certain criteria are

required to report on a quarterly basis.

Any company found to be non-compliant with these information reporting obligations may

potentially be subject to fines and/or administrative or criminal liabilities, and the persons directly responsible may be subject

to criminal liabilities.

scrutiny over acquisition transactions by the PRC tax authorities may have a negative impact on potential acquisitions we may

pursue in the future.

PRC tax authorities have enhanced their scrutiny over the direct or indirect transfer of certain taxable assets, including, in

particular, equity interests in a PRC resident enterprise, by a non-resident enterprise by promulgating and implementing SAT Circular

59 and Circular 698, which became effective in January 2008, and a Circular 7 in replacement of some of the existing rules in

Circular 698, which became effective in February 2015.

Circular 698, where a non-resident enterprise conducts an “indirect transfer”

by transferring the equity interests

of a PRC “resident enterprise”

indirectly by disposing of the equity interests of an overseas holding company, the

non-resident enterprise, being the transferor, may be subject to PRC corporate income tax, if the indirect transfer is considered

to be an abusive use of company structure without reasonable commercial purposes.

As a result, gains derived from such indirect

transfer may be subject to PRC tax at a rate of up to 10%.

Circular 698 also provides that, where a non-PRC resident enterprise

transfers its equity interests in a PRC resident enterprise to its related parties at a price lower than the fair market value,

the relevant tax authority has the power to make a reasonable adjustment to the taxable income of the transaction.

February 2015, the SAT issued Circular 7 to replace the rules relating to indirect transfers in Circular 698.

Circular 7 has introduced

a new tax regime that is significantly different from that under Circular 698.

Circular 7 extends its tax jurisdiction to not

only indirect transfers set forth under Circular 698 but also transactions involving transfer of other taxable assets, through

the offshore transfer of a foreign intermediate holding company.

In addition, Circular 7 provides clearer criteria than Circular

698 on how to assess reasonable commercial purposes and has introduced safe harbors for internal group restructurings and the

purchase and sale of equity through a public securities market.

Circular 7 also brings challenges to both the foreign transferor

and transferee (or other person who is obligated to pay for the transfer) of the taxable assets.

Where a non-resident enterprise

conducts an “indirect transfer”

by transferring the taxable assets indirectly by disposing of the equity interests

of an overseas holding company, the non-resident enterprise being the transferor, or the transferee, or the PRC entity which directly

owned the taxable assets may report to the relevant tax authority such indirect transfer.

Using a “substance over form”

principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial

purpose and was established for the purpose of reducing, avoiding or deferring PRC tax.

As a result, gains derived from such indirect

transfer may be subject to PRC corporate income tax, and the transferee or other person who is obligated to pay for the transfer

is obligated to withhold the applicable taxes, currently at a rate of 10% for the transfer of equity interests in a PRC resident

face uncertainties on the reporting and consequences on future private equity financing transactions, share exchange or other

transactions involving the transfer of shares in our company by investors that are non-PRC resident enterprises.

The PRC tax authorities

may pursue such non-resident enterprises with respect to a filing or the transferees with respect to withholding obligation, and

request our PRC subsidiaries to assist in the filing.

As a result, we and non-resident enterprises in such transactions may become

at risk of being subject to filing obligations or being taxed, under Circular 59 or Circular 698 and Circular 7, and may be required

to expend valuable resources to comply with Circular 59, Circular 698 and Circular 7 or to establish that we and our non-resident

enterprises should not be taxed under these circulars, which may have a material adverse effect on our financial condition and

results of operations.

PRC tax authorities have the discretion under SAT Circular 59, Circular 698 and Circular 7 to make adjustments to the taxable

capital gains based on the difference between the fair value of the taxable assets transferred and the cost of investment.

we currently have no plans to pursue any acquisitions in China or elsewhere in the world, we may pursue acquisitions in the future

that may involve complex corporate structures.

If we are considered a non-resident enterprise under the PRC corporate income tax

law and if the PRC tax authorities make adjustments to the taxable income of the transactions under SAT Circular 59 or Circular

698 and Circular 7, our income tax costs associated with such potential acquisitions will be increased, which may have an adverse

effect on our financial condition and results of operations.

were a “shell company”

and are subject to additional restrictions under Rule 144 on resales of our restricted securities.

following is a quotation from subparagraph (i)(B)(2) of Rule 144:

“Notwithstanding paragraph (i)(1), if the issuer of the

securities previously had been an issuer described in paragraph (i)(1)(i) but has ceased to be an issuer described in paragraph

is subject to the reporting requirements of section 13 or 15(d) of the Exchange Act;

has filed all reports and other

materials required to be filed by section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months (or for

such shorter period that the issue was required to file such reports and materials), other than Form 8-K reports (§249.308

of this chapter);

and has filed current “Form 10 information”

with the Commission reflecting its status as an entity

that is no longer an issuer described in paragraph (i)(1)(i), then those securities may be sold subject to the requirements of

this section after one year has elapsed from the date that the issuer filed “Form 10 information”

with the Commission.”

As a “shell company”

immediately prior to the Business Combination, we will be subject to additional restrictions

under Rule 144 which provides that no sales of our restricted securities could be sold until we have complied with subparagraph

(i)(B)(2) of Rule 144.

Unresolved Staff Comments

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors