What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-03-14 compared with 2022-03-31 · 631 added, 471 removed, 0 unchanged (100% of the section changed)

Path Acquisition Corporation (the “Company”) is a blank check company incorporated in the Cayman Islands and formed for the

purpose of acquiring, engaging in a share exchange, share reconstruction and amalgamation with, purchasing all or substantially all of

the assets of, entering into contractual arrangements with, or engaging in any other similar business combination with one or more businesses

or entities, which we refer to throughout this report as our business combination.

Our efforts in identifying prospective target businesses

will not be limited to a particular geographic region, although we intend to focus on businesses that have a connection to the Asian

We believe that we will add value to these businesses primarily by providing them with access to the U.S.

capital markets.

June 24, 2021, the Company consummated the IPO of 5,000,000 units.

In addition, the underwriters exercised in full the over-allotment

option for an additional 750,000 Units, resulting in the issuance and sale of an aggregate of 5,750,000 Units.

Each Unit consists of

one ordinary share, par value $0.0001 per ordinary share, one redeemable warrant entitling its holder to purchase one-half of one Share

at a price of $11.50 per Share, and one right to receive one-tenth (1/10) of one Share upon the consummation of the Company’s initial

business combination.

Simultaneously

with the closing of the IPO, the Company consummated the private placement (“Private Placement”) with its sponsor, Greenland

Asset Management Corporation, a British Virgin Islands company (“Sponsor”) for the purchase of 270,500 units (the “Private

Units”) at a price of $10.00 per Private Unit, generating total proceeds of $2,705,000, pursuant to the Private Placement Unit

Purchase Agreement dated June 17, 2021.

Sponsor had previously advanced expenses or loaned the Company the sum of $453,364, evidenced in part by a note dated as of December

19, 2020 which loan was payable upon the earlier of completion of the IPO or December 31, 2021.

In connection with the completion of

the IPO, the note was repaid in full via an offset of certain amounts due under the Private Placement subscription.

of June 24, 2021, a total of $58,075,000 of the net proceeds from the IPO and the Private Placement Unit Purchase Agreement transaction

completed with the Sponsor were deposited in a trust account established for the benefit of the Company’s public shareholders,

established with Wilmington Trust, National Association acting as trustee, at an account at Morgan Stanley.

a result of the IPO, the Private Placement and sale of units to our underwriter, assuming the units were split into its component parts,

(i) 6,020,500 units, (ii) 7,458,000 ordinary shares (including 1,437,500 founder shares), (iii) 6,020,500 rights to acquire an aggregate of 602,050 ordinary shares:

and (iv) 6,020,500 warrants to acquire 3,010,250 ordinary shares issued and outstanding as of June 24, 2021.

We have not issued any securities

since such date.

to the IPO, there had been no public market for our units, ordinary shares, rights or warrants.

Our units are listed for trading on

the NASDAQ Capital Market, or NASDAQ, under the symbol “GPCOU”.

The ordinary shares, rights and warrants comprising the units

began separate trading on July 30, 2021 and are traded on NASDAQ under the symbols “GPCO,” “GPCOR” and “GPCOW”

respectively.

As our IPO registration statement and Form 8A were not declared effective by the SEC until June 21, 2021, we were not a

filing company under the Securities and exchange Act of 1934, as amended until June 21, 2021.

Since our IPO and until our

execution of the merger agreement with MC Hologram Inc.

and Golden Path Merger Sub Corporation in September 2021, our sole business activity

has been identifying and evaluating suitable acquisition transaction candidates and engaging in non-binding discussions with potential

target entities.

Thereafter, our business activities have also included the preparation of a registration statement and proxy statement

in connection with seeking stockholder approval of the proposed business combination with MC Hologram Inc.

(the “Business Combination”).

We presently have no revenue and have had losses since inception from incurring formation and operating costs since completion of our

Other than as specifically discussed, this report does not assume the closing of the Business Combination.

September 10, 2021, we, MC Hologram Inc., a Cayman Islands exempted company (“MC”), and Golden Path Merger Sub Corporation,

a Cayman Islands exempted company and wholly-owned subsidiary of the Company (the “Merger Sub”), entered into a Merger

Agreement (the “ Merger Agreement ” ).

to the Merger Agreement, upon the terms and subject to the conditions of the Merger Agreement and in accordance with the Cayman Islands

Companies Act (As Revised), the parties intend to effect a business combination transaction whereby the Merger Sub will merge with and

into MC, with MC being the surviving entity and becoming a wholly owned Subsidiary of the Company (the “Merger”).

and subject to the conditions set forth in the Merger Agreement and simultaneously with the closing of the Merger, the Company will change its name

to “MicroCloud Hologram Inc.”

Board of Directors of both the Company and MC and the stockholders of MC have approved the Merger Agreement and the transactions contemplated

to the Merger Agreement, the Merger is structured as a stock for stock transaction and is intended to be qualified as a tax-free reorganization.

The terms of the Merger provide for a valuation of MC and its subsidiaries and businesses of $450,000,000.

Based upon a per share value

of $10.10 per share, the stockholders of MC will receive approximately 44,554,455 ordinary shares of the Company which will represent

approximately 84.07% of the combined outstanding shares following the closing, assuming no redemptions by our stockholders and assuming

conversion of our outstanding rights into 602,050 ordinary shares.

of the transactions contemplated by the Merger Agreement is subject to customary conditions of the respective parties, including the

approval of the Merger Agreement by our shareholders.

Other than as specifically discussed, this report does not assume the closing of

the business combination with MC.

Business Combination Experience

will seek to capitalize on the strength of our management team.

Our team consists of experienced professionals and senior operating executives.

Collectively, our officers and directors have decades of experience in mergers and acquisitions, and operating companies, in Asia.

believe we will benefit from their accomplishments, and specifically their current and recent activities with companies that have a connection

to the Asian market, in identifying attractive acquisition opportunities.

However, there is no assurance that we will complete a business

believe that the members of our management team and board of directors have valuable and applicable experience for sourcing and analyzing

potential acquisition candidates across various industries and on an international basis based upon their professional experience.

Chief Executive Officer, Mr.

Cheng has advised numerous private and public companies in insurance matters and sales efforts.

experience relative to sourcing and analyzing potential business combination candidates, our Chief Financial Officer, Mr.

served as Chief Financial Officer of another SPAC entity, Longevity Acquisition Corporation, and is a managing member of Cyngus Equity,

a boutique investment banking firm.

Previously, he was employed in the investment banking department at Lazard Freres and JP Morgan First

Capital in China.

Hai Lin, one of our directors, has served as General Manager of Red 13 Financial Holdings (Hong Kong) Co., Ltd.

Jan 2015, where Mr.

Lin is responsible for project development, mergers and acquisition and corporate finance, including company creating

and advising on corporate presentations, investment planning and transaction structure.

Lin’s career includes a long and extensive

experience in merger and acquisition transactions and sourcing and analyzing investment opportunities.

efforts in identifying prospective target businesses will not be limited to a particular geographic region, although we intend to focus

on businesses that have a connection to the Asian market.

We believe that we will add value to these businesses primarily by providing

them with access to the U.S.

capital markets.

management team intends to focus on creating shareholder value by leveraging its experience in the management, operation and financing

of businesses to improve the efficiency of operations while implementing strategies to scale revenue organically and/or through acquisitions.

We have identified the following general criteria and guidelines, which we believe are important in evaluating prospective target businesses.

While we intend to use these criteria and guidelines in evaluating prospective businesses, we may deviate from these criteria and guidelines

should we see justification to do so.

Middle-Market Growth

We will primarily seek to acquire one or more growth businesses with a total enterprise

value of between $150,000,000 and $300,000,000.

We believe that there are a substantial number of potential target businesses within

this valuation range that can benefit from new capital for scalable operations to yield significant revenue and earnings growth.

We currently do not intend to acquire either a start-up company (a company that has not yet established commercial operations) or

a company with negative cash flow.

Companies in Business

Segments that are Strategically Significant to the Asian Markets.

We will seek to acquire those businesses

that are currently strategically significant in the Asian markets.

Such sectors include:

Internet and high technology, financial

technology (including technology applied in financial services or used to help companies manage the financial aspects of their business),

clean energy, health care, consumer and retail, energy and resources, food processing, manufacturing and education.

Business with Revenue

and Earnings Growth Potential.

We will seek to acquire one or more businesses that have the potential

for significant revenue and earnings growth through a combination of both existing and new product development, increased production

capacity, expense reduction and synergistic follow-on acquisitions resulting in increased operating leverage.

Companies with Potential

for Strong Free Cash Flow Generation.

We will seek to acquire one or more businesses that have the

potential to generate strong, stable and increasing free cash flow.

We intend to focus on one or more businesses that have predictable

revenue streams and definable low working capital and capital expenditure requirements.

We may also seek to prudently leverage this

cash flow in order to enhance shareholder value.

Benefit from Being

a Public Company.

We intend to only acquire a business or businesses that will benefit from being

publicly traded and which can effectively utilize access to broader sources of capital and a public profile that are associated with

being a publicly traded company.

criteria are not intended to be exhaustive or exclusive.

Any evaluation relating to the merits of a particular business combination may

be based, to the extent relevant, on these general guidelines as well as other considerations, factors and criteria that our sponsor

and management team may deem relevant.

In the event that we decide to enter into a business combination with a target business that does

not meet the above criteria and guidelines, we will disclose that the target business does not meet the above criteria in our shareholder

communications related to our business combination, which would be in the form of proxy solicitation or tender offer materials, as applicable,

that we would file with the United States Securities and Exchange Commission, or the SEC.

In evaluating a prospective target business,

we expect to conduct a due diligence review which may encompass, among other things, meetings with incumbent ownership, management and

employees, document reviews, interviews of customers and suppliers, inspections of facilities, as well as reviewing financial and other

information which will be made available to us.

performance by our management team, including their affiliates’ past performance, is not a guarantee either (i) of success with

respect to any business combination we may consummate or (ii) that we will be able to locate a suitable candidate for our initial business

Stockholders should not rely on the historical record of our management team and their affiliates as indicative of our future

of Potential Business Combination Targets

management team has developed a broad network of contacts and corporate relationships.

We believe that the network of contacts and relationships

of our management team and our sponsor will provide us with an important source of business combination opportunities.

In addition, we

anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment banking

firms, private equity firms, consultants, accounting firms and business enterprises.

We are not prohibited from pursuing an initial business

combination with a company that is affiliated with our sponsor, officers or directors, or completing the business combination through

a joint venture or other form of shared ownership with our sponsor, officers or directors.

we complete our initial business combination with an affiliated entity, or our Board of Directors cannot independently determine the

fair market value of the target business or businesses, we are not required to obtain an opinion from an independent investment banking

firm, another independent firm that commonly renders valuation opinions for the type of company we are seeking to acquire or from an

independent accounting firm that the price we are paying for a target is fair to our company from a financial point of view.

If no opinion

is obtained, our shareholders will be relying on the business judgment of our Board of Directors, which will have significant discretion

in choosing the standard used to establish the fair market value of the target or targets, and different methods of valuation may vary

greatly in outcome from one another.

Such standards used will be disclosed in our tender offer documents or proxy solicitation materials,

as applicable, related to our initial business combination.

of our management team may directly or indirectly own our ordinary shares and/or private placement units following the IPO, and, accordingly,

may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate

our initial business combination.

Further, each of our officers and directors may have a conflict of interest with respect to evaluating

a particular business combination if the retention or resignation of any such officers and directors was included by a target business

as a condition to any agreement with respect to our initial business combination.

of our directors and officers presently has, and in the future any of our directors and our officers may have additional, fiduciary or

contractual obligations to other entities pursuant to which such officer or director is or will be required to present acquisition opportunities

to such entity.

Accordingly, subject to his or her fiduciary duties under Cayman Islands law, if any of our officers or directors becomes

aware of an acquisition opportunity which is suitable for an entity to which he or she has then current fiduciary or contractual obligations,

he or she will need to honor his or her fiduciary or contractual obligations to present such acquisition opportunity to such entity,

and only present it to us if such entity rejects the opportunity.

Our amended and restated memorandum and articles of association provides

that, subject to his or her fiduciary duties under Cayman Islands law, we renounce our interest in any corporate opportunity offered

to any officer or director unless such opportunity is expressly offered to such person solely in his or her capacity as a director 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.

We do not believe, however, that any fiduciary duties or contractual obligations of our directors or officers would

materially undermine our ability to complete our business combination.

A Business Combination

Under our amended and restated

memorandum and articles of association, we have until 12 months from the closing of the IPO to consummate our initial business combination

provided, however if we anticipate that we may not be able to consummate our initial business combination within 12 months, we may, by

resolution of our board if requested by our sponsor, extend the period of time to consummate a business combination up to nine times,

each by an additional one month (for a total of up to 21 months to complete a business combination), subject to the sponsor depositing

additional funds into the trust account as set out below.

Pursuant to the terms of our memorandum and articles of association and the

trust agreement to be entered into between us, Wilmington Trust National Association and Vstock Transfer LLC, in order for the time available

for us to consummate our initial business combination to be extended, our sponsor or its affiliates or designees, upon five days advance

notice prior to the applicable deadline, must deposit into the trust account $191,667 (approximately $0.033 per public share), up

to an aggregate of $1,725,000, or $0.30 per public share (for an aggregate of 9 months), on or prior to the date of the applicable deadline,

for each extension.

In the event that we receive notice from our sponsor five days prior to the applicable deadline of its wish for us

to effect an extension, we intend to issue a press release announcing such intention at least three days prior to the applicable deadline.

In addition, we intend to issue a press release the day after the applicable deadline announcing whether or not the funds had been timely

Our sponsor and its affiliates or designees are not obligated to fund the trust account to extend the time for us to complete

our initial business combination.

If 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.

sponsor may extend the time frame by the company to complete a business combination up to an additional nine (9) months to complete a

business combination by depositing the required amount of funds for each monthly extension.

Holders of our securities will not have the

right to approve or disapprove any such monthly extension.

Further, holders of our securities will not have the right to seek or obtain

redemption in connection with any extension of the time frame to complete a business combination.

such payments from our sponsor to extend the time frame would be made in the form of a loan from our sponsor to the company.

and definitive terms of the loan in connection with any such loans have not yet been negotiated, but any such loan would be interest

free and not repaid unless and until we complete a business combination.

If we complete our initial business combination, we would expect

to repay such loaned amounts out of the proceeds of the trust account released to us or from funds which may be raised in any subsequent

capital financing transaction which may be undertaken in connection with the completion of a business combination.

NASDAQ rules require that our initial business combination must be with one or more target businesses that together have an aggregate

fair market value equal to at least 80% of the balance in the trust account (less any deferred underwriting commissions and taxes payable

on interest earned) at the time of our signing a definitive agreement in connection with our initial business combination.

of Directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion

from an independent investment banking firm or another independent firm that commonly renders valuation opinions for the type of company

we are seeking to acquire or an independent accounting firm.

We do not intend to purchase multiple businesses in unrelated industries

in conjunction with our initial business combination.

If we are delisted from NASDAQ prior to completion of the business combination,

the NASDAQ 80% requirement would no longer be applicable.

shall either (1) seek shareholder approval of our initial business combination at a meeting called for such purpose at which shareholders

may seek to redeem their shares, regardless of whether they vote for or against the proposed business combination, into their pro rata

share of the aggregate amount then on deposit in the trust account, including interest (which interest shall be net of taxes payable)

or (2) provide our public shareholders with the opportunity to tender their shares to us by means of a tender offer (and thereby avoid

the need for a shareholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the trust account,

including interest (which interest shall be net of taxes payable) in each case subject to the limitations described herein.

decision as to whether we will seek shareholder approval of a proposed business combination or conduct a tender offer will be made by

us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of

the transaction would require us to seek shareholder approval under the law or stock exchange listing requirement.

case of a tender offer, we will file tender offer documents with the SEC prior to completing our initial business combination which contain

substantially the same financial and other information about the initial business combination and the redemption rights as is required

under Regulation 14A of the Exchange Act, which regulates the solicitation of proxies.

In either case, we will consummate our initial

business combination only if we have net tangible assets of at least $5,000,001 upon such consummation and, if we seek stockholder approval,

a majority of the outstanding shares of common stock voted are voted in favor of the business combination.

anticipate structuring our initial business combination so that the post-transaction company in which our public shareholders own shares

will own or acquire 100% of the equity interests or assets of the target business or businesses.

The determination of whether or not

to acquire less than 100% of the equity interests or assets will be dependent upon numerous factors, including satisfaction certain objectives

of the target management team or target’s shareholders, the costs of any such proposed acquisition or for other reasons, many of

which we cannot determine at this time and will be contingent upon negotiations with prospective targets.

We may, however, structure

our initial business combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of

the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but we will

only complete a business combination for equity interests if the post-transaction company owns or acquires 50% or more of the outstanding

voting securities of the target or otherwise acquires a controlling interest in the target or in the event of an Assets Acquisition,

an Acquisition which results in an Operating business line, sufficient for it not to be required to register as an investment company

under the Investment Company Act of 1940, as amended, or the Investment Company Act.

In considering an asset transaction, we would acquire

such assets only if we could constitute from such assets a stand-alone operating business.

Even if the post-transaction company owns

or acquires 50% or more of the voting securities of the target, our shareholders prior to the business combination may collectively own

a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in the business combination

For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the

outstanding capital stock of a target.

In this case, we would acquire a 100% controlling interest in the target.

However, as a result

of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial business combination could own

less than a majority of our outstanding shares subsequent to our initial business combination.

If less than 100% of the equity interests

or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses

that is owned or acquired is what will be valued for purposes of the 80% of Nasdaq net assets test.

If our initial business combination

involves more than one target business or assets from different business, the 80% of net assets test will be based on the aggregate value

of all of the target businesses.

as a Public Company and Financial Considerations

believe our structure will make us an attractive business combination partner to target businesses.

As an existing public company, we

offer a target business an alternative to the traditional initial public offering through a merger or other business combination.

this situation, the owners of the target business would exchange their shares of stock in the target business for our shares or for a

combination of our shares and cash, allowing us to tailor the consideration to the specific needs of the sellers.

Although there are

various costs and obligations associated with being a public company, we believe target businesses will find this method a more certain

and cost effective method to becoming a public company than the typical initial public offering.

In a typical initial public offering,

there are additional expenses incurred in marketing, road show and public reporting efforts that may not be present to the same extent

in connection with a business combination with us.

Furthermore, once a proposed business combination is completed, the target business

will have effectively become public, whereas an initial public offering is always subject to the underwriters’ ability to complete

the offering, as well as general market conditions, which could delay or prevent the offering from occurring.

Once public, we believe

the target business would then have greater access to capital and an additional means of providing management incentives consistent with

shareholders’ interests.

It can offer further benefits by augmenting a company’s profile among potential new customers and

vendors and aid in attracting talented employees.

we believe that our structure and our management team’s backgrounds will make us an attractive business partner, some potential

target businesses may have a negative view of us since we are a blank check company, without an operating history, and there is uncertainty

relating to our ability to obtain shareholder approval of our proposed initial business combination and retain sufficient funds in our

trust account in connection therewith.

funds available for a business combination initially in the amount of $56,637,500 assuming no redemptions and after payment of up to

$1,437,500 of deferred underwriting fees, in each case before fees and expenses associated with our initial business combination, we

offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth

and expansion of its operations or strengthening its balance sheet by reducing its debt ratio.

Because we are able to complete our initial

business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the

most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires.

However, we have not taken any steps to secure third party financing and there can be no assurance it will be available to us.

seek to raise additional funds through a private offering of debt or equity securities in connection with the completion of our initial

business combination, and we may effectuate our initial business combination using the proceeds of such offering rather than using the

amounts held in the trust account.

Information Related to Our Securities, Redemption Rights and Liquidation

are a Cayman Islands exempted company (company number 1-336881) and our affairs are governed by our amended and restated memorandum and

articles of association, the Companies Act and common law of the Cayman Islands.

Pursuant to our amended and restated memorandum and

articles of association which was adopted upon the consummation of the IPO, we are authorized to issue 500,000,000 ordinary shares, par

value $0.0001 per share.

The information provided below is a summary only and we refer you to our prospectus dated as of June 22, 2021,

our amended and restated memorandum and articles of association and our warrant agreement and rights agreement with Vstock Transfer LLC

as warrant and rights agent for additional important and material information.

completion of our IPO and as of March 8, 2022, we had and have 7,458,000 ordinary shares issued and outstanding.

Ordinary shareholders

of record are entitled to one vote for each share held on all matters to be voted on by shareholders and vote together as a single class,

except as required by law.

Unless specified in the Cayman Islands Companies Act, our amended and restated memorandum and articles of

association or applicable stock exchange rules, the affirmative vote of a majority of our ordinary shares that are voted is required

to approve any such matter voted on by our shareholders.

Approval of certain actions will require a special resolution under Cayman Islands

law and pursuant to our amended and restated memorandum and articles of association;

such actions include amending our amended and restated

memorandum and articles of association and approving a statutory merger or consolidation with another company.

Directors are elected

for a term of two years.

There is no cumulative voting with respect to the election of directors, with the result that the holders of

more than 50% of the founder shares voted for the election of directors can elect all of the directors.

Our shareholders are entitled

to receive ratable dividends when, as and if declared by the Board of Directors out of funds legally available therefor.

will provide our public shareholders with the opportunity to redeem all or a portion of their public shares upon the completion of our

initial business combination at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account

as of two business days prior to the consummation of our initial business combination, including interest (which interest shall be net

of taxes payable) divided by the number of then issued and outstanding public shares, subject to the limitations described herein.

amount in the trust account is initially anticipated to be $10.10 per public share (subject to increase of up to an additional $0.033

per public share in the event that our sponsor elects to extend the period of time to consummate a business combination).

The per-share

amount we will distribute to investors who properly redeem their shares will not be reduced by the deferred underwriting commissions

we will pay to the underwriters.

There will be no redemption rights upon the completion of our initial business combination with respect

to our warrants or rights.

Our sponsor, officers and directors have entered into a letter agreement with us, pursuant to which they have

agreed to waive their redemption rights with respect to their founder shares, private placement shares and any public shares they may

acquire during or after the IPO in connection with the completion of our IPO.

a shareholder vote is not required by law and we do not decide to hold a shareholder vote for business or other legal reasons, we will,

pursuant to our amended and restated memorandum and articles of association, conduct the redemptions pursuant to the tender offer rules

of the SEC, and file tender offer documents with the SEC prior to completing our initial business combination.

Our amended and restated

memorandum and articles of association will require these tender offer documents to contain substantially the same financial and other

information about the initial business combination and the redemption rights as is required under the SEC’s proxy rules.

a shareholder approval of the transaction is required by law, or we decide to obtain shareholder approval for business or other legal

reasons, we will, like many blank check companies, offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy

rules and not pursuant to the tender offer rules.

If we seek shareholder approval, we will complete our initial business combination

only if a majority of the issued and outstanding ordinary shares voted are voted in favor of the business combination.

However, the participation

of our sponsor, officers, directors or their affiliates in privately-negotiated transactions, if any, could result in the approval of

our initial business combination even if a majority of our public shareholders vote, or indicate their intention to vote, against such

business combination.

For purposes of seeking approval of the majority of our issued and outstanding ordinary shares, non-votes will

have no effect on the approval of our initial business combination once a quorum is obtained.

We intend to give approximately 30 days

(but not less than 10 days nor more than 60 days) prior written notice of any such meeting, if required, at which a vote shall be taken

to approve our initial business combination.

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 association will 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), will be restricted from redeeming its shares with respect to

more than an aggregate of 15% of the ordinary shares sold in the IPO, which we refer to as the “Excess Shares.” However,

we would not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our

initial business combination.

shareholders’ inability to redeem the Excess Shares will reduce their influence over our ability to complete our initial business

combination, and such shareholders could suffer a material loss in their investment if they sell such Excess Shares on the open market.

Additionally, such shareholders will not receive redemption distributions with respect to the Excess Shares if we complete the business

And, as a result, such shareholders will continue to hold that number of shares exceeding 15% and, in order to dispose such

shares would be required to sell their shares in open market transactions, potentially at a loss.

we are unable to complete our initial business combination within such 12-month (or up to 21-month) time period, we will:

(i) cease all

operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter,

redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account,

including interest (which interest shall be net of taxes payable, and less up to $50,000 of interest to pay dissolution expenses) divided

by the number of then issued and outstanding public shares, which redemption will completely extinguish public shareholders’ rights

as shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly

as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our Board of Directors, liquidate

and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements

of other applicable law.

connection with our IPO and consummation of the private placement with our sponsor we issued an aggregate of 6,020,500 rights to acquire

an aggregate of 602,050 ordinary shares.

we enter into a definitive agreement for a business combination in which we will be the surviving entity, each holder of a right will

receive one-tenth (1/10) of one ordinary share upon consummation of our initial business combination, even if the holder of such right

redeemed all ordinary shares held by him, her or it in connection with the initial business combination or an amendment to our memorandum

and articles of association with respect to our pre-business combination activities.

No additional consideration will be required to

be paid by a holder of rights in order to receive his, her or its additional ordinary shares upon consummation of an initial business

combination as the consideration related thereto has been included in the unit purchase price paid for by investors in the IPO.

issuable upon exchange of the rights will be freely tradable (except to the extent held by affiliates of ours).

we are unable to complete a business combination within the required time period and we liquidate the funds held in the trust account,

holders of rights will not receive any of such funds with respect to their rights, nor will they receive any distribution from our assets

held outside of the trust account with respect to such rights, and the rights will expire worthless.

connection with our IPO and consummation of the private placement with our sponsor we issued an aggregate of 6,020,500 warrants to acquire

an aggregate of 3,010,250 ordinary shares.

The warrants purchased in our IPO have been issued in registered form under a warrant agreement

between Vstock Transfer LLC, as warrant agent, and us.

Each warrant entitles the registered holder to purchase one-half of one ordinary

share at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing on the later of 12 months from

the date of the closing of the IPO or thirty (30) days after the completion of our business combination.

Because the warrants may only be exercised for whole numbers of shares,

only an even number of warrants may be exercised at any given time.

Pursuant to the warrant agreement, a warrant holder may exercise

its warrants only for a whole number of shares.

This means that only an even number of warrants may be exercised at any given time by

a warrant holder.

The warrants will expire five years after the completion of our initial business combination, at 5:00 p.m., New York

City time, or earlier upon redemption or liquidation.

will not be obligated to deliver any ordinary shares pursuant to the exercise of a warrant and will have no obligation to settle such

warrant exercise unless a registration statement under the Securities Act with respect to the ordinary shares underlying the warrants

is then effective and a prospectus relating thereto is current, subject to our satisfying our obligations described below with respect

to registration.

We have agreed that as soon as practicable, but in no event later than 15 business days after the closing of our initial

business combination, we will use our best efforts to file, and within 60 business days following our initial business combination to

have declared effective, a registration statement covering the ordinary shares issuable upon exercise of the warrants.

the warrants become exercisable, we may redeem the outstanding warrants (except as described herein with respect to the private placement

whole and not in part;

a price of $0.01 per warrant;

a minimum of 30 days’ prior written notice of redemption, which we refer to as the 30-day redemption period;

and only if, the last sale price of our ordinary shares equals or exceeds $18.00 per share (as adjusted for share splits, share capitalizations,

rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day

period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders.

and when the warrants become redeemable by us, we may not exercise our redemption right if the issuance of shares upon exercise of the

warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable to effect such registration

or qualification.

and when the warrants become redeemable by us, we may not exercise our redemption right if the issuance of shares upon exercise of the

warrants is not exempt from registration or qualification under applicable state blue sky laws or we are unable to effect such registration

or qualification.

of warrants are not entitled to voting rights or any right to redemption in the event that we consummate a business combination.

are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the Securities

Act, as modified by the Jumpstart Our Business Startups Act of 2012, or the JOBS Act.

As such, we are eligible to take advantage of certain

exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies”

including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley

Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy

statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval

of any golden parachute payments not previously approved.

If some investors find our securities less attractive as a result, there may

be a less active trading market for our securities and the prices of our securities may be more volatile.

addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended

transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.

words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise

apply to private companies.

We intend to take advantage of the benefits of this extended transition period.

will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of

the completion of the IPO, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which we are deemed to

be a large accelerated filer, which means the market value of our ordinary shares that is held by non-affiliates exceeds $700 million

as of the prior June 30 th , and (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities

during the prior three-year period.

References herein to “emerging growth company” shall have the meaning associated with

it in the JOBS Act.

are a Cayman Islands exempted company incorporated on May 9, 2018.

Our executive offices are located at 100 Park Avenue, New York, NY

10017, and our telephone number is 917-267-4569.

Background and Merger

On September 16, 2022, we consummated the previously announced business combination pursuant to the Merger Agreement, by and among Golden Path, Golden Path Merger Sub, and MC.

Pursuant to the Merger Agreement, MC merged with Golden Path Merger Sub, survived the merger and continued as the surviving company and a wholly owned subsidiary of Golden Path (the “Merger”, and, collectively with the other transactions described in the Merger Agreement, the “Business Combination”).

Upon the closing of the Business Combination, Golden Path changed its name to MicroCloud Hologram Inc.

Our ordinary shares and warrants are listed on the Nasdaq Stock Market LLC (the “Nasdaq”) under the symbols “HOLO” and “HOLOW,” respectively.

The following diagram illustrates our corporate structure as of December 31, 2022:

Compare with our corporate structure as of September 16, 2022, Shenzhen Haiyun Xinsheng Technology Co., Ltd., our PRC subsidiary, ceased to hold any equity interests of Beijing Weixiao Hai Technology Co., Ltd.

and those of its subsidiary Tianjin Weixiao Hai Technology Co., Ltd.

are one of the leading holographic digitalization technology service providers in China in terms of total revenue and the number of total

intellectual property rights.

As of December 31, 2022, we owned 2,218 works of copy right, which represents a market leading position

as compared to our competitors in China.

We are committed to providing leading holographic technology services to our customers worldwide.

Our holographic technology services include high-precision holographic light detection and ranging (“LiDAR”) solutions, based

on holographic technology, exclusive holographic LiDAR point cloud algorithms architecture design, breakthrough technical holographic

imaging solutions, holographic LiDAR sensor chip design and holographic vehicle intelligent vision technology to service customers that

provide reliable holographic advanced driver assistance systems (“ADAS”).

We also provide holographic digital twin technology

services for customers and have built a proprietary holographic digital twin technology resource library.

Our holographic digital twin

technology resource library captures shapes and objects in 3D holographic form by utilizing a combination of our holographic digital

twin software, digital content, spatial data-driven data science, holographic digital cloud algorithm, and holographic 3D capture technology.

Our holographic digital twin technology and resource library have the potential to become the new norm for the digital twin augmented

physical world in the near future.

We are also a distributer of holographic hardware and generates revenue through resale.

We provide a broad range of holographic technology services in the holographic industry.

Our holographic solutions and technology services are capable of meeting the complex and multi-faceted holographic technology needs of our customers.

Our cutting-edge holographic LiDAR system is used in ADAS, allowing equipped automobiles and other vehicles to capture high-resolution 3D holograms and achieve ultra-long detection distance.

Our holographic LiDAR solutions allow the automotive industry to break free from bulky mechanical rotating scanning systems and traditional sensors to solid-state LiDAR sensor with more components and smaller dimensions that can meet the demanding performance, safety, and cost requirements of our customers.

Our holographic ADAS provide a rich and safe set of autonomous control programs for vehicles.

The point cloud algorithm for holographic LiDAR can detect and track obstacles, thereby avoiding and mitigating automotive collisions with both moving and static objects, including pedestrians and other vulnerable road obstacles and vehicles.

By predicting and monitoring collision, our holographic LiDAR system calculates effective collusion mitigation plans by comparing the trajectory of an object with the trajectory of the moving vehicle to identify and avoid emergency situations while providing optimal comfort and safety to the driver.

Due to the effectiveness, our holographic ADAS are being deployed at an increasing rate in the automotive industry.

As automakers and leading mobile and technology companies seek comprehensive digital perceptual solutions to accelerate and scale production for their autonomous driving programs, we believe that our holographic LiDAR can take advantage of this market trend to achieve excellent solutions for mass production of large-scale autonomous driving programs and vehicles.

Moreover, we are aligned to the rapid development of the Internet of Things, machine learning, and artificial intelligence (“AI”).

Our holographic LiDAR solution is not only applicable to the field of intelligent vehicles but also applicable to robots, unmanned aerial vehicles (“UAVs”), advanced security systems, intelligent city development, industrial automation, environment, and mapping.

Our holographic digital twin technology resource library is built upon extensive holographic data modelling, simulation and bionics technology, culminating in a comprehensive holographic digital twin resource library which holographic developers and designers count on.

Our digital twin resource library integrates holographic bionics and simulation digital models, as well as various holographic software technologies about holographic spatial positioning, dynamic capture, holographic image synthesis, which are open to all our users.

We also provide customized holographic digital twin technology integration services for enterprise customers with unique commercial demands.

We provide comprehensive, high-quality holographic technology services which include the following:

Holographic ADAS

Our holographic ADAS adopt self-developed holographic LiDAR module and vertical-cavity surface-emitting laser (“VCSEL”) integrated circuit (“IC”) semiconductor, integrated with holographic onboard intelligent vision system and innovative design of automotive IC customization scheme, meanwhile embedded with self-developed holographic image and control software.

Holographic ADAS mainly consist of three systems:

(1) the environmental perception system responsible for environmental recognition, namely holographic LiDAR;

(2) the central decision-making system responsible for computing and analysis, the core of which is the visual recognition technology based on computer graphics, where we integrate holographic image processing technology;

and (3) the underlying execution system which is responsible for the execution control and the execution is mainly carried out by the hardware with functions of braking and steering.

Our holographic ADAS integrate holographic LiDAR front-view, surround-view, and internal-view cameras, which can monitor the environment inside and outside the vehicle in real-time.

It can realize the functions of navigation, lane departure warning system, forward-collision warning system, blind-spot monitoring system, lane change assistance, automatic parking system, lane-keeping system, and driver state monitoring system.

It can provide different technical options according to different customer needs.

Compared with traditional ADAS, the holographic ADAS we provide have obvious advantages such as better perceptual stability, lower costs, and higher precision.

Currently, we are the direct supplier for certain automobile brands, as well as the secondary supplier of many automobile brands and the product supplier of rear-loading market.

We believe we still has much growth space in the automobile ADAS field and autonomous driving field based on holographic LiDAR.

Holographic LiDAR Technology Applications

Our holographic ADAS adopt a “holographic LiDAR technology solution” in the vehicle sensing layer.

There are several core advantages in our technical application:

3D model data model of ambient environment using point cloud data, high-precision and low-latency positioning, and obstacle detection and identification by classifications.

In the process of assisting driving, the data obtained through the holographic LiDAR is combined with the high-precision map.

After the point cloud data has completed locating the surrounding environment, real-time route guidance and rendering are carried out according to the position of the vehicle, and the sensor-based position estimation technology is optimized.

By reading the vehicle sensor information and combining the human body motion model and other methods, the corresponding position is calculated and then used for decision-making in the real scene with the help of in-depth computing power analysis.

Our holographic LiDAR technology is significantly different from the traditional technology of space environment construction, mainly because of the following factors:

The VCSEL IC semiconductor application scheme developed by us is simpler in structure and is capable of improving resolution without increasing the size of the sensor or complexity as compared with light-emitting diode (“LED”) infrared light sources used by other 3D camera systems.

Our VCSEL IC semiconductor application scheme is also smaller, consumes less power, and is more accurate in distance detection.

Exclusive technology solution of holographic image algorithm.

Multiple holographic LiDAR sensors with different specifications and performances are deployed around the vehicle, and the holographic road conditions around the vehicle can be sensed immediately when the system is started;

it can not only avoid the forward collision, but also avoid the lateral and backward movement danger in time by obtaining more comprehensive spatial information.

Exclusive design of LiDAR holographic point clouds algorithms architecture.

Through the holographic technology, the perception algorithm software provides the operable data efficiently, realizes the line-by-line 3D scanning, improves the performance of holographic LiDAR efficiently, and obtains more efficient information feedback.

Exclusive design of holographic LiDAR sensor chip.

While maintaining the sensor advantage through advanced sensor development applications, with the self-developed holographic LiDAR module as the core of the sensing system, we can achieve the balance between high performance, real-time, gauge level stability and low cost, so as to improve the stability and reliability of the equipment.

Exclusive Technical Solution of Holographic Image Algorithm

Our holographic LiDAR combines holographic image processing technology, which enables ADAS to provide real-time, all-weather, and holographic perception of the surrounding environment.

Holographic LiDAR gives us the following advantages:

Our holographic LiDAR has more efficient image processing ability and more accurate and rapid recognition ability, detects the surrounding environment with laser pulses, and combines with software to draw holograms, so as to provide enough environmental information for autonomous driving vehicles, and to perform static recognition of intelligent holographic vision and dynamic recognition of objects and signs.

Our holographic LiDAR has a high azimuth resolution, which means it is capable of distinguishing two or more objects aligned along the direction of measurement and can accurately detect the distance and positions of the surrounding obstacles.

In addition to the surrounding vehicles and environment, it can also detect objects with low radio wave reflectivity, such as white lines, signs, and trees.

Our holographic LiDAR is capable of accurate and rapid recognition, which can improve the accuracy and quality of ADAS for the collection of information regarding the surrounding environment, so that vehicles can clearly process the road condition information, and provide safety warnings and other information, which can further promote the intelligent upgrading of the ADAS in the market.

Our holographic LiDAR can enhance the redundancy of the sensing system and supplement the missing scenes of millimeter-wave radar and camera.

Holographic LiDAR has a long detection range, and its measurement accuracy is ten times higher than that of millimeter-wave radar.

It can accurately depict the 3D shape of objects because millimeter-wave radar and ultrasonic radar are limited in accuracy and therefore cannot distinguish slow-moving people from other static objects.

High precision and 3D modelling ability are the core advantages of holographic LiDAR over other sensors.

Exclusive Design of LiDAR Holographic Point Clouds Algorithms Architecture

Our holographic LiDAR adopts an exclusive holographic point cloud algorithm architecture, aiming at the efficient implementation of digital signal processing algorithms, enabling our holographic LiDAR to achieve excellent performance on all detectable targets.

Our algorithm design scheme for holographic LiDAR is capable of extensively developing and verifying the results of real-world road data, including road types, geographic and environmental conditions, etc.

The proprietary algorithm architecture of our holographic LiDAR has the following advantages:

Exclusive algorithm architecture can enable the car sensing software to call the holographic LiDAR point cloud data in real-time.

The custom-developed optimization detection algorithm can enable the holographic LiDAR to achieve long-distance detection.

The exclusive detection algorithm can realize high-density detection at low speed and accelerate the computational-intensive processing.

Accurate distance and speed measurements can be made throughout the entire field of view.

High confidence detection and reliable point cloud data can be achieved to ensure a low false alarm rate.

LiDAR technology can generate millions of to tens of millions of point clouds per second, while unprocessed point clouds are disordered and lack color and texture information, which is impractical for application.

Our holographic LiDAR algorithm can denoise, simplify, calculate in key points, align, position, identify, and extract point cloud, and conduct accurate digital holographic three-dimensional reconstruction.

We believe that the digital signal processing algorithm in our holographic LiDAR technology can achieve the goal of high performance and low power consumption.

The solution can operate in a variety of environmental conditions and meet the strict requirements of automotive safety and production safety.

Proprietary Holography LiDAR Sensor Chip Design

Our proprietary holographic LiDAR sensor chip design solves key hurdles to the wide adoption of automotive LiDAR based on traditional laser scanning technology.

Low power consumption:

Low power consumption and small size can be applied to all types of vehicles, with the potential to promote mass-market adoption.

No interference:

By carrying a unique feature for each beam, our holographic LiDAR can block any power source without a unique feature, so that it is not interfered with by other LiDAR and sunlight.

High sensitivity:

Holographic LiDAR is high in sensitivity and low in energy consumption.

High dynamic range:

When measuring highly reflective objects such as traffic signs on the road, holographic LiDAR is not easily affected by the noise observed with traditional techniques.

Higher sensitivity in severe weather:

Holographic LiDAR provides better performance during bad weather by using continuous transmission of laser beam instead of short pulse in traditional LiDAR, and adapts to complex environment such as rain, snow, fog, dust, strong light, low illumination, etc.

Instantaneous measurement of speed:

Holographic LiDAR can directly measure the instantaneous velocity of each pixel by measuring the Doppler effect caused by the dynamic motion of the object.

Laser safety:

Because of the low power continuous beam, holographic LiDAR has better laser safety than the traditional LiDAR method which needs high power laser pulse.

In the field of LiDAR, we believe that there is little room for image simulation technology to improve in the future.

In contrast, we expect that our holographic LiDAR will grow exponentially in the next few years.

The application prospect of holographic LiDAR is very broad.

Currently, it can be applied to autonomous driving and advanced driving assistance, etc.

With the development of 5G and AI technology, our technology may gradually popularize robots, UAVs, advanced security systems, smart cities, industrial automation, environment and surveying and mapping and other industries in the future.

Holographic Vehicle Intelligent Vision

In the holographic ADAS, we provide users with better on-board intelligent visual experience.

The holographic vehicle intelligent vision system, equipped with advanced sensors, controllers, actuators, communication modules and other equipment, can assist the driver in controlling the vehicle more conveniently through the holographic panoramic real-time navigation system, holographic look around system and holographic monitoring system.

Our holographic ADAS can realize the following functions in the vehicle intelligent vision system:

Holographic panoramic real-time navigation system, which takes advantage of holographic LiDAR to create colorful real-time virtual objects by using the maximum field of vision when collecting the surrounding environment.

The system realizes the special functions of holographic stereo and real-time dynamic centimeter-level navigation.

Holographic look around system, including 3D look around as part of the autonomous visualization system (“AVS”), night vision system (“NVS”), panoramic look around system.

The advantage of holographic look around system is to project the four images collected by holographic LiDAR and other sensors onto a three-dimensional display model and enable the view roaming switch with the help of graphics processing units (“GPUs”) to avoid the virtual edge.

The holographic look around system can bring the driver more visual field and more viewing angle.

Through the holographic LiDAR technology, we reconstruct the scene around the vehicle in 3D and combine it with the virtual vehicle model in the same 3D coordination system by algorithm so as to construct a holographic vehicle intelligent vision system that is closer to the real world and provide accurate scene presentation for the driver to observe the environment.

The application of holographic vehicle intelligent vision enables the driver to have overall control over the surrounding environment of the car, which can not only effectively prevent the occurrence of reverse rolling accidents, but also avoid the possible events such as scraping bumper and wheel hub.

In addition, for the information collected in real-time, the holographic look around system can recognize the object and send out early warning through the deep learning algorithm to assist the driver to drive safely.

Holographic monitoring system, including driver monitoring system (“DMS”), lane departure warning system (“LDWS”), and front vehicle collision warning system (“FCWS”).

We use the advanced patent technology in face recognition, combined with the holographic image acquisition technology.

We have developed the advanced DMS for driver fatigue driving, which collects driver video through image sensor and then uses the algorithm to identify and locate the driver’s face and eyes.

Through the analysis of the eye image features, the warning is issued.

Our technology overcomes the defects of traditional recognition methods based on machine vision, which are easily interfered by glasses / sunglasses and other objects, improves the accuracy of driver’s eye closure judgment, and further improves the accuracy of fatigue driving judgment with better adaptability.

In addition to early warning driving safety, this function can also be used to protect the property safety and payment safety of vehicles.

When the system identifies an unregistered suspicious person on board, it can trigger an alarm in the cloud and synchronize the suspicious person’s face information to the cloud.

In addition, our LDWS, by telling the driving direction of the vehicle and the continuation direction of the traffic line, will issue a warning when the vehicle deviates from the lane line and the driving direction crosses the traffic lines on both sides.

Our FCWS analyzes the shadow and contour features of vehicles in front of the road in real-time to locate the position of vehicles, and then calculates the estimated collision time according to the speed of the vehicle and the distance from the front vehicle, so as to determine the potential collision risk and issue an early warning.

With the increasing demand for autonomous driving, the demand for the application of holographic LiDAR in ADAS also increases.

We understand that the most effective autopilot solution is perceptive and visual, and can provide the end consumers with complete solutions through the original equipment manufacturer (“OEM”).

In order to ensure the highest efficiency of products, we cooperate with automotive IC manufacturers, which can not only achieve customized solutions but also provide customers with universal solutions.

We make use of holographic LiDAR in our products in a wide range of driving environments to enhance the perception capability and carry out intelligent holographic image recognition for the surrounding environment such as passing vehicles, pedestrians, lane lines, traffic signs, traffic lights, etc., so as to provide drivers with a series of driving safety assistance, such as front vehicle distance monitoring, collision warning, pedestrian warning, lane departure warning, front vehicle start warning, traffic light reminder, etc.

Our product portfolio of holographic ADAS includes sensor hardware and perception and decision-making software to improve existing vehicle capabilities and achieve a higher level of vehicle automation for consumer and commercial applications.

Other Integration Service of Holographic Technology

The integration service of holographic technology is constructed by combining hardware such as holographic dedicated server, holographic workstation and holographic laser projector with holographic projection technology, holographic intelligent visual analysis technology, holographic distributed algorithm and other holographic technologies.

The holographic technology and intelligent visual analysis technology are used to identify and measure objects and generate holographic images.

Pursuant to customer needs, we provide customized holographic digital twin technology integration services.

Based on holographic technology, combined with the resource library service capabilities of multi-algorithm, multi intelligent scene and data processing, we help customers realize the industrialization application landing from holographic basic hardware service to holographic algorithm optimization, and build a holographic digital cloud resource library technology system centering on holographic view intelligence, holographic 3D intelligence, holographic multi-dimensional intelligence, holographic intelligent control, etc.

Holographic digital cloud resource library technology uses distributed cloud computing to achieve the optimal scheduling of software and hardware.

Holographic digital technology integration service adopts distributed data storage and algorithm, uses multiple storage servers to share the storage load, and uses location server to locate the storage information, which not only improves the reliability, availability and access efficiency of the system, but also is easy to expand, minimizes the unstable factors introduced by general hardware, and ensures the efficient operation of the customer system.

In addition, our holographic technology integration service not only provides hardware and software services, but also reserves rich holographic digital content to meet the needs of different customers.

In the integration service of holographic digital twin technology, we adopt the architecture specially designed for graphic processing to support holographic 3D image processing.

we provide customers with efficient holographic information processing function and high-performance graphics, image processing function and networking function.

Our holographic digital twin technology integration services can be applied to communication, computer-aided analysis, biomedicine, architectural design, urban planning, computer-aided manufacturing, and holographic engineering design and application, etc.

Holographic digital technology integration service provides users with holographic data acquisition, holographic virtual space construction, holographic digital content editing, holographic digital effect production, holographic virtual digital control and other functions.

Through holographic digital processing of information content, holographic digital twin effect is displayed to end-users.

We are also a distributer of holographic hardware and generates revenue through resale.

Hardware products include computer chips, network server, and certain parts and accessories of holographic products.

We order holographic hardware from vendors and resell to our customers.

Although gross profit for hardware products is relatively low, we intend to run the business line through sheer volume.

We have strong competitive advantages by having barging power against our vendors and pricing power on our customers.

Although there is an increase on unit cost of hardware chip products during the global shortage of chip products, with our barging power against vendors, we are still able to avoid significant price adjustments.

Holographic Digital Twin Technology Service

Holographic digital twin technology is an effective means to realize the interaction and integration of manufacturing information world and physical world.

Holographic technology is used to realize the interaction and cooperation between the virtual world and the real world, that is, the virtual entity in holographic state dynamically maps the state of physical entity in real-time.

The control effect is verified by simulation in virtual space, and the insights generated are fed back to physical assets and digital processes, forming the closed loop of holographic digital twin.

Holographic digital twin technology puts forward requirements for terminal equipment such as display terminal equipment, all kinds of holographic images and sound acquisition equipment to be more interactive, more immersive, and clearer, which puts forward higher requirements for data transmission capacity and display technology of hardware equipment.

After years of development, we have accumulated a wealth of technologies.

Through the application of holographic, augmented reality (“AR”) / virtual reality (“VR”) and other technologies in the digital world, the physical world can be completely reproduced, achieving the integration of virtual and real, and realizing the interaction with physical entities.

Our holographic digital twin technology service is a human-computer interaction technology characterized by immersive experience, combined with the digital twin architecture to provide support for in-depth information interaction and collaboration among virtual entity, physical entity and human.

Holographic Digital Twin Technology Resource Library

At present, our holographic digital twin service combines different customer needs to create our holographic digital twin technology resource library, which provides holographic development and design personnel with holographic digital twin resource library services, and also provides customized holographic digital twin technology integration services for enterprise customers with holographic digital twin technology needs.

The resource library includes holographic bionics and simulation digital models, as well as various holographic software technologies about holographic spatial positioning, dynamic capture, holographic image synthesis, etc., which are open to developers.

In the resource library, we mainly provide holographic simulation and bionic digital model services and holographic software development kit services for developers.

Holographic simulation and bionic digital model service

We have one of the largest professional holographic digital content resource libraries in China.

We have thousands of holographic digital models, including natural, scientific, space scene and other types of holographic simulation and bionic digital models, providing holographic digital model services for customers in different industries.

We have a professional technical team to provide these services for users, to realize the unique value of digital models, and to help different developers to solve different core problems through different holographic simulation and bionic digital twin models.

The ultra-high-definition holographic digital twin model provided by us can be directly used in holographic scenes, which reduces the development cost for holographic digital twin application developers and makes more sophisticated and creative holographic applications.

Holographic Software Development Kit Service

Our holographic SDK service is a software toolkit specially developed for hologram data processing.

Our customers can use the holographic SDK through our open application programming interface (“API”).

Without the need to spend a lot of time to develop the holographic data software module, our customers can spend more energy and time on the core and professional part of their service to better serve their customers.

We also upgrade and update our holographic SDK regularly according to the market demand.

Holographic SDK provides services such as holographic image processing, holographic data modeling and holographic special effects for developers of holographic digital twin technology, as well as various data services for developers of holographic digital content and software.

Our holographic SDK is equipped with efficient holographic image processing technology, which can identify all kinds of holographic images, including real-life holographic 3D objects.

Users can select the required holographic SDK function to reproduce the identified object or use the identified object to construct the holographic space.

provide comprehensive and powerful holographic SDK services for our customers.

Our holographic SDK services include 65 software kits

and five function modules, including holographic data acquisition, holographic virtual space construction, holographic digital content

editing, holographic digital effect production, and holographic virtual digital control.

With its rich functions, our holographic digital

twin technology resource library can provide the optimal convenience and technical support for holographic digital twin technology developers,

Holographic display SDK, which provides a simple API for developers.

Application developers only need one command to convert images into holograms.

Holographic projection effect SDK, which can produce many special holographic effects and project virtual screen effects in the air.

The holographic digital model SDK, which provides developers with models of people, animals, plants and vehicles in 3D scenes, to improve rendering speed.

Our holographic SDK can simulate tactile feedback information, force feedback information, the movement of the observed object and other aspects of holographic data acquisition.

The holographic virtual space is constructed through the holographic scene map switching, holographic scene building and holographic 3D geographic information.

The digital content of hologram is edited by dynamic holographic image processing, image merging and hologram correction.

Through the control system of animation glare system, dynamic glare effect and dynamic conversion, the holographic digital effect is produced.

The holographic virtual digital control function is realized by light field dynamic fusion control system and holographic digital display software.

Our holographic SDK can effectively collect and process data, realize the function of customer needs, more accurately analyze and meet user needs, and improve the business efficiency and performance of customer enterprises.

Our Competitive Strengths

We believe that the following competitive strengths contribute to our success and differentiate us from our competitors:

Leading holographic technology service provider with proprietary technology protected by comprehensive intellectual property rights

We are one of the leading holographic digitalization technology service providers in China in terms of total revenue and the number of total intellectual property rights, which allows us to stay in the forefront of customers’ demands.

Leverage the significant market position, our revenue growth keeps increasing.

For the years ended December 31, 2021 and 2022, the revenues of our holographic solutions and technology services were $56.3 million and $72.5 million, respectively, representing an annual growth of 28.8%.

Scalability culminating from broad and diverse customer base and alignment with stable strategic relationships with major industry participants

As one of the first companies on the market to enter into the rapidly evolving holographic technology industry, we are capable of taking advantage of our mature holographic technology service scheme to further reduce the overall costs of holographic technology services to our customers and to realize the large-scale application of holographic technology service.

We have continuously invested in holographic technology, talented personnel, and marketing, which enables us to build up a solid brand image among our customers and seize a considerable market share.

We have also established exceptional marketing channels and rich resources to attract and interact with both upstream and downstream industry participants.

Rooted in deep understanding of local market dynamics, our accurate marketing positioning and corresponding marketing capacity have conceived a strong brand and expanded the coverage of our channels, further securing our market position.

Strong R&D capabilities with leading innovations in the holographic technology services industry

believe that we are well-positioned to capture the growth of China’s holographic technology industry.

We intend to strengthen and

further secure our market leading position by reinforcing R&D development to continuously drive innovation in holographic technology,

including innovations in holographic LiDAR technology, intelligent holographic vision, and holographic digital twin technology.

December 31, 2022, we owned six trademarks, 22 exclusive rights of integrated circuit layout designs, 312 holographic software copyrights,

183 holographic patents, and 1,695 holographic content copyrights in China.

Leading holographic technology professionals led by an experienced and visionary management team

have a seasoned management team that is well experienced in China’s information technology industry.

With a focus on research and

development, operation and management, and human resources, the team is led by Mr.

Guohui Kang, who has been serving as our director

and chief executive officer since 2016 and as our director and chief executive officer since September 2022, and supported by an

exceptional R&D team staffed by 101 full-time research and development team members.

Our core staff generally have many years of

working experience in areas such as computer, software, computer graphic processing, data algorithm, and neural networks.

the forefront of technological development and focusing on R&D, we retain a stable team of exceedingly qualified professionals specialized

in holographic technology service, holographic LiDAR application, and holographic digital twin technology.

Strong culture and values driving the sustainable and healthy environment

We adhere to our corporate culture and values to nourish a sustainable corporate environment and attract talented team members.

Our slogan is “customer oriented — nurture cooperation — win-win achieved.” We also believe that customers’ demands determine the corporate strategy and development orientation, and innovation drives core competencies.

Guided by such values, we have successfully built up strong and long-term relationships with our customers and continuously optimized our talent pool and the comprehensive quality of our team members, all of which have contributed to our sustainable and rapid development.

Our Growth Strategies

We plan to implement the following strategies to achieve our mission and further grow our market position:

We will continue to expend significant resources in the research and development of holographic technology

Research and development of in-demand technology combined with sustained output and continuous innovation sets the foundation of our market competitiveness.

We endeavor to strengthen our market-leading position by further increasing investments in research and development, retaining talented individuals in the field of holographic technology, holographic LiDAR systems, and computer image processing for the purpose of expanding the range of proprietary technology and IP rights.

More specifically, we are focused on developing our autonomous driving, 5G, AI, and machine learning technologies for the purpose of building a rich product line, and innovative and technologically leading services.

To align with the development of the holographic ADAS industry, we aim to provide strong support for businesses in the field of autonomous driving.

Our development prospectus in ADAS includes hardware, software, and solutions upgraded by way of continuously developing new iterations of ADAS products and services through stepping up efforts in research and development.

To achieve this end, we intend to further expand research and development capabilities and efforts in holographic digital twin services, and further upgrade our existing holographic software development kit (“SDK”), software, and holographic content resource library.

We plan to promote the implementation of holographic technology in broader mass market

While holography continues to proliferate, we believe the holographic SDK and LiDAR market remains underpenetrated both in China and globally.

Based on holographic technology services, we will seize the opportunity of the development of the internet information technology industry in the new era and give full play to our leading advantages in talents, technology, and in-depth cooperation with industry partners and customers.

Our holographic technology solutions could not only upgrade traditional industries, but also be implemented in newly emerging industries due to our deeply rooted understanding of technological transformation.

Specifically, we will promote the wide application and development of holographic technology services in automotive electronics, digital twin and other fields and help the intelligent upgrading of related industries to realize the sustainable, rapid, and healthy development of our business.

We will continue to cooperate closely with the upstream and downstream of the industry chain

Focusing on organic business growth, we will pay close attention to the demand for new technology throughout the industries in which we operate.

Through the long-term and close cooperative relationship established with the partners in the industry chain, we seek to develop and deploy new technology ahead of customers’ demands so that we can quickly synergize with both upstream and downstream industry partners to identify and devise solutions to potential opportunities at an early stage, and jointly solve key hurdles along the process so that the new technological solutions can be commercialized in the shortest time possible.

We will continue to develop and cultivate talented individuals

We have always regarded our talented team members as our most valuable resource.

As a key driver to enterprise development, we have established an effective personnel training system and will continue to improve and upgrade such system to enhance its effectiveness.

We will continue to build and promote core competencies of our employees through internal training, internal competition, external communication, and other effective means.

In addition, we will seek to establish and test more effective incentive mechanisms, to actively create a working environment conducive to the development of our personnel, and to improve the cohesion and centripetal force of our employees, corporate culture, and business philosophy, so as to attract and retain more competitive talents.

We have developed powerful, cutting-edge holographic technologies.

Holographic Digital Technology

Holography refers to the expression of all information of things.

The advantage of holography lies in the expression of holographic space.

It is another carrier of information in society.

Holographic display technology is different from other traditional 3D display technologies in that it does not rely on any external devices like 3D glasses and helmets.

Comparatively speaking, holographic display technology has the advantages of unlimited viewing angle, omni-directional viewing and no difference from the real object, and it can also interact with holographic imaging in-depth, which is a new breakthrough in touch sensing interaction and meets the goal of natural reality and three-dimensional visual effect.

Holographic digital technology is the combination of computer technology, holographic technology, and electronic imaging technology.

It records holograms through electronic components and realizes real-time image processing.

At the same time, the digital image can be quantitatively analyzed by computer, the intensity and phase distribution of the image can be obtained by calculation, and the superposition of multiple holograms can be simulated, so that the recording and reproduction of holograms can be truly digitized.

As communication technology enters the 5G era, the rapid development and popularization of cloud computing, big data, AI, and other technologies have promoted the development of holographic digital technology.

we believe that holographic digital technology will become the technical foundation of the next generation of the Internet.

We believe that the next generation of Internet will be holographic space Internet and hopes that through our continuous attempts and breakthroughs in holographic technology, we can lay a foundation for wide adoption by the mass market.

We believe that the combination of holographic technology and digitization is of great significance in promoting the development of social economy and culture.

With the development of technology, the application of holographic digital technology is becoming more market oriented.

For example, in the automotive field, the holographic digital technology is applied to the navigation, and the navigation is projected on the front window, so that the driver can clearly know the route without bending his head, which greatly improves the driving safety.

The application in the medical field is also of great practical significance.

The use of holographic digital technology can record the vibration and deformation of organs in the human body in a three-dimensional way, which can be measured by the interference fringes on the hologram.

The second exposure technology of holographic LiDAR can also analyze the changes of human organs, so as to find out the location and size of lesions.

For example, the use of holographic digital technology can detect the location of malignant tumors and contribute to the early diagnosis and treatment of cancer.

Because of the non-destructive property of digital hologram, it is considered to be the best method to detect human internal organs.

Of course, digital hologram technology is also widely used in clinical examination.

In addition, in the field of aerospace, holographic digital technology also has broad application prospects, such as the use of holographic digital technology can simulate the real outer space for real perception training, which brings great significance to the training of astronauts.

With the continuous expansion of the application field of holographic digital technology, we believe that in the future, holographic digital technology will become an irreplaceable part of society.

Holographic LiDAR Technology

LiDAR is a combination of laser, global positioning system (“GPS”) and inertial navigation system (“INS”) technology and is used to obtain point cloud data and generate accurate digital three-dimensional model.

Laser itself has a very accurate ranging capability and its ranging accuracy can reach several centimeters.

In addition to the laser itself, the accuracy of LiDAR system also depends on the synchronization of laser, GPS, and inertial measurement unit (“IMU”).

Holographic LiDAR is an active measurement device that detects the precise distance between the object and the sensor by emitting a laser beam, including a transmitting unit, a receiving unit, a scanning unit and a data processing unit.

The distance is determined by measuring the time difference and phase difference of the laser signal, and the angle is measured by horizontal scanning.

According to these two parameters, a two-dimensional polar coordinate system is established, and then the three-dimensional height information is obtained by different pitch angle signals.

With the development of commercial GPS and IMU, it has been widely used to obtain high-precision data from mobile platforms (such as automobiles) through LiDAR.

LiDAR scanning can obtain point cloud data, which can be used to create 3D computer-aided design (“CAD”) models for manufacturing parts, quality inspection, diversified vision, cartoon production, 3D drawing, and mass communication tool applications.

In addition, it can be used in the construction of digital 3D City, 3D terrain acquisition, 3D cultural relic reconstruction, cadastral survey, power inventory and other industries that need surveying and mapping modelling.

Holographic Intelligent Vision Technology

Holographic intelligent vision refers to the machine vision that uses camera and computer to simulate human vision to recognize, track and measure the target, and to further process the image through recognition and analysis, so that the computer processing becomes more suitable for human eyes to observe or transmit to the instrument for detection.

Holographic intelligent vision plays an important role in the establishment of artificial intelligence system to obtain “information” from images or multidimensional data.

Holographic intelligent vision is the science of using computers to imitate human visual systems, which enables computer with the ability to extract, process, understand and analyze images and image sequences similar to human beings, and realize the perception and recognition of the three-dimensional scene of the objective world.

In the fields of autopilot, robot, intelligent medical and so on, it is necessary to extract information from the visual signal by holographic intelligent vision technology and carry out high-precision processing.

Holographic intelligent vision technology used in holographic technology service includes holographic face recognition, holographic object, and scene recognition.

Holographic SDK Technology

Holographic SDK technology can collect holographic data through tactile feedback information, force feedback information and the movement of the observed object.

The holographic virtual space is constructed by scene map switching, scene building and 3D geographic information;

Holographic digital content editing is carried out by means of dynamic image processing, graphic display, and rectification.

Through the control system of animation glare system, dynamic glare effect and dynamic conversion, the holographic digital effect is produced, and the holographic virtual digital control function is realized by light field dynamic fusion control system and holographic digital display software.

holographic SDK services include holographic data acquisition, holographic virtual space construction, holographic digital content editing,

holographic digital effect production and holographic virtual digital control module, and 65 software kits, which can meet the current

market demand for holographic software technology application, software development and other aspects.

We will also continue to develop

new functions according to the needs of customers to enrich the holographic SDK library.

Through years of technology accumulation and

long-term good relationship with customers in the industry, we believe that our holographic SDK technology will continue to maintain

a leading edge.

Research and Development

of December 31, 2022, our research and development team consisted of 68 full-time employees responsible for the design and development

of high-quality holographic products and services.

They are experienced in holographic basic technology and hardware development.

The professional background of the research and development team covers a wide range of aspects, including computer, software, computer

graphic processing, data algorithm, and neural networks.

Such extensive and in-depth working experience empowers the team’s services

such as digital graphic lightweight, algorithm, data intelligence and image synthesis.

We have focused on and will continue to focus

on investment in our technology system.

Our research and development expenses were approximately $49.2 million and $22.8 million for

the years ended December 31, 2022 and 2021, respectively.

We are committed to continuously strengthening and updating our information technology infrastructure and compatible hardware according to our annual development plan and based upon our assessment of market demand.

The process of our self-development research and development is as follows:

(1) research and development personnel raise new ideas for research and development based on the market situation and customers’ needs to complete the investigation report and decision analysis;

(2) project approval and formulate product research and development plan;

(3) development of product technology;

(4) product testing and review;

(5) launching of new product;

and (6) promotion and application of the new product.

Intellectual Property

property rights are critical to our success and competitiveness.

We rely on a combination of patent, copyright, trademark, and trade

secret laws and restrictions on disclosure to protect our intellectual property rights.

As of December 31, 2022, we owned:

six registered trademarks in the PRC;

183 patents in the PRC, mainly involving virtual vision imaging, motion capture, image acquisition and other related technologies;

Layout design of

integrated circuit:

22 items in the PRC;

Software copyrights related to holography:

312 works of software copyrights related to holography in the PRC, including 65 core holographic functions SDK, which mainly involve holographic digital light field, panoramic display, virtual reality social simulation model application system, virtual reality human body model dynamic demonstration system, naked-eye 3D dynamic imaging control system, virtual reality standardization system, etc.;

Software copyrights related to virtual digital products:

1,695 items of virtual digital products and thousands of ultra-high-definition holographic models that have been established and are still increasing;

Under application:

183 model patents and 22 integrated circuit layout designs.

In addition to the foregoing protections, we generally control access to and use of our proprietary and other confidential information through the use of internal and external controls.

For example, we adopt and maintain relevant policies safeguarding our intellectual property rights through establishing an intellectual property management organization and specifying personnel for intellectual property protection, strengthening special training on intellectual property rights for employees, and establishing an intellectual property management system.

There are many other companies addressing various aspects/verticals of the holographic basic technology service market in China.

Our competitors are mainly holographic software providers, holographic content service providers, and participants in the holographic intelligent electronics field and the holographic intelligent vision field.

We compete in an emerging and competitive industry for the following factors:

quality of the basic holographic technology;

richness and compatibility of high-quality holographic content;

strength and reputation of brand;

ability to enhance existing services to meet user preferences and needs;

capability to continuously expand customer base;

ability to compete effectively with competitors.

We believe we offer a higher performance product, and we are capable to compete favorably and increase our market share.

Our ability to remain competitive bases upon the quality of our holographic content, the ability to innovate and rapidly respond to customer needs, as well as the capability of acquiring complementary technologies, products and businesses to enhance the features and functionality of our applications.

do not experience substantial seasonal fluctuations in our revenues and results of operations.

Sales and Marketing

We have formed a business model of “excellent technology research and development team + well experienced sales team.” A professional sales team, paired with advanced technology, enables us to maintain an advantageous position in the competition.

We are dedicated to deepening our relationship with existing customers, develop relationships with new and potential customers, and on exploring untapped business opportunities.

At the same time, we also emphasize on brand building and will establish a strong reputation and brand image by continuously producing high-quality technology services and contents.

We have provided holographic technology services for thousands of customers and has accumulated rich customer resources and diverse customer base in the industry.

We work closely with government agencies, automotive electronics manufacturers, and software/content developers, etc.

At present, we have a relatively well-established and comprehensive holographic technology service chain.

We have provided holographic technology services for numerous well-known and prestigious enterprises in the real estate, automobile, life insurance industries and so on.

Customers usually enter into framework service agreements with us, based upon which we will provide holographic technology services and receive corresponding product and service fees in return from the customers.

Our customer base grows fast.

The total number of customers grows with a growth rate of 11.8% from 2021 to 2022.

We maintain a diverse customer base and have one customer from whom revenues individually represents greater than 10% of the total operating revenues for the year ended December 31, 2022.

Our top ten direct customers make up 59.3% of total revenue for the year ended December 31, 2022.

We believe that our continuous attraction to and ability to retain large and medium-sized enterprise customers depend on our ability to meet their disparate needs as well as complex in-house deployment and integration needs.

We also leverage our comprehensive business portfolio to serve small and medium enterprises, aiming to improve customer satisfaction and expand cross selling and up selling opportunities.

have a diverse base of suppliers who view us as integral partners in the supply chain.

We have strong relationships with our suppliers

due to our market position, substantial purchasing scale, national footprint and rich customer resources.

We believe we are one of the

largest volume customers for many of our suppliers, leading to favorable purchasing arrangements regarding product availability, payment

terms and pricing.

Our size and scale, supplier relationships, and technical knowledge of products and services enable us to receive

favorable treatment.

Our largest single supplier represented 13.8% of expenditures in fiscal 2022, and our top ten suppliers represented

71.4% of total product expenditures during the same period.

We strategically conduct business with our top suppliers in order to optimize

our scale advantages, but we also have the flexibility to source the majority of our purchase from a number of alternate suppliers when

of December 31, 2022, we had 101 full-time employees and we did not have part-time employees.

All our employees are based in China.

following table sets forth the number of our employees as of December 31, 2022:

full-time employees

Research and Development

Business and Marketing

Administrative, Human Resources and Finance

Under the PRC law, we participate in various employee social security plans organized by municipal and provincial government for our PRC-based full-time employees, including pension unemployment insurance, childbirth insurance, work-related injury insurance, medical insurance, and housing fund.

We are required under PRC law to pay specified percentages of the salaries, bonuses, and certain allowances to the employee benefit plans for our PRC-based full-time employees on a monthly basis, with the maximum amount determined by the local governments in China.

We sign labor contracts and standard confidentiality and non-compete agreements with our key employees.

We believe that we maintain a good working relationship with our employees with no labor disputes.

None of our employees are represented by labor unions.

Applicable Government Regulations

Laws and Regulations Relating to Foreign Investment

According to the Provisions on Guiding the Direction of Foreign Investment, which took effect on April 1, 2002, industries in the PRC are classified into four categories:

“permitted foreign investment industries”, “encouraged foreign investment industries”, “restricted foreign investment industries” and “prohibited foreign investment industries”.

“Encouraged foreign investment industries”, “restricted foreign investment industries” and “prohibited foreign investment industries” are stipulated in the Catalog.

Industries which do not fall in any of these three categories are regarded as “permitted foreign investment industries”.

The Catalog is promulgated and is amended by the NDRC and the MOFCOM.

The Negative List, which was last amended on June 23, 2020 and subsequently enforced on July 23, 2020 by the NDRC and the MOFCOM and replace the Catalog, sets forth management measures for the market entry of foreign investors, such as equity requirements and senior manager requirements.

According to the Negative List, any internet cultural activities (except for the provision of music) is a foreign investment prohibited industry, and foreign-invested shares of value-added telecommunications services must not exceed 50% (excluding e-commerce, domestic multi-party communications services, store and forward services and call center services) of the business.

An enterprise which establishes, operates and manages within the Chinese territory is subject to the PRC Company Law last amended on October 26, 2018.

The PRC Company Law is also applicable to a foreign investment company.

Nevertheless, where there are other special laws relating to foreign investment, such laws shall prevail.

The procedures for the establishment of a wholly foreign-owned enterprise, the verification, registration and approval procedures, registered capital requirements, foreign exchange restrictions, accounting practices, taxation and labor matters are subject to the Law on Wholly Foreign-invested Enterprises of the PRC, which was last amended on September 3, 2016 and subsequently enforced on October 1, 2016 and the Implementation Regulations for Law on Wholly Foreign-invested Enterprises of the PRC, which was last amended on February 19, 2014 and subsequently enforced on March 1, 2014 and Provisional Administration Measures for the Registration of the Formation and Changes of Foreign Invested Enterprises (the “Measures”) which was last amended on June 29, 2018 and subsequently enforced on June 30, 2018.

According to the Measures, where the incorporation of foreign-invested enterprises does not fall within the scope of the Negative List, such enterprises shall file and submit the record-filing information on the incorporation of foreign-invested enterprises simultaneously when they go through the registration procedures for incorporation.

Within the record-filing scope of the Measures, in the case of a change of basic information of the foreign-invested enterprises or their investors, a change of equity (shares) or cooperation interest of the foreign-invested enterprises, merger, division or dissolution, mortgage or transfer of foreign invested enterprise’s property or rights and interests to others and other matters, the foreign-invested enterprise shall file the relevant documents online within 30 days upon occurrence of such changes via the comprehensive administrative system.

On December 30, 2019, the MOC and the State Administration of Market Regulation issued the Measures for the Reporting of Foreign Investment Information, which came into effect on January 1, 2020 and replaced the Measures.

Since January 1, 2020, for foreign investors carrying out investment activities directly or indirectly in China, the foreign investors or foreign-invested enterprises shall submit investment information to the commerce authorities pursuant to these measures.

On March 15, 2019, the NPC approved the Foreign Investment Law, which became effective on January 1, 2020, and replaced the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprises Law.

On December 26, 2019, the State Council issued the Regulations on Implementing the Foreign Investment Law of the PRC, which came into effect on January 1, 2020, and replaced the Regulations on Implementing the Sino-Foreign Equity Joint Venture Enterprise Law, Provisional Regulations on the Duration of Sino-Foreign Equity Joint Venture Enterprise Law, the Regulations on Implementing the Wholly Foreign-Invested Enterprise Law, and the Regulations on Implementing the Sino-foreign Cooperative Joint Venture Enterprise Law.

Under the Foreign Investment Law, the State shall implement the management systems of pre-establishment national treatment and negative list for foreign investment, according to which the treatment given to foreign investors and their investments during the investment access stage shall be not lower than that given to their domestic counterparts, and the State shall give national treatment to foreign investment beyond the negative list where special administrative measures for the access of foreign investment in specific fields is specified.

Besides, the State shall protect foreign investors’ investment, earnings and other legitimate rights and interests within the territory of China in accordance with the law.

The state will take measures to prompt foreign investment such as ensuring fair competition for foreign-invested enterprises to participate in government procurement activities, and protection of intellectual property rights of foreign investors and foreign-invested enterprises.

Industry Catalog Relating to Foreign Investment

Industries listed in the Catalog are divided into three categories:

encouraged, restricted and prohibited.

Industries not listed in the Catalog are generally deemed as constituting a fourth “permitted” category.

Establishment of wholly foreign-owned enterprises is generally allowed in encouraged and permitted industries.

Some restricted industries are limited to equity or contractual joint ventures, while in some cases Chinese partners are required to hold the majority interests in such joint ventures.

In addition, restricted category projects are subject to higher-level government approvals.

Foreign investors are not allowed to invest in industries in the prohibited category.

Industries not listed in the Catalog are generally open to foreign investment unless specifically restricted by other PRC regulations.

On March 15, 2019, the National People’s Congress adopted the Foreign Investment Law of the PRC, which became effective on January 1, 2020 and replaced three existing laws regulating foreign investment in China, namely, the Wholly Foreign-Invested Enterprise Law of the PRC, the Sino-Foreign Cooperative Joint Venture Enterprise Law of the PRC and the Sino-Foreign Equity Joint Venture Enterprise Law of the PRC, together with their implementation rules and ancillary regulations.

On December 26, 2019, the State Council issued the Regulations on Implementing the Foreign Investment Law of the PRC, which came into effect on January 1, 2020, and replaced the Regulations on Implementing the Sino-Foreign Equity Joint Venture Enterprise Law of the PRC, Provisional Regulations on the Duration of Sino-Foreign Equity Joint Venture Enterprise Law, the Regulations on Implementing the Wholly Foreign-Invested Enterprise Law of the PRC, and the Regulations on Implementing the Sino-Foreign Cooperative Joint Venture Enterprise Law of the PRC.

The Foreign Investment Law of the PRC 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.

However, since it is relatively new, uncertainties still exist in relation to its interpretation and implementation.

For example, the Foreign Investment Law of the PRC adds a catch-all clause to the definition of “foreign investment” so that foreign investment, by its definition, includes “investments made by foreign investors in China through other means defined by other laws or administrative regulations or provisions promulgated by the State Council” without further elaboration on the meaning of “other means.”

On June 30, 2019, the MOFCOM and the NDRC promulgated the Special Management Measures (Negative List) for the Access of Foreign Investment, or the Negative List, which took effective from July 30, 2019.

The Negative List expands the scope of industries in which foreign investment is permitted by reducing the number of industries that fall within the Negative List.

Foreign investment in value-added telecommunications services (other than e-commerce, domestic multi-party communications, store-and-forward and call center), including internet data center services, still falls within the Negative List.

On August 8, 2006, six PRC regulatory agencies, including the MOFCOM, the State-Owned Assets Supervision and Administration Commission, or the SASAC, the State Administration of Taxation, or the SAT, the SAIC, the CSRC, and the State Administration of Foreign Exchange, or the SAFE jointly adopted the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, which came into effect on September 8, 2006 and were amended on June 22, 2009.

The M&A Rules include, among other things, provisions that purport to require that an offshore special purpose vehicle formed for the purpose of an overseas listing of securities in a PRC company 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 its official website procedures regarding its approval of overseas listings by special purpose vehicles.

However, substantial uncertainty remains regarding the scope and applicability of the M&A Rules to offshore special purpose vehicles.

Our PRC subsidiaries are mainly engaged in providing technical services, which fall into the “encouraged” or “permitted” category under the Catalog.

Our PRC subsidiaries have obtained all material approvals required for our business operations.

Specifically, Our PRC subsidiaries engaged in holographic advertising business mainly provide holographic technical services to customers in the advertising industry.

According to the Regulations of the People’s Republic of China on Telecommunications promulgated by the State Council of the People’s Republic of China on February 6, 2016 (the “Regulations”), “value-added telecommunications services” refers to the provision of additional telecommunications and information services by using public network infrastructure.

In addition, the Classification Catalogue of Telecommunications Services (the “Classification”) annexed to the Regulations provides a list of telecommunications services that fall within the definition of “value-added telecommunications services.” Our holographic advertising service does not use public network infrastructure to provide additional services and is not within the list provided by the Classification, and accordingly does not fall into the category of “value-added telecommunications services” as governed by the Regulations.

Anti-money Laundering Regulations

The PRC Anti-money Laundering Law, which was promulgated by the Standing Committee of the National People’s Congress in October 2006 and became effective in January 2007, sets forth the principal anti-money laundering requirements applicable to financial institutions as well as non-financial institutions with anti-money laundering obligations, including the adoption of precautionary and supervisory measures, establishment of various systems for client identification, retention of clients’ identification information and transactions records, and reports on large transactions and suspicious transactions.

According to the PRC Anti-money Laundering Law, conducts of money-laundering includes dissimulating, concealing through various means the source and nature of gains and profits from drug offences, organized gangsterdom crime, terrorist activities, smuggling, corruption and bribery, disruption of financial order, and financial fraud.

Financial institutions subject to the PRC Anti-money Laundering Law include duly established policy banks, commercial banks, credit unions, postal saving organizations, trust investment companies, securities companies, futures brokerage companies, insurance companies and other institutions engaging in financial business as determined and published by the competent anti-money laundering administrative authorities of the State Council, while the list of the non-financial institutions with anti-money laundering obligations will be published by the State Council.

The PBOC and other governmental authorities issued a series of administrative rules and regulations to specify the anti-money laundering obligations of financial institutions and certain non-financial institutions, such as payment institutions.

The Guidelines jointly released by ten PRC regulatory agencies in July 2015, purport, among other things, to require internet financial service providers, including online lending information intermediaries, to comply with certain anti-money laundering requirements, including the establishment of a customer identification program, the monitoring and reporting of suspicious transactions, the preservation of customer information and transaction records, and the provision of assistance to the public security department and judicial authority in investigations and proceedings in relation to anti-money laundering matters.

The Interim Measures jointly issued by four PRC regulatory agencies in August 2016 require the online lending information intermediaries, among other things, to comply with certain anti-money laundering obligations, including verifying customer identification, reporting suspicious transactions and preserving customer information and transaction records.

The Custodian Guidelines issued by PBOC in February 2017 require the online lending platforms to set up custody accounts with commercial banks and comply with the anti-money laundry requirements of the relevant commercial banks.

In cooperation with our partnering custody banks and payment companies, we have adopted various policies and procedures for anti-money laundering purposes.

Regulations Relating to Overseas Listings

In August 2006, six PRC regulatory authorities, including the China Securities Regulatory Commission, or the CSRC, jointly adopted the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, amended in June 2009.

The M&A Rules, among other things, require that if an overseas company established or controlled by PRC companies or individuals, or PRC Citizens, intends to acquire equity interests or assets of any other PRC domestic company affiliated with the PRC Citizens, such acquisition must be submitted to the MOFCOM for approval.

The M&A Rules also require that an Overseas SPV formed for overseas listing purposes and controlled directly or indirectly by the PRC Citizens shall obtain the approval of the CSRC prior to overseas listing and trading of such Overseas SPV’s securities on an overseas stock exchange.

February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies,

or the Trial Measures, which will become effective on March 31, 2023.

On the same date of the issuance of the Trial Measures, the CSRC

circulated No.1 to No.5 Supporting Guidance Rules, the Notes on the Trial Measures, the Notice on Administration Arrangements for the

Filing of Overseas Listings by Domestic Enterprises and the relevant CSRC Answers to Reporter Questions on the official website of the

CSRC, or collectively, the Guidance Rules and Notice.

The Trial Measures, together with the Guidance Rules and Notice, reiterate the

basic supervision principles as reflected in the Draft Overseas Listing Regulations by providing substantially the same requirements

for filings of overseas offerings and listings by domestic companies, yet made the following updates compared to the Draft Overseas Listing

(a) further clarification of the circumstances prohibiting overseas issuances and listings;

(b) further clarification of

the standard of indirect overseas listings under the principle of substance over form, and (c) adding more details of filing procedures

and requirements by setting different filing requirements for different types of overseas offerings and listings.

Under the Trial Measures

and the Guidance Rules and Notice, domestic companies conducting overseas securities offering and listing activities, either in direct

or indirect form, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working

days following the submission of initial public offering or listing applications.

Based on our understanding of the current PRC laws and regulations, we reasonably believe that we currently are not be required to submit an application to the CSRC for the approval of our listing and trading on the Nasdaq.

However, there are substantial uncertainties as to how the M&A Rules will be interpreted or implemented in the context of an overseas offering, and its opinions summarized above are subject to any new laws, rules and regulations or detailed implementations and interpretations in any form relating to the M&A Rules.

Laws and Regulations Relating to Marketing Business

The Advertising Law of the PRC (the “Advertising Law”), which took effect on February 1, 1995 and was last amended on October 26, 2018, regulates contents of advertisements, codes of conduct for advertisers, and the supervision and administration of the advertising industry.

It also stipulates that advertisers, advertising operators, and advertisement publishers shall abide by the Advertising Law and other laws and regulations, be honest and trustworthy, and compete in a fair manner in advertising business.

According to the Advertising Law, if advertising operators know or should have known the content of the advertisements is false or deceptive but still provide advertising design, production and agency services in connection with the advertisement, they might be subject to penalties, including confiscation of revenue and fines, and the competent PRC authority may suspend or revoke their business licenses.

The Interim Measures for the Administration of Internet Advertising (the “Interim Measures on Internet Advertising”), which took effect on September 1, 2016, regulate advertising activities conducted via the internet.

According to the Interim Measures on Internet Advertising, advertisements published or distributed via the internet shall not interfere with users’ normal use of the internet.

For example, advertisements published on web page pop-up windows or in others forms shall be clearly marked with a “close” sign to ensure a “Click to close”.

No entity or individual may induce users to click on the contents of an advertisement through deception.

An internet advertisement publisher or advertising operator shall establish and maintain an acceptable registration, examination and file management system for its advertisers;

examine, verify and record the identity information of each advertiser.

The Interim Measures on Internet Advertising also require internet advertisement publishers and advertising operators to verify related supporting documents, check the contents of the advertisement and prohibits them from designing, producing, providing services or publishing any advertisement if the content and supporting documents do not match each other or the documentary evidence thereof are insufficient.

Laws and Regulations Relating to Information Security and Privacy Protection

Internet content in the PRC is regulated and restricted from a state security standpoint.

The Standing Committee of the National People’s Congress (the “SCNPC”) enacted the Decisions on the Maintenance of Internet Security, which took effect on December 28, 2000 and was last amended on August 27, 2009, to subject persons to criminal liabilities in the PRC for any attempt to (i) gain improper entry to a computer or system of strategic importance;

(ii) disseminate politically disruptive information;

(iii) leak state secrets;

(iv) spread false commercial information;

or (v) infringe intellectual property rights.

The Administration Measures on the Security Protection of Computer Information Network with International Connections, which took effect on December 30, 1997 and was last amended on January 8, 2011, prohibit using the internet in ways which, among others, result in a leakage of state secrets or a spread of socially destabilizing content.

The Provisions on the Technical Measures for the Protection of the Security of the Internet, which was promulgated by the MPS and took effect on March 1, 2006, require internet service providers to take proper measures including anti-virus, data back-up and other related measures, to keep records of certain information about its users (including users registration information, log-in and log-out time, IP address, content and time of posts by users) for at least 60 days, and to detect illegal information, stop transmission of such information, and keep relevant records.

If an internet information service provider violates these measures, the MPS and the local security bureaus may revoke its operating license and shut down its website.

In accordance with the Circular of the Ministry of Public Security, the State Secrecy Bureau, the State Cipher Code Administration and The Information Office of the State Council on Printing and Distributing the Administrative Measures for the Graded Protection of Information Security which took effect on June 22, 2007, the security protection grade of an information system may be classified into the five grades.

To newly build an information system of Grade II or above, its operator or user shall, within 30 days after it is put into operation, handle the record-filing procedures at the local public security organ at the level of municipality divided into districts or above of its locality.

On December 28, 2012, the SCNPC promulgated the Decision on Strengthening Network Information Protection to enhance the legal protection of information security and privacy on the internet.

On July 16, 2013, the MIIT promulgated the Provisions on Protection of Personal Information of Telecommunication and Internet Users, which took effect on September 1, 2013, to regulate the collection and use of users’ personal information in the provision of telecommunication services and internet information services in PRC and the personal information includes a user’s name, birth date, identification card number, address, phone number, account number, password and other information that can be used for identifying a user and time and place the user uses the aforementioned service.

Telecommunication business operators and internet service providers are required to establish its own rules for collecting and use of user’s information and cannot collect or use users’ information without users’ consent.

Telecommunication business operators and internet service providers are prohibited from disclosing, tampering with, damaging, selling or illegally providing others with, collected personal information.

Several Provisions on Regulation of the Market Order of Internet Information Service, which took effect on March 15, 2012, stipulate that without the consent of users, internet information service providers shall not collect information relevant to the users that can lead to the recognition of the identity of the users independently or in combination with other information, nor shall they provide personal information of users to others, unless otherwise provided by laws and administrative regulations.

In accordance with the Cyber Security Law of the PRC, which took effect on June 1, 2017, network operators shall comply with relevant laws and regulations and fulfill their obligations to safeguard security of the network when conducting business and providing services.

Those who provide services through networks shall take technical measures and other necessary measures pursuant to laws, regulations and compulsory national requirements to safeguard the safe and stable operation of the networks, respond to network security incidents effectively, prevent illegal and criminal activities, and maintain the integrity, confidentiality and usability of network data, and the network operator shall not collect the personal information irrelevant to the services it provides or collect or use the personal information in violation of the provisions of laws or agreements between both parties, and network operators of key information infrastructure shall store within the territory of the PRC all the personal information and important data collected and produced within the territory of the PRC.

The purchase of network products and services that may affect national security shall be subject to national cyber security review.

The Measures for Cyber security Review, which took effect on June 1, 2020, provide for more detailed rules regarding cyber security review requirements.

Pursuant to the Cybersecurity Review Measures, operators of critical information infrastructure must pass a cybersecurity review when purchasing network products and services which do or may affect national security.

On July 10, 2021, the Cyberspace Administration of China issued a revised draft of the Measures for Cybersecurity Review for public comments (“Draft Measures”), which required that, in addition to “operator of critical information infrastructure,” any “data processor” carrying out data processing activities that affect or may affect national security should also be subject to cybersecurity review, and further elaborated the factors to be considered when assessing the national security risks of the relevant activities, including, among others, (i) the risk of core data, important data or a large amount of personal information being stolen, leaked, destroyed, and illegally used or exited the country;

and (ii) the risk of critical information infrastructure, core data, important data or a large amount of personal information being affected, controlled, or maliciously used by foreign governments after listing abroad.

The Cyberspace Administration of China has said that under the proposed rules companies holding data on more than 1,000,000 users must now apply for cybersecurity approval when seeking listings in other nations because of the risk that such data and personal information could be “affected, controlled, and maliciously exploited by foreign governments.” The cybersecurity review will also investigate the potential national security risks from overseas IPOs.

On May 8, 2017, the Supreme People’s Court and the Supreme People’s Procuratorate released the Interpretations of the Supreme People’s Court and the Supreme People’s Procurator ate on Several Issues Concerning the Application of Law in the Handling of Criminal Cases Involving Infringement of Citizens’ Personal Information (the “Interpretations”), which took effect on June 1, 2017.

The Interpretations clarify several concepts regarding the crime of “infringement of citizens’ personal information” stipulated by Article 253A of the Criminal Law of the People’s Republic of China, including “citizen’s personal information”, “provision”, and “unlawful acquisition”.

Also, the Interpretations specify the standards for determining “serious circumstances” and “particularly serious circumstances” of this crime.

On June 10, 2021, the Standing Committee of the NPC promulgated the PRC Data Security Law, which will take effect on September 1, 2021.

The Data Security Law also sets forth the data security protection obligations for entities and individuals handling personal data, including that no entity or individual may acquire such data by stealing or other illegal means, and the collection and use of such data should not exceed the necessary limits.

On August 20, 2021, the Standing Committee of the NPC approved the Personal Information Protection Law (“PIPL”), which will become effective on November 1, 2021.

The PIPL curbs collection of personal identifiable information and seeks to address the issue of algorithmic discrimination.

Violations of the PIPL may result in warnings and forced corrections, confiscation of corresponding income, suspension of related services, and fines.

Laws and Regulations Relating to Intellectual Property Right

Pursuant to the Trademark Law of the PRC which was last amended on April 23, 2019 and subsequently enforced on November 1, 2019, and the Implementation Rules of the PRC Trademark Law which was last amended on April 29, 2014 and subsequently enforced on May 1, 2014, a registered trademark means a trademark that has been approved by and registered with the trademark office, including goods trademarks, service trademarks, collective trademarks and certification trademarks.

Twelve months prior to the expiration of the 10-year term, an applicant can renew its trademarks and reapply for trademark protection.

A registered trademark is valid for 10 years commencing on the date of registration approval and renewal shall be made within 12 months before the expiration.

If such an application cannot be filed within that period, an extension period of six months may be granted.

To license a registered trademark, the licensor should file the licensing documents of the licensed trademark with the trademark bureau, and the trademark bureau shall gazette the licensing.

Non-filing of the licensing of a trademark shall not be contested against a good faith third party.

The following acts shall constitute infringement of the exclusive right to use a registered trademark:

(1) using a trademark that is identical or similar to a registered trademark of the same type of commodities or similar commodities without a license from the registrant of that trademark;

(2) selling commodities that infringe upon the exclusive right to use a registered trademark;

(3) forging or manufacturing without authorization the marks of a registered trademark, or selling marks of a registered trademark that are forged or manufactured without authorization;

(4) changing another party’s registered trademark and putting the commodities with the changed trademark into the market without the consent of the holder of that trademark;

or (5) other conduct that would hinder another party’s exclusive right to use its registered trademark.

In accordance with the Patent Law of the PRC, which was last amended December 27, 2008 and subsequently enforced on October 1, 2009 and the Implementation Rules for the Implementation of the Patent Law of the PRC, which was last amended on January 9, 2010 and subsequently enforced on February 1, 2010, patent is divided in to 3 categories, i.e., invention patent, design patent and utility model patent.

The duration of the invention patent right is 20 years, and the duration of the design patent right and utility model patent right is 10 years, which shall begin from the date of filing.

An individual or entity who uses patent without the license of the patent holder, counterfeits patent products or engages in patent infringement activities shall be held liable for compensation to the patent holder and may be imposed a fine, or even subject to criminal liabilities.

According to the Copyright Law of the PRC, which took effect on June 1, 1991, and was last amended November 11, 2020 and subsequently enforced on June 1, 2021, copyright includes computer software, and the Copyright Protection Centre of China provide a voluntary register system for copyright.

According to the Regulation on Computer Software Protection, which took effect on October 1, 1991 and was last amended on January 30, 2013 and subsequently enforced on March 1, 2013, the software copyright shall exist from the date on which its development has been completed, and software copyright owner may register with the software registration institution recognized by the copyright administration department of the State Council.

On February 20, 2002, the National Copyright Administration of the PRC issued the Measures on Computer Software Copyright Registration, which outlines the operational procedures for registration of software copyright, as well as registration of the license for the software copyright and software copyright transfer contracts.

The Copyright Protection Center of the PRC is mandated as the software registration agency under the regulations.

In accordance with the Measures for the Administration of Internet Domain Names, which took effect on November 1, 2017 and the Implementation Rules on Registration of National Domain Names, the Measures on Dispute Resolution of National Domain Names, the Proceeding Rules on Dispute Resolution of National Domain Names, which took effect on June 18, 2019, domain name registrations are handled through domain name service agencies established under the relevant regulations, and the applicants become domain name holders upon successful registration.

Laws and Regulations Relating to Labor Protection

In accordance with the Labor Law of the PRC, which was last amended on December 29, 2018, and the Labor Contract Law of the PRC, which took effect on January 1, 2008 and was last amended on December 28, 2012 and subsequently enforced on July 1, 2013, and the Implementation Regulation of the Labor Contract Law of the PRC which took effect on September 18, 2008, labor contracts in written form shall be executed to establish labor relationships between employers and employees.

Employers shall establish and develop labor rules, regulations and systems according to the PRC laws to protect the rights and ensure the performance of duties of employees, and career development and training systems shall be established.

Employers shall also set up and develop the labor safety and health system in strict compliance with the rules and standards of labor safety and sanitation of the PRC and provide education on labor safety and sanitation for the employees to prevent work-related accidents and occupational harm.

Laws and Regulations Relating to Social Insurance and Housing Provident Fund

In accordance with the Law of Social Insurance of the PRC which took effect on July 1, 2011 and was last amended on December 29, 2018, the Provisional Regulation on the Collection and Payment of Social Insurance Premiums which took effect on January 22, 1999 and was last amended on March 24, 2019, the Decision of the State Council on the Establishment of Basic Medical Insurance System for Urban Workers which took effect on December 14, 1998, the Decisions of the State Council on the Establishment of Unified System of Basic Retirement Insurance Fund for the Employees of Enterprises which took effect on July 16, 1997, the Regulations of Insurance for Work-Related Injury which was amended on December 20, 2010 and subsequently enforced on January 1, 2011, the Regulations of Insurance for Unemployment which took effect on January 22, 1999, the Provisional Insurance Measures for Maternity of Employees which took effect on January 1, 1995 and the Regulations on Management of Housing Provident Fund which took effect on April 3, 1999 and was last amended on March 24, 2019, employers shall make payments of the basic medical insurance, basic retirement insurance, insurance for work-related injury, unemployment insurance, maternity insurance and housing provident fund for the employees.

If the employer fails to file the registration for social insurance, the social insurance administration authority shall order it to make rectification within a prescribed time limit.

If rectification is not made within the prescribed time limit, the employer will be imposed a fine.

If the employer does not pay the full amount of the Social Insurance as scheduled, the social insurance collection institution shall order it to pay within a prescribed time limit together with a late fee.

If the payment including the late fee is not settled by the prescribed time limit, the employer will be imposed a fine.

If the employer fails to file the registration for the housing provident fund, the housing provident fund administration center shall order the employer to pay the amount of the housing provident fund as specified under the relevant laws and regulations within a prescribed time limit, and if the employer still fails to pay up within the prescribed time limit, the fund administration center may apply to the court for enforcement of the unpaid amount.

According to the Reform Scheme of Tax Collection and Management System of State Tax and Local Tax which took effect on July 20, 2018, the social insurance collection and management authority was to be transferred from the Ministry of Human Resources and Social Security to the SAT from January 1, 2019.

On September 18, 2018, the general meeting of State Council announced that the policies for social insurance shall remain unchanged until the transfer of the authority for social insurance has been completed.

On September 21, 2018, the Ministry of Human Resources and Social Security released an Urgent Notice on Enforcing the Requirement of the General Meeting of the State Council and Stabilization the Levy of Social Insurance Payment and required that the policies for both the rate and basis of social insurance contributions shall remain unchanged until the reform on the transfer of the authority for social insurance has been completed.

On November 16, 2018, the SAT released the Notice of Certain Measures on Further Supporting and Serving the Development of Private Economy, which provided that the policy for social insurance shall remain stable and the SAT will pursue to lower the social insurance contribution rates with the relevant authorities, and ensure the overall burden of social insurance contribution on enterprises will be lowered.

Laws and Regulations Relating to Taxation

Corporate Income Tax

In accordance with the EIT Laws (defined thereafter), which took effect on January 1, 2008 and was last amended on December 29, 2018 and the Implementation Regulation for the Enterprise Income Tax Law of the PRC which took effect on January 1, 2008 and was last amended on April 23, 2019 (collectively, the “EIT Laws”), taxpayers consist of resident enterprises and non-resident enterprises.

Resident enterprises are defined as enterprises that are established in China in accordance with the PRC laws, or that are established in accordance with the laws of foreign countries (or regions) but whose actual or de facto control entity is within the PRC.

Non-resident enterprises are defined as enterprises that are set up in accordance with the laws of foreign countries (or regions) and whose actual administration is conducted outside the PRC, but (i) have entities or premises in China, or (ii) have no entities or premises in China but have income generated from China.

According to the EIT Laws, foreign invested enterprises in the PRC are subject to corporate income tax at a uniform rate of 25%.

For a non-resident enterprise having no office or establishment inside China, or for a non-resident enterprise whose incomes have no actual connection to its institution or establishment inside China, a withholding tax of 10% will be levied for the income derived from China.

The Notice Regarding the Determination of Chinese-Controlled Offshore Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies promulgated by the SAT and last amended on December 29, 2017 sets out the standards and procedures for determining whether the “de facto management body” of an enterprise registered outside of the PRC and controlled by PRC enterprises or PRC enterprise groups is located within the PRC.

In accordance with the EIT Laws, a high-tech enterprise which has independent intellectual property rights and complies with the rules of corporate income tax and other relevant laws and regulations enjoys a reduced corporate income tax rate of 15%.

The specific standards and procedures for the management of identification of high-tech enterprises are stipulated in the Measures for the Administration of the Certification of High-tech Enterprises which were jointly issued by the Ministry of Science and Technology, the MOF and the SAT on April 14, 2008, took retroactive effect on January 1, 2008 and were amended on January 29, 2016, took retroactive effect on January 1, 2016.

Pursuant to the EIT Laws, income from equity investment between qualified PRC resident enterprises such as dividends and bonuses, which refers to investment income derived by a resident enterprise from its direct investment in another resident enterprise, is tax-exempt.

In addition, pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income which took effect in the PRC on January 1, 2007, the PRC resident enterprise which distributes dividends to its Hong Kong shareholders should pay income tax according to the PRC law.

However, if the beneficiary of the dividends is a Hong Kong resident enterprise, which directly holds no less than 25% equity interests of the aforesaid enterprise (i.e., the dividend distributor), the tax levied shall be 5% of the distributed dividends.

Pursuant to the Circular of the State Administration of Taxation on Relevant Issues relating to the Implementation of Dividend Clauses in Tax Agreements which took effect on February 20, 2009, all of the following requirements shall be satisfied in order to enjoy the preferential tax rates provided under the tax agreements:

(i) the tax resident that receives dividends should be a company as provided in the tax agreement;

(ii) the equity interests and voting shares of the PRC resident company directly owned by the tax resident reach the percentages specified in the tax agreement;

and (iii) the equity interests of the Chinese resident company directly owned by such tax resident at any time during the twelve months prior to receiving the dividends reach a percentage specified in the tax agreement.

On February 3, 2018, the SAT issued the Notice on Certain Issues regarding Beneficial Owner in Tax Treaties which took effect on April 1, 2018 provides clearer guidelines and adopts comprehensive assessment approaches when determining whether a company can be qualified as Beneficial Owner, so as to enjoy the preferential tax rate on dividends.

Pursuant to Notice on Widening the Applicable Scope of the Policy of Temporary Exemption of Withholding Taxes on the Direct Investment Made by Overseas Investors with Distributed Profits which took effect on January 1, 2018, where the profits distributed by a resident enterprise within the territory of China to an overseas investor are directly invested in an investment project which is not in the prohibited category and is in conformity with the specified conditions, the project shall be governed by the deferred tax payment policy and be temporarily exempt from withholding income tax.

According to the Provisional Regulations on Value-added Tax of the PRC which took effect on January 1, 1994 and was last amended on November 19, 2017, and the Provisional Implementation Rules of the Provisional Regulations on Value-added Tax of the PRC which was last amended on October 28, 2011 and subsequently enforced on November 1, 2011, all enterprises and individuals that engage in the sale of goods, the provision of processing, repair and replacement services, and the importation of goods within the territory of the PRC shall pay VAT.

According to the Circular on Comprehensively Promoting the Pilot Program of the Collection of VAT in Lieu of Business Tax, which took effect on May 1, 2016, the pilot practice of levying VAT in lieu of business tax was extended nationwide to the sale of services, intangible assets or property.

According to the Circular of the Ministry of Finance (the “MOF”) and SAT on Adjusting Value-added Tax Rates which took effect on May 1, 2018, where a taxpayer engages in a taxable sales activity for the VAT purpose or imports goods, the previous applicable 17% and 11% tax rates are adjusted to be 16% and 10% respectively, and are further adjusted to be 13% and 9% respectively in accordance with the Announcement of the MOF, the SAT and the General Administration of Customs on Deepening the Policies Related to Value-Added Tax Reform which took effect on April 1, 2019.

Urban Maintenance and Construction Tax as well as Education Surtax

In accordance with the Provisional Provisions on the Collection of Educational Surtax, which was last amended on January 8, 2011, all entities and individuals who pay consumption tax, VAT and business tax shall also be required to pay educational surtax.

The educational surtax rate is 3% of the amount of VAT, business tax and consumption tax actually paid by each entity or individual, and the educational surtax shall be paid simultaneously with VAT, business tax and consumption tax.

In accordance with the Provisional Regulations on Urban Maintenance and Construction Tax of the PRC which was last amended on January 8, 2011 and Circular of the State Administration of Taxation on Issues Concerning the Collection of the Urban Maintenance and Construction Tax, which took effect on March 12, 1994, any entity or individual liable to consumption tax, VAT and business tax shall also be required to pay urban maintenance and construction tax.

Payment of urban maintenance and construction tax shall be based on the consumption tax, VAT and business tax which a taxpayer actually pays and shall be made simultaneously when the latter are paid.

The rates of urban maintenance and construction tax shall be 7%, 5% and 1% for a taxpayer in a city, in a county town or town and in a place other than a city, county town or town respectively.

Laws and Regulations Relating to Foreign Exchange

In accordance with the Foreign Exchange Administrative Regulations of the PRC which was last amended on August 5, 2008, Renminbi is generally freely convertible for payments of current account items, such as trade and service-related foreign exchange transactions and dividend payments, but are not freely convertible for capital account items, such as capital transfer, direct investment, investment in securities, derivative products or loans unless prior approval/registration of the SAFE is obtained.

In accordance with the Administration Rule on the Settlement and Sale of and Payment in Foreign Exchange, which took effect on July 1, 1996, a foreign invested enterprise is allowed to process the settlement and sale of and payment in foreign exchange for capital account items after submitting valid commercial documents and getting approval from the SAFE.

According to the Circular 13, which took effect on June 1, 2015, certain of the aforementioned approval rights of the SAFE are authorized to designated banks.

Pursuant to the Circular 19 which took effect on June 1, 2015, and the Notice of the State Administration of Foreign Exchange on Reforming and Standardizing the Administrative Provisions on Capital Account Foreign Exchange Settlement which took effect on June 9, 2016, whose main business is investment, are allowed to make equity investment in PRC using the Renminbi funds converted from its registered capital.

Meanwhile, the use of such Renminbi funds converted cannot be:

directly or indirectly used for the payment beyond the business scope of the enterprises or any payment prohibited by national laws and regulations;

unless otherwise provided by laws and regulations, directly or indirectly used or investment in securities or other financial products investment (except the bank capital-protection products);

granting loans to non-related enterprises unless permitted under the scope of business;

for construction or purchase of real estate not for self-use, save for real estate enterprises.

In October 2019, the SAFE released the Notice on Further Promoting the Facilitation of Cross-border Trade and Investment, which, among others, cancelled the restrictions on the domestic equity investment by non-investment foreign-funded enterprises with their capital funds and non-investment foreign-funded enterprises are allowed to make domestic equity investment with their capital funds in accordance with the law on the premise that the existing special administrative measures (Negative List) for foreign investment access are not violated and the projects invested thereby in China are true and legitimate.

In addition, foreign invested enterprises are allowed to settle foreign exchange capitals on a discretionary basis;

the foreign invested enterprises may, according to its actual business needs, settle with a bank the portion of the foreign exchange capital in its capital account for which the relevant foreign exchange bureau has confirmed monetary contribution rights and interests (or for which the bank has registered the account-crediting of monetary contribution).

For the time being, foreign invested enterprises are allowed to settle 100% of their foreign exchange capitals on a discretionary basis.

The SAFE may adjust the foregoing percentage as appropriate based on prevailing international balance of payments.

In accordance with the Circular 37 which took effect on July 4, 2014, a “special purpose vehicle” means an overseas enterprise directly established or indirectly controlled by a domestic resident (including domestic institutions and domestic individual residents) for the purpose of engaging in investment and financing with the domestic enterprise assets or interests he legally holds, or with the overseas assets or interests he legally holds.

Domestic residents establishing or taking control of a special purpose vehicle abroad which makes round-trip investments in PRC are required to file foreign exchange registration with the local foreign exchange bureau.

According to the Circular of the State Administration of Foreign Exchange on Further Simplifying and Improving the Direct Investment-related Foreign Exchange Administration Policies, the initial foreign exchange registration for establishing or taking control of a special purpose company by domestic residents can be filed with a designated bank, instead of the local foreign exchange bureau.

Pursuant to the Circular on Further Improving Reform of Foreign Exchange Administration and Optimizing Genuineness and Compliance Verification (the “Circular 3”) which took effect on January 26, 2017, stipulates several capital control measures with respect to the outbound remittance of profit from domestic entities to offshore entities, including (i) under the principle of genuine transaction, banks shall check board resolutions regarding profit distribution, the original version of tax filing records and audited financial statements;

and (ii) domestic entities shall hold income to account for previous years’ losses before remitting profits.

Moreover, pursuant to SAFE Circular 3, domestic entities shall make detailed explanations of the sources of capital and utilization arrangements, and provide board resolutions, contracts and other proof when completing the registration procedures in connection with an outbound investment.

Laws and Regulations Relating to Overseas Direct Investment

The Administrative Measures for Overseas Investment Management was promulgated by the MOFCOM on September 6, 2014 and came into effect on October 6, 2014.

As defined by the Measures for Overseas Investment Management, overseas investment means that the enterprises legally incorporated in the PRC own the non-financial enterprises or obtain the ownership, control and operation management rights of the existing non-financial enterprises in foreign countries through incorporation, merger and acquisition and other means.

If the overseas investments involve sensitive countries and regions or sensitive industries, they shall be subject to the approval of competent authorities.

For other overseas investments, they shall be subject to filing administration.

Local enterprises shall be filed with the provincial commercial administration authorities where they are located.

The qualified enterprises will be put into record and granted with Overseas Investment Certificate for Enterprise by the relevant provincial commercial administration authorities.

On December 26, 2017, NDRC issued the Administrative Measures for the Overseas Investment of Enterprises, which took effect on March 1, 2018.

Under the Measures, sensitive overseas investment projects carried out by PRC enterprises either directly or through overseas enterprises under their control shall be approved by NDRC, and non-sensitive overseas investment projects directly carried out by PRC enterprises shall be filed with NDRC or its local branch at provincial level.

In the case of the large-amount non-sensitive overseas investment projects with the investment amount of USD$ 300 million or above carried out by PRC enterprises through the overseas enterprises under their control, such PRC enterprises shall, before the implementation of the projects, submit a report describing the details about such large-amount non-sensitive projects to NDRC.

Where the PRC resident natural persons make overseas investments through overseas enterprises under their control, the Measures shall apply mutatis mutandis.

Subsequently on January 31, 2018, NDRC issued the Catalogue of Sensitive Overseas Investment Industry (2018 Version) effective from March 1, 2018 under which enterprises shall be restricted from making overseas investments in certain industries including without limitation real estate and hotel.

Laws and Regulations Relating to Dividend Distribution

The principal law governing dividend distributions by our PRC Subsidiaries is the PRC Company Law, while the dividend distribution by wholly foreign-owned enterprises (“WFOE”) is further governed by Foreign Investment Law and its implementation regulations.

According to the above laws and regulations, Chinese companies (including foreign-owned enterprises) may only pay dividends based on the accumulated profits calculated in accordance with PRC accounting principles.

In addition, in accordance with the PRC Company Law, when a company distributes their after-tax profits for a given year, they shall allocate 10% of after-tax its profits to their statutory common reserve.

Companies shall no longer be required to make allocations to their statutory common reserve once the aggregate amount of such reserve exceeds 50% of their registered capital unless the provisions of laws regarding foreign investment otherwise provided.

If a company’s statutory common reserve is insufficient to make up its losses of the previous years, such losses shall be made up from the profit for the current year prior to making allocations to the statutory common reserve pursuant to the preceding paragraph.

Such reserved cash cannot be distributed as cash dividends.

Available Information

We file electronically with the SEC our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act of 1934, as amended (the “Exchange Act”).

We are subject to the informational requirements of the Exchange Act and file or furnish reports, proxy statements, and other information with the SEC.

The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements and other information that we file with the SEC electronically.

The contents of the websites referred to above are not incorporated into this filing.

Further, our references to the URLs for these websites are intended to be inactive textual references only.

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 1. Business