What changed in this filing

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Item 1. Business

2024-04-15 compared with 2023-07-14 · 823 added, 491 removed, 18 unchanged (99% of the section changed)

WeTrade Group, Inc (the “Company”) was incorporated in the State of Wyoming on March 28, 2019.

As of December 31, 2022, the Company engages in the business of providing technical solutions via its social e-commerce platform and chatGPT technical services.

We are committed to providing an international cloud-based intelligence system and have independently developed a micro-business cloud intelligence system called the “YCloud.” Our goal is to provide technical and auto-billing management services to micro-business online stores in China through big data analytics, machine learning mechanisms, social network recommendations, and multi-channel data analysis.

We provide technology services to both individual and corporate users.

Through Yueshang Information Technology (Beijing) Limited (“Yueshang Beijing”), we provide access to “YCloud” to our two customers, which are Zhuozhou Weijiafu Information Technology Limited (“Weijiafu”), a PRC technology company, which then provide “YCloud” services to individual and corporate micro-business owners and Changtongfu Technology (Hainan) Co Limited (“Changtongfu”), a PRC technology company, which then provide “YCloud” services to individual and corporate business owners in the hotel and travel industries.

The market for individual micro-business owners represents a potential of 330 million users by the year of 2023.

http://xueqiu.com/8455183447/172404679?sharetime=2,2/22/2021).

YCloud serves corporate users in multiple industries, including Yuetao Group, Zhiding, Lvyue, Yuebei, Yuedian, Coke GO, and Zhongyanshangyue.

We conduct business operations in mainland China and have established trial operations in Hong Kong.

We expect to utilize the YCloud system to establish a global strategic cooperation with various social media platforms.

The main functions of the YCloud system are to manage users’ marketing relationships, CPS commission profit management, multi-channel data statistics, AI fission and management, and improved supply chain systems.

Currently, YCloud serves the micro business industry.

We have expanded the application of YCloud to tourism, hospitality, livestreaming and short video, medical beauty and traditional retail industries.

Corporate History and Structure

The following diagram sets forth the structure of the Company as of the date of this report:

WeTrade Group, Inc (referred to herein as “WeTrade Group”) was incorporated in the State of Wyoming on March 28, 2019.

(referred to herein as “Utour”) was incorporated in Singapore on March 23, 2018 as a limited liability company.

Utour is 100% owned by WeTrade Group.

WeTrade Information Technology Limited (referred to herein as “WeTrade Technology”) was incorporated in Hong Kong on September 4, 2019 as a limited liability company.

WeTrade Technology is 100% owned by WeTrade Group.

Yueshang Information Technology (Beijing) Limited (referred to herein as “Yueshang Beijing”) was incorporated in China on November 13, 2019 and is in the business of providing social e-commerce services, technical system support, and services.

Yueshang Beijing is a wholly foreign owned entity in China and is 100% owned by WeTrade Technology.

Yueshang Group (Hunan) Network Technology Limited (referred to herein as “Yueshang Hunan”) was incorporated in China in 2020 as a limited liability company and is in the business of providing software development, technical system support, and services.

WeTrade Beijing is 100% owned by Yueshang Beijing.

WeTrade Digital Technology (Beijing) Limited (referred to herein as “WeTrade Beijing”), was incorporated in China on December 24, 2020 as a limited liability company and is in the business of providing software development, technical system support, and services.

WeTrade Beijing is 100% owned by Yueshang Beijing.

Yueshang Technology Group (Zhuhai Hengqin) Limited (referred to herein as “Yueshang Zhuhai”), was incorporated in China in, 2020 as a limited liability company and is in the business of providing software development, technical system support, and services.

Yueshang Zhuhai is 100% owned by Yueshang Beijing.

Tibet XiaoShang Technology Co Limited (referred to herein as “Tibet Xiaoshang”), was incorporated in China on July 29, 2021 as a limited liability company and is in the business of providing software development and technical system services.

Tibet Xiaoshang is 100% owned by Yueshang Beijing,

Shanghai Yueshang Information Technology Limited (referred to herein as “Yueshang Shanghai”), was incorporated in China in, 2022 as a limited liability company and is in the business of providing software development, technical system support, and services.

Yueshang Shanghai is 100% owned by Yueshang Beijing.

Reverse Split

The record date for the determination of shareholders entitled to consent to the 1 for 185 Reverse Split was May 2, 2023 (the “Record Date”).

As of that date, we had pre-reverse split shares of 195,057,503 issued and outstanding shares of common stock with no par value.

Each share of our common stock entitles the holder thereof to one vote on each matter that may come before a meeting or vote of our shareholders.

The Reverse Split was approved by the holders of a majority of our stock entitled to vote on May 9, 2023.

The vote required to approve the Reverse Split was 50% of the shares entitled to vote plus one vote, a simple majority.

The actual affirmative vote was 51.90% of the issued shares.

On May 19, 2023, we filed a Schedule 14C with Securities and Exchange Commission.

The Reverse Split took effect on June 9, 2023.

Regulatory Permissions and Developments

Our counsel as to PRC law has advised us that the laws and regulations of the PRC do not currently have any material impact on our business, financial condition or results of operations.

However, there is no assurance that there will not be any changes in the economic, political and legal environment in Hong Kong in the future.

If there is a significant change to current political arrangements between mainland China and Hong Kong, companies operating in Hong Kong such as us may face similar regulatory risks as those operated in PRC, including their ability to offer securities to investors, list their securities on a U.S.

or other foreign exchange, conduct their business or accept foreign investment.

In light of China’s recent expansion of authority in Hong Kong, there are risks and uncertainties which we cannot foresee for the time being, and rules and regulations in China can change quickly with little or no advance notice.

The Chinese government may intervene or influence our current and future operations in Hong Kong at any time, or may exert more control over offerings conducted overseas and/or foreign investment in issuers likes ourselves.

We are aware that the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.

For example, on June 10, 2021, the Standing Committee of the National People’s Congress enacted the PRC Data Security Law, which took effect on September 1, 2021.

The law requires data collection to be conducted in a legitimate and proper manner, and stipulates that, for the purpose of data protection, data processing activities must be conducted based on data classification and hierarchical protection system for data security.

On July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued a document to crack down on certain activities in the securities markets and promote the high-quality development of the capital markets, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over Chinese-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities laws.

On August 20, 2021, the 30th meeting of the Standing Committee of the 13th National People’s Congress voted and passed the “Personal Information Protection Law of the People’s Republic of China,” or “PRC Personal Information Protection Law,” which became effective on November 1, 2021.

The PRC Personal Information Protection Law applies to the processing of personal information of natural persons within the territory of China that is carried out outside of China where (i) such processing is for the purpose of providing products or services for natural persons within China, (ii) such processing is to analyze or evaluate the behavior of natural persons within China, or (iii) there are any other circumstances stipulated by related laws and administrative regulations.

On December 28, 2021, the Cyberspace Administration of China (the “CAC”) jointly with the relevant authorities formally published Measures for Cybersecurity Review (2021) which took effect on February 15, 2022, replacing the former Measures for Cybersecurity Review (2020) issued on July 10, 2021.

Measures for Cybersecurity Review (2021) stipulates that operators of critical information infrastructure purchasing network products and services, and online platform operators (together with the operators of critical information infrastructure, the “Operators”) carrying out data processing activities that affect or may affect national security, shall conduct a cybersecurity review, and any online platform operator who controls more than one million users’ personal information must undergo a cybersecurity.

On February 17, 2023, with the approval of the State Council, the China Securities Regulatory Commission (the “CSRC”) promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, and five supporting guidelines, which came into effect on March 31, 2023.

Pursuant to the Trial Measures, (i) domestic companies that seek to offer or list securities overseas, both directly and indirectly, shall complete filing procedures with the CSRC pursuant to the requirements of the Trial Measures within three working days following their submission of initial public offerings or listing applications.

If a domestic company fails to complete the required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as an order to rectify, warnings and fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines;

(ii) if the issuer meets both of the following criteria, the overseas offering and listing conducted by such issuer shall be deemed an indirect overseas offering and listing by a PRC domestic company:

(A) 50% or more of any of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent fiscal year were derived from PRC domestic companies;

and (B) the majority of the issuer’s business activities are carried out in mainland China, or its main place(s) of business are located in mainland China, or the majority of its senior management team in charge of its business operations and management are PRC citizens or have their usual place(s) of residence located in mainland China.

In such circumstances, where a PRC domestic company is seeking an indirect overseas offering and listing in an overseas market, the issuer shall designate a major domestic operating entity responsible for all filing procedures with the CSRC, and where an issuer makes an application for an initial public offering or listing in an overseas market, the issuer shall submit filings with the CSRC within three business days after such application is submitted.

The revised Provisions were issued under the title the “Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies,” and became effective on March 31, 2023 together with the Trial Measures.

One of the major revisions to the revised Provisions is expanding their application to cover indirect overseas offering and listing, as is consistent with the Trial Measures.

The revised Provisions require that, among other things, (a) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities, including securities companies, securities service providers, and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level;

and (b) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities, including securities companies, securities service providers, and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations.

As of the date of this Report, the revised Provisions have come into effect.

Any failure or perceived failure by our Company or our subsidiaries to comply with the above confidentiality and archives administration requirements under the revised Provisions and other PRC laws and regulations may result in the relevant entities being held legally liable by competent authorities, and referred to the judicial organ to be investigated for criminal liability if suspected of committing a crime.

Except for the Basic Law, national laws of the PRC do not apply in Hong Kong unless they are listed in Annex III of the Basic Law and applied locally by promulgation or local legislation.

National laws that may be listed in Annex III are currently limited under the Basic Law to those which fall within the scope of defense and foreign affairs as well as other matters outside the limits of the autonomy of Hong Kong.

National laws and regulations relating to data protection, cybersecurity and anti-monopoly have not been listed in Annex III and do not apply directly to Hong Kong and, as such, we are advised by our counsel as to PRC law that that the CAC and CSRC do not currently have jurisdiction over companies operating in Hong Kong.

Our counsel as to PRC law has advised us that that we are not currently required to obtain any permission or approval from the CSRC, the CAC or any other regulatory authority in the PRC for our operations, the trading of our securities on the OTCQB and the offering of our securities to foreign investors.

The business of our subsidiary is not subject to cybersecurity review with the CAC, given that PRC laws on data protection and cybersecurity do not currently apply to Hong Kong.

To the extent that if we become subject to such PRC laws in the future, we do not believe we are required to conduct a cybersecurity review because (i) we do not possess a large amount of personal information in our business operations;

and (ii) data processed in our business does not have a bearing on national security and thus may not be classified as core or important data by the authorities.

In addition, we are not subject to merger control review by China’s anti-monopoly enforcement agency as such PRC enforcement agency does not currently have jurisdiction over our Hong Kong operating subsidiary.

However, our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to our business or industry, if we inadvertently conclude that such approvals are not required when they are, or applicable laws, regulations, or interpretations change and we are required to obtain approval in the future.

We may be subject to penalties and sanctions imposed by the PRC regulatory agencies, including the CSRC, if we fail to comply with such rules and regulations, which could adversely affect the ability of the Company’s securities to continue to trade on the OTCQB, which may cause the value of our securities to significantly decline or become worthless.

In addition, in light of the recent statements and regulatory actions by the PRC government, such as those related to Hong Kong’s national security, the promulgation of regulations prohibiting foreign ownership of Chinese companies operating in certain industries, which are constantly evolving, and anti-monopoly concerns, we may be subject to the risks of uncertainty of any future actions of the PRC government in this regard including the risk that the PRC government could disallow our holding company structure, which may result in a material change in our operations, including our ability to continue our existing holding company structure, carry on our current business, accept foreign investments, and offer or continue to offer securities to our investors.

These adverse actions could cause the value of our securities to significantly decline or become worthless.

There may be prominent risks associated with our operations being in Hong Kong.

For example, as a U.S.-listed public company operating primarily in Hong Kong, we may face heightened scrutiny, criticism and negative publicity, which could result in a material change in our operations and the value of our common stock.

Additionally, we are subject to certain legal and operational risks associated with our business operations in Hong Kong, which is subject to political and economic influence from China.

PRC laws and regulations governing our current business operations are sometimes vague and uncertain, and we may face the risk that changes in the policies of the PRC government could have a significant impact upon the business we may be able to conduct in Hong Kong and the profitability of such business.

Therefore, these risks associated with being based in or having the majority of our operations in Hong Kong could likely cause the value of our securities to significantly decline or be worthless.

Furthermore, these risks would likely result in a material change in our business operations or a complete hinderance of our ability to offer or continue to offer our securities to investors.

Furthermore, changes in Chinese internal regulatory mandates, such as the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the “M&A Rules”), the Anti-Monopoly Law, the Cybersecurity Law and the Data Security Law, may target the Company’s corporate structure and impact our ability to conduct business in Hong Kong, accept foreign investments, or list on an U.S.

NEXT TECHNOLOGY HOLDING INC (Formerly known as “WeTrade Group, Inc”) (the “Company”) was incorporated in the State of

Wyoming on March 28, 2019.

As of December 31, 2023, the Company pursue two corporate strategies.

One business strategy is to continue

providing software development services, and the other strategy is to acquire and hold bitcoin.

provide AI-enabled software development services to our customers, which included developing, designing, and implementing various SAAS

software solutions for businesses of all types, including industrial and other businesses.

Acquisition Strategy

bitcoin acquisition strategy generally involves acquiring bitcoin with our liquid assets that exceed working capital requirements, and

from time to time, subject to market conditions, issuing debt or equity securities or engaging in other capital raising transactions

with the objective of using the proceeds to purchase bitcoin.

view our bitcoin holdings as long-term holdings and expect to continue to accumulate bitcoin.

We have not set any specific target for

the amount of bitcoin we seek to hold, and we will continue to monitor market conditions in determining whether to engage in additional

financings to purchase additional bitcoin.

overall strategy also contemplates that we may (i) periodically sell bitcoin for general corporate purposes, including to generate cash

for treasury management or in connection with strategies that generate tax benefits in accordance with applicable law, (ii) enter into

additional capital raising transactions that are collateralized by our bitcoin holdings, and (iii) consider pursuing additional strategies

to create income streams or otherwise generate funds using our bitcoin holdings.

believe that, due to its limited supply, bitcoin offers the opportunity for appreciation in value if its adoption increases and has the

potential to serve as a hedge against inflation in the long-term.

following table presents a roll-forward of our bitcoin holdings, including additional information related to our bitcoin purchases, and

digital asset impairment losses during the period:

asset original cost basis

asset gain / (losses)

asset market value

number of Bitcoin held

Balance at December 31, 2022

Digital asset

asset gain/ (loss)

at December 31, 2023

Permissions and Developments

counsel as to PRC law has advised us that the laws and regulations of the PRC do not currently have any material impact on our business,

financial condition or results of operations.

However, there is no assurance that there will not be any changes in the economic, political

and legal environment in Hong Kong in the future.

If there is a significant change to current political arrangements between mainland

China and Hong Kong, companies operating in Hong Kong such as us may face similar regulatory risks as those operated in PRC, including

their ability to offer securities to investors, list their securities on a U.S.

or other foreign exchange, conduct their business or

accept foreign investment.

In light of China’s recent expansion of authority in Hong Kong, there are risks and uncertainties which

we cannot foresee for the time being, and rules and regulations in China can change quickly with little or no advance notice.

government may intervene or influence our current and future operations in Hong Kong at any time, or may exert more control over offerings

conducted overseas and/or foreign investment in issuers likes ourselves.

are aware that the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain

areas in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision

over China-based companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity

reviews, and expanding the efforts in anti-monopoly enforcement.

example, on June 10, 2021, the Standing Committee of the National People’s Congress enacted the PRC Data Security Law, which took

effect on September 1, 2021.

The law requires data collection to be conducted in a legitimate and proper manner, and stipulates that,

for the purpose of data protection, data processing activities must be conducted based on data classification and hierarchical protection

system for data security.

July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly

issued a document to crack down on certain activities in the securities markets and promote the high-quality development of the capital

markets, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement

and judicial cooperation, to enhance supervision over Chinese-based companies listed overseas, and to establish and improve the system

of extraterritorial application of the PRC securities laws.

August 20, 2021, the 30th meeting of the Standing Committee of the 13th National People’s Congress voted and passed the “Personal

Information Protection Law of the People’s Republic of China,” or “PRC Personal Information Protection Law,”

which became effective on November 1, 2021.

The PRC Personal Information Protection Law applies to the processing of personal information

of natural persons within the territory of China that is carried out outside of China where (i) such processing is for the purpose of

providing products or services for natural persons within China, (ii) such processing is to analyze or evaluate the behavior of natural

persons within China, or (iii) there are any other circumstances stipulated by related laws and administrative regulations.

December 28, 2021, the Cyberspace Administration of China (the “CAC”) jointly with the relevant authorities formally published

Measures for Cybersecurity Review (2021) which took effect on February 15, 2022, replacing the former Measures for Cybersecurity Review

(2020) issued on July 10, 2021.

Measures for Cybersecurity Review (2021) stipulates that operators of critical information infrastructure

purchasing network products and services, and online platform operators (together with the operators of critical information infrastructure,

the “Operators”) carrying out data processing activities that affect or may affect national security, shall conduct a cybersecurity

review, and any online platform operator who controls more than one million users’ personal information must undergo a cybersecurity.

February 17, 2023, with the approval of the State Council, the China Securities Regulatory Commission (the “CSRC”) promulgated

the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies, or the Trial Measures, and five

supporting guidelines, which came into effect on March 31, 2023.

Pursuant to the Trial Measures, (i) domestic companies that seek to

offer or list securities overseas, both directly and indirectly, shall complete filing procedures with the CSRC pursuant to the requirements

of the Trial Measures within three working days following their submission of initial public offerings or listing applications.

domestic company fails to complete the required filing procedures or conceals any material fact or falsifies any major content in its

filing documents, such domestic company may be subject to

administrative penalties, such as an order to rectify, warnings and fines,

and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject

to administrative penalties, such as warnings and fines;

(ii) if the issuer meets both of the following criteria, the overseas offering

and listing conducted by such issuer shall be deemed an indirect overseas offering and listing by a PRC domestic company:

more of any of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated

financial statements for the most recent fiscal year were derived from PRC domestic companies;

and (B) the majority of the issuer’s

business activities are carried out in mainland China, or its main place(s) of business are located in mainland China, or the majority

of its senior management team in charge of its business operations and management are PRC citizens or have their usual place(s) of residence

located in mainland China.

In such circumstances, where a PRC domestic company is seeking an indirect overseas offering and listing in

an overseas market, the issuer shall designate a major domestic operating entity responsible for all filing procedures with the CSRC,

and where an issuer makes an application for an initial public offering or listing in an overseas market, the issuer shall submit filings

with the CSRC within three business days after such application is submitted.

February 24, 2023, the CSRC, together with the MOF, National Administration of State Secrets Protection and National Archives Administration

of China, revised the Provisions issued by the CSRC and National Administration of State Secrets Protection and National Archives Administration

of China in 2009.

The revised Provisions were issued under the title the “Provisions on Strengthening Confidentiality and Archives

Administration of Overseas Securities Offering and Listing by Domestic Companies,” and became effective on March 31, 2023 together

with the Trial Measures.

One of the major revisions to the revised Provisions is expanding their application to cover indirect overseas

offering and listing, as is consistent with the Trial Measures.

The revised Provisions require that, among other things, (a) a domestic

company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals

or entities, including securities companies, securities service providers, and overseas regulators, any documents and materials that

contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to

law, and file with the secrecy administrative department at the same level;

and (b) a domestic company that plans to, either directly

or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities, including securities

companies, securities service providers, and overseas regulators, any other documents and materials that, if leaked, will be detrimental

to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations.

of the date of this Report, the revised Provisions have come into effect.

Any failure or perceived failure by our Company or our subsidiaries

to comply with the above confidentiality and archives administration requirements under the revised Provisions and other PRC laws and

regulations may result in the relevant entities being held legally liable by competent authorities, and referred to the judicial organ

to be investigated for criminal liability if suspected of committing a crime.

for the Basic Law, national laws of the PRC do not apply in Hong Kong unless they are listed in Annex III of the Basic Law and applied

locally by promulgation or local legislation.

National laws that may be listed in Annex III are currently limited under the Basic Law

to those which fall within the scope of defense and foreign affairs as well as other matters outside the limits of the autonomy of Hong

National laws and regulations relating to data protection, cybersecurity and anti-monopoly have not been listed in Annex III and

do not apply directly to Hong Kong and, as such, we are advised by our counsel as to PRC law that that the CAC and CSRC do not currently

have jurisdiction over companies operating in Hong Kong.

counsel as to PRC law has advised us that that we are not currently required to obtain any permission or approval from the CSRC, the

CAC or any other regulatory authority in the PRC for our operations, the trading of our securities on the OTCQB and the offering of our

securities to foreign investors.

The business of our subsidiary is not subject to cybersecurity review with the CAC, given that PRC laws

on data protection and cybersecurity do not currently apply to Hong Kong.

To the extent that if we become subject to such PRC laws in

the future, we do not believe we are required to conduct a cybersecurity review because (i) we do not possess a large amount of personal

information in our business operations;

and (ii) data processed in our business does not have a bearing on national security and thus

may not be classified as core or important data by the authorities.

In addition, we are not subject to merger control review by China’s

anti-monopoly enforcement agency as such PRC enforcement agency does not currently have jurisdiction over our Hong Kong operating subsidiary.

However, our operations could be adversely affected, directly or indirectly, by existing or future laws and regulations relating to our

business or industry, if we inadvertently conclude that such approvals are not required when they are, or applicable laws, regulations,

or interpretations change and we are required to obtain approval in the future.

We may be subject to penalties and sanctions imposed

by the PRC regulatory agencies, including the CSRC, if we fail to comply with such rules and regulations, which could adversely affect

the ability of the Company’s securities to continue to trade on the OTCQB, which may cause the value of our securities to significantly

decline or become worthless.

addition, in light of the recent statements and regulatory actions by the PRC government, such as those related to Hong Kong’s

national security, the promulgation of regulations prohibiting foreign ownership of Chinese companies operating in certain industries,

which are constantly evolving, and anti-monopoly concerns, we may be subject to the risks of uncertainty of any future actions of the

PRC government in this regard including the risk that the PRC government could disallow our holding company structure, which may result

in a material change in our operations, including our ability to continue our existing holding company structure, carry on our current

business, accept foreign investments, and offer or continue to offer securities to our investors.

These adverse actions could cause the

value of our securities to significantly decline or become worthless.

may be prominent risks associated with our operations being in Hong Kong.

For example, as a U.S.-listed public company operating primarily

in Hong Kong, we may face heightened scrutiny, criticism and negative publicity, which could result in a material change in our operations

and the value of our common stock.

Additionally, we are subject to certain legal and operational risks associated with our business operations

in Hong Kong, which is subject to political and economic influence from China.

PRC laws and regulations governing our current business

operations are sometimes vague and uncertain, and we may face the risk that changes in the policies of the PRC government could have

a significant impact upon the business we may be able to conduct in Hong Kong and the profitability of such business.

Therefore, these

risks associated with being based in or having the majority of our operations in Hong Kong could likely cause the value of our securities

to significantly decline or be worthless.

Furthermore, these risks would likely result in a material change in our business operations

or a complete hinderance of our ability to offer or continue to offer our securities to investors.

Furthermore, changes in Chinese internal

regulatory mandates, such as the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the “M&A

Rules”), the Anti-Monopoly Law, the Cybersecurity Law and the Data Security Law, may target the Company’s corporate structure

and impact our ability to conduct business in Hong Kong, accept foreign investments, or list on an U.S.

or other foreign exchange.

1 unchanged sentence

and international relations, and will impact companies with connections to the United States or China (including Hong Kong).

The SEC has issued statements primarily focused on companies with significant China-based operations.

For example, on July 30, 2021, Gary Gensler, Chairman of the SEC, issued a Statement on Investor Protection Related to Recent Developments in China, pursuant to which Chairman Gensler stated that he has asked the SEC staff to engage in targeted additional reviews of filings for companies with significant China-based operations.

Implications of Holding Foreign Company Accountable Act

On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the Holding Foreign Company Accountable Act, or the HFCAA.

An identified issuer will be required to comply with these rules if the SEC identifies it as having a “non-inspection” year under a process to be subsequently established by the SEC.

In June 2021, the Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if signed into law, would reduce the time period for the delisting of foreign companies under the HFCAA to two consecutive years instead of three years.

If our auditor cannot be inspected by the Public Company Accounting Oversight Board, or the PCAOB, for two consecutive years, the trading of our securities on any U.S.

has issued statements primarily focused on companies with significant China-based operations.

For example, on July 30, 2021, Gary Gensler,

Chairman of the SEC, issued a Statement on Investor Protection Related to Recent Developments in China, pursuant to which Chairman Gensler

stated that he has asked the SEC staff to engage in targeted additional reviews of filings for companies with significant China-based

laws and regulations applicable to bitcoin and digital assets are evolving and subject to interpretation and change.

around the world have reacted differently to digital assets;

certain governments have deemed them illegal, and others have allowed their

use and trade without restriction, while in some jurisdictions, such as the U.S., digital assets are subject to overlapping, uncertain

and evolving regulatory requirements.

digital assets have grown in both popularity and market size, the U.S.

Executive Branch, Congress and a number of U.S.

federal and state

agencies, including the Financial Crimes Enforcement Network, the Commodity Futures Trading Commission (“CFTC”), the SEC,

the Financial Industry Regulatory Authority, the Consumer Financial Protection Bureau, the Department of Justice, the Department of Homeland

Security, the Federal Bureau of Investigation, the IRS and state financial regulators, have been examining the operations of digital

asset networks, digital asset users and digital asset exchanges, with particular focus on the extent to which digital assets can be used

to violate state or federal laws, including to facilitate the laundering of proceeds of illegal activities or the funding of criminal

or terrorist enterprises, and the safety and soundness and consumer-protective safeguards of exchanges or other service-providers that

hold, transfer, trade or exchange digital assets for users.

Many of these state and federal agencies have issued consumer advisories

regarding the risks posed by digital assets to investors.

In addition, federal and state agencies, and other countries have issued rules

or guidance regarding the treatment of digital asset transactions and requirements for businesses engaged in activities related to digital

on the regulatory characterization of bitcoin, the markets for bitcoin in general, and our activities in particular, our business and

our bitcoin acquisition strategy may be subject to regulation by one or more regulators in the United States and globally.

future regulatory actions may alter, to a materially adverse extent, the nature of digital assets markets, the participation of industry

participants, including service providers and financial institutions in these markets, and our ability to pursue our bitcoin strategy.

Additionally, U.S.

state and federal and foreign regulators and legislatures have taken action against industry participants, including

digital assets businesses, and enacted restrictive regimes in response to adverse publicity arising from hacks, consumer harm, or criminal

activity stemming from digital assets activity.

federal and state energy regulatory authorities are also monitoring the total electricity

consumption of cryptocurrency mining, and the potential impacts of cryptocurrency mining to the supply and dispatch functionality of

the wholesale grid and retail distribution systems.

Many state legislative bodies have passed, or are actively considering, legislation

to address the impact of cryptocurrency mining in their respective states.

CFTC takes the position that some digital assets, including bitcoin, fall within the definition of a “commodity” under the

Commodities Exchange Act of 1936, as amended (the “CEA”).

Under the CEA, the CFTC has broad enforcement authority to police

market manipulation and fraud in spot digital assets markets in which we may transact.

Beyond instances of fraud or manipulation, the

CFTC generally does not oversee cash or spot market exchanges or transactions involving digital asset commodities that do not utilize

margin, leverage, or financing.

In addition, CFTC regulations and CFTC oversight and enforcement authority apply with respect to futures,

swaps, other derivative products and certain retail leveraged commodity transactions involving digital asset commodities, including the

markets on which these products trade.

SEC and its staff have taken the position that certain other digital assets fall within the definition of a “security” under

federal securities laws.

Public statements made by senior officials and senior members of the staff at the SEC indicate that

the SEC does not consider bitcoin to be a security under the federal securities laws.

However, such statements are not official policy

statements by the SEC and reflect only the speakers’ views, which are not binding on the SEC or any other agency or court and cannot

be generalized to any other digital assets.

addition, since transactions in bitcoin provide a degree of anonymity, they are susceptible to misuse for criminal activities, such as

money laundering.

This misuse, or the perception of such misuse, could lead to greater regulatory oversight of bitcoin and Bitcoin platforms,

and there is the possibility that law enforcement agencies could close bitcoin platforms or other bitcoin-related infrastructure with

little or no notice and prevent users from accessing or retrieving bitcoin held via such

or infrastructure.

For example, in her January 2021 nomination hearing before the Senate Finance Committee, Treasury Secretary Janet

Yellen noted that cryptocurrencies have the potential to improve the efficiency of the financial system but that they can be used to

finance terrorism, facilitate money laundering, and support activities that threaten U.S.

national security interests and the integrity

and international financial systems.

Treasury Department’s Office of Foreign Assets Control has issued updated

advisories regarding the use of virtual currencies, added a number of digital asset exchanges and service providers to the Specially

Designated Nationals and Blocked Persons list and engaged in several enforcement actions, including a series of enforcement actions that

have either shut down or significantly curtailed the operations of several smaller digital asset exchanges associated with Russian and/or

North Korean nationals.

noted above, activities involving bitcoin and other digital assets may fall within the jurisdiction of more than one financial regulator

and various courts and such laws and regulations are rapidly evolving and increasing in scope.

On March 9, 2022, President Biden signed

an executive order relating to cryptocurrencies.

While the executive order did not mandate the adoption of any specific regulations,

it instructed various federal agencies to consider potential regulatory measures, including the evaluation of the creation of a U.S.

On September 16, 2022, the White House released a framework for digital asset development, based on reports from various government

agencies, including the U.S.

Department of Treasury, the Department of Justice, and the Department of Commerce.

Among other things, the

framework encourages regulators to pursue enforcement actions, issue guidance and rules to address current and emergent risks, support

the development and use of innovative technologies by payment providers to increase access to instant payments, consider creating a federal

framework to regulate nonbank payment providers, and evaluate whether to call upon Congress to amend the Bank Secrecy Act and laws against

unlicensed money transmission to apply explicitly to digital asset service providers.

There have also been several bills introduced in

Congress that propose to establish additional regulation and oversight of the digital asset markets.

of Holding Foreign Company Accountable Act

March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements

of the Holding Foreign Company Accountable Act, or the HFCAA.

An identified issuer will be required to comply with these rules if the

SEC identifies it as having a “non-inspection” year under a process to be subsequently established by the SEC.

In June 2021,

the Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if signed into law, would reduce the time period

for the delisting of foreign companies under the HFCAA to two consecutive years instead of three years.

If our auditor cannot be inspected

by the Public Company Accounting Oversight Board, or the PCAOB, for two consecutive years, the trading of our securities on any U.S.

national securities exchanges, as well as any over-the-counter trading in the U.S., will be prohibited.

On September 22, 2021, the PCAOB adopted a final rule implementing the HFCAA, which provides a framework for the PCAOB to use when determining, as contemplated under the HFCAA, whether the PCAOB is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.

On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCAA.

The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions.

On December 16, 2021, the PCAOB issued a report on its determinations that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong, because of positions taken by PRC authorities in those jurisdictions.

On August 26, 2022, the PCAOB announced that it had signed a Statement of Protocol (the “Statement of Protocol”) with the China Securities Regulatory Commission and the Ministry of Finance of China.

The terms of the Statement of Protocol would grant the PCAOB complete access to audit work papers and other information so that it may inspect and investigate PCAOB-registered accounting firms headquartered in China and Hong Kong.

According to the PCAOB, its December 2021 determinations under the HFCAA remain in effect.

On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong completely in 2022.

The PCAOB Board vacated its previous 2021 determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong.

Under the PCAOB’s rules, a reassessment of a determination under the HFCAA may result in the PCAOB reaffirming, modifying or vacating the determination.

In the event it is later determined that the PCAOB is unable to inspect or investigate completely the Company’s auditor because of a position taken by an authority in a foreign jurisdiction, then such lack of inspection could cause trading in the Company’s securities to be prohibited under the HFCAA ultimately result in a determination by a securities exchange to delist the Company’s securities.

Transfers of Cash to and from Our Subsidiaries

WeTrade Group Inc.

On September 22, 2021, the PCAOB

adopted a final rule implementing the HFCAA, which provides a framework for the PCAOB to use when determining, as contemplated under

the HFCAA, whether the PCAOB is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction

because of a position taken by one or more authorities in that jurisdiction.

On December 2, 2021, the SEC issued amendments to finalize

rules implementing the submission and disclosure requirements in the HFCAA.

The rules apply to registrants that the SEC identifies as

having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction

and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions.

December 16, 2021, the PCAOB issued a report on its determinations that it is unable to inspect or investigate completely PCAOB-registered

public accounting firms headquartered in mainland China and in Hong Kong, because of positions taken by PRC authorities in those jurisdictions.

On August 26, 2022, the PCAOB announced that it had signed a Statement of Protocol (the “Statement of Protocol”)

with the China Securities Regulatory Commission and the Ministry of Finance of China.

The terms of the Statement of Protocol would grant

the PCAOB complete access to audit work papers and other information so that it may inspect and investigate PCAOB-registered

accounting firms headquartered in China and Hong Kong.

According to the PCAOB, its December 2021 determinations under the HFCAA

remain in effect.

On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered

public accounting firms headquartered in mainland China and Hong Kong completely in 2022.

The PCAOB Board vacated its previous 2021 determinations

that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and

Under the PCAOB’s rules, a reassessment of a determination under the HFCAA may result in the PCAOB reaffirming,

modifying or vacating the determination.

In the event it is later determined that the PCAOB is unable to inspect or investigate

completely the Company’s auditor because of a position taken by an authority in a foreign

jurisdiction,

then such lack of inspection could cause trading in the Company’s securities to be prohibited under the HFCAA ultimately result

in a determination by a securities exchange to delist the Company’s securities.

of Cash to and from Our Subsidiaries

NEXT TECHNOLOGY HOLDING INC.

is a holding company with no operations of its own.

We conduct our operations in China primarily through our subsidiaries in China.

We may rely on dividends to be paid by our PRC subsidiaries to fund our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders, to service any debt we may incur and to pay our operating expenses.

If our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to us.

WeTrade Group Inc.

is permitted under the Wyoming laws to provide funding to our subsidiaries in Singapore, Hong Kong and PRC through loans or capital contributions without restrictions on the amount of the funds, subject to satisfaction of applicable government registration, approval and filing requirements.

WeTrade Technology is also permitted under the laws of Hong Kong to provide funding to WeTrade Group Inc.

We conduct our operations in Hong Kong and China primarily

through our subsidiaries in both Hong Kong and China.

We may rely on dividends to be paid by our Hong Kong and PRC subsidiaries to fund

our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders,

to service any debt we may incur and to pay our operating expenses.

If our Hong Kong and PRC subsidiaries incur debt on their own behalf

in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to us.

NEXT TECHNOLOGY HOLDING INC.

is permitted under the Wyoming laws to provide funding to our subsidiaries in Singapore, Hong Kong and PRC through

loans or capital contributions without restrictions on the amount of the funds, subject to satisfaction of applicable government registration,

approval and filing requirements.

Next Technology is also permitted under the laws of Hong Kong to provide funding to Next Technology

through dividend distribution without restrictions on the amount of the funds.

As of the date of this annual report, there has been no distribution of dividends or assets among the holding company or the subsidiaries.

We currently do not have any cash management policies in place.

We currently intend to retain all available funds and future earnings, if any, for the operation and expansion of our business and do not anticipate declaring or paying any dividends in the foreseeable future.

Any future determination related to our dividend policy will be made at the discretion of our board of directors after considering our financial condition, results of operations, capital requirements, contractual requirements, business prospects and other factors the board of directors deems relevant, and subject to the restrictions contained in any future financing instruments.

Subject to the Wyoming Business Corporations Act and our bylaws, our board of directors may authorize and declare a dividend to shareholders at such time and of such an amount as they think fit if they are satisfied, on reasonable grounds, that immediately following the dividend the value of our assets will exceed our liabilities and we will be able to pay our debts as they become due.

There is no further Wyoming statutory restriction on the amount of funds which may be distributed by us by dividend.

Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by us.

The laws and regulations of the PRC do not currently have any material impact on transfer of cash from WeTrade Group Inc.

to WeTrade Technology or from WeTrade Technology to Wetrade Group Inc.

There are no restrictions or limitation under the laws of Hong Kong imposed on the conversion of HK dollar into foreign currencies and the remittance of currencies out of Hong Kong or across borders and to U.S investors.

Current PRC regulations permit our PRC subsidiaries to pay dividends to WeTrade Technology only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations.

In addition, each of our subsidiaries in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital.

Each of such entity in China is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund, although the amount to be set aside, if any, is determined at the discretion of its board of directors.

Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation.

Micro-businesses in China are the target customers for our product.

The term micro-businesses not only refers to corporate companies, but also individuals.

It includes all business owners engaged in sales and marketing based on social platforms.

Micro-business first emerged when social platforms just started expanding in China, and microbusiness owners were usually individual users of social platforms who used the platform as a business tool.

Gradually, the expansion of social platform gave birth to various independent brands and stores which flourished on various social platforms.

These brands and stores are known as micro-business owners in today’s context.

As the industry matured, traditional brands and major e-commerce players joined this market as well.

Micro-business as a concept gained more trust among business owners and consumers, and more business owners tried to gain market shares through micro-business channels.

One difficulty they face is the limitation of technology support.

Our YCloud system not only opens up new resource for micro-business, but also helps remove the technical industry entry barrier for micro-business owners.

The number of people running micro-businesses in China has increased from 60 million in 2019 to 260 million in 2022, which is estimated to further increase to 330 million in 2023.

https://wenku.baidu.com/view/1ff2df18ba4cf7ec4afe04a1b0717fd5370cb2cf.html,2/22/2021)

Our business is in the social e-commerce area, which is based on social networking and connects suppliers and consumers in an S2B2C model to facilitate commodity circulation.

Specifically, S2B2C refers to the upstream of the distribution platform(S) that connects commodity suppliers, providing small shop owners(B) with a series of services such as supply chain, logistics, IT systems, training, after-sales, etc., and then the shop owner is responsible for the C-side product sales and user maintenance.

Users use social relationships to conduct distribution without intervening in the supply chain.

This distribution mode adopts the business method that features relying on existing social groups, and team compensation.

In recent years, as the scale of mobile online shopping has grown steadily, the development of micro-businesses has seen a more promising market environment.

According to data from the Ministry of Commerce of PRC, in 2020, the volume of online retail sales of physical goods is 9.8 trillion yuan, an increase of 14.8%.

PRC market has been the world's largest online retail market for eight consecutive years.

Accordingly, the market scale of micro-business has also been expanding.

According to data from iResearch, the size of market transaction in China's micro-business industry in 2016 was 328.77 billion yuan.

It is expected that with the growth of demand, the transaction size of the micro-business market in 2023 will be approximately 13 trillion yuan.

In addition, with the expansion of the scale of micro-business transactions, the number of domestic micro-business owners has also increased year by year.

According to data from iResearch, the number of micro-business owners in China has exceeded 20 million in 2017 and is expected to reach 330 million by 2023.

https://xueqiu.com/8455183447/172404679?sharetime=2)

Meanwhile, the industry competition we face should not be underestimated.

Due to the low entry barriers, more micro-business owners joined the industry, utilizing online platform such as Wechat.

As a result, the current market has become more crowded with homogeneous products.

According to the “White Paper on the Internet Development of Mini Programs in 2019”, (Source:

http://www.199it.com/archives/990835.html) as of November 2019, the number of mini programs across the entire network exceeded 4.5 million and the number of third-party service providers already exceeded 8,000.

Within the WeChat system, the current top five small business third-party service providers between 2019 and 2020 were Weimob, Youzan, Dianke, BoxPay, and Tengrui, with market shares of approximately 15.3% and 7.3%, 5.3%, 3.6%, 1.0%.

However, we believe that the market has not matured into a stable playfield, and we need to conduct market research continuously as many more small and medium-sized micro-business players enter the industry.

We have utilized digitalization, electronic management, electronic data exchange, big data analysis, AI fission technology, revenue management and other technologies to build a strong coordination effect.

We believe that our cloud technology enables us to develop a highly functional platform for micro-business users in China.

We have optimized our product using the tools and platforms best suited to serve our customers and developed YCloud.

We believe that YCloud is the first global micro-business cloud intelligent internationalization system.

It conducts multi-channel data analysis through integrating big data and social recommendation relationships.

It also provides users with AI fission and management systems and supply chain systems in order to reach a wider range of user groups.

YCloud has four main functions and competitive advantages as follows:

Multiple integrated payment methods and payment analytics:

the YCloud system provides micro-businesses and hotel owners with multiple payment methods such as Alipay, WeChat, and UnionPay.

The total order amount on the system is then directly entered into the platform to collect funds in separate accounts.

Using YCloud’s technology support, the micro-business owners are able to offer multiple channels of payments to their customers, including Alipay, WeChat, and UnionPay.

Meanwhile, YCloud assigns a bar code to merchandises that purchasers can then scan to pay, allowing purchasers to make payments both online and offline.

This proprietary payment technology allows our customers to reduce labor costs and error rates, thus significantly improving data analysis.

Single-scenario payment function:

although micro-business owners are provided with a multi-method payment function for their consumers through the YCloud system, micro-business owners only have a single sales channel to display.

The revenue of each sale is divided by commissions, and the cost is allocated to suppliers and the handling fee to the YCloud system.

The remaining balance goes to micro-business owners.

Multi-scenario payment function:

micro-business owners have multiple sales channels to display and numerous channels to perform revenue sharing and profit consolidation functions.

After various products are sold through different channels, the cost will be allocated to suppliers and the handling fee to the YCloud system.

The remaining balance will be combined and goes to micro-business owners.

Due to the impact of the COVID-19 outbreak in 2020, many companies, including businesses traditionally operating offline in a wide range of industries have opted for a micro-business model to build sales channels through online social platforms and expand business opportunities.

As a result of the COVID-19 outbreak, consumer demand shifted, which forced business owners to expand to new markets and be present on multiple social platforms.

Through continuous research on the micro-business industry, and its understanding of the relationship between people and social relationships on social platforms, YCloud develops new technology designed to meet the ever changing demand of micro-business owners across all industries as the following:

Team management:

the YCloud system utilizes user marketing relationship tracking and CPS commission revenue management tools.

AI fission and management:

using intelligent robots to analyze user behavior, data sharing, purchase history, and other data, the YCloud system provides tailored recommendations and displays.

For example, the YCloud system connects users’ behavior across multiple apps and platforms and makes automatic recommendations based on its analysis.

Supply chain system integration:

the YCloud system applies cross-platform resource integration technology.

The integration allows the multi-channel output of high-quality products and creates a seamless connection between suppliers and customers.

The YCloud provides a complete supply chain system integrating supply, sales, finance, and service.

Our Technology

We believe that our cloud technology enables us to develop a highly functional platform for micro-business users in China.

We have optimized our product using the tools and platforms best suited to serve our customers.

Performance, functional depth, and usability of our product drive our technological decisions and product development, which lead to the successful development of YCloud.

Through Weijiafu, a PRC technology company, YCloud serves both corporate and individual micro-business owners.

The API interface docking provides efficient, fast, and convenient access to all product inputs in upstream supply chain pools of Weijiafu’s clients.

API interface docking provides a mutual channel for two platforms processing different coding systems, which allows information and data to be shared between the two platforms in a safe and secured way.

For individual micro-business owners, we provide YCloud users with access to various resources, such as local community news, merchandise selection, product pool, commodities, finance, local life.

Through Changtongfu, a PRC technology company, YCloud serves both corporate and individual business owners in the hotel and travel industries.

The API interface docking provides efficient, fast, and convenient access to all hotel and its related product inputs in upstream supply chain pools of Changtongfu’s clients.

For individual hotel owners, we provide YCloud users with access to various resources, such as local community news, hotel and merchandise selection, product pool, commodities, finance, local life.

Revenue Model

In the business of providing technical services and solutions via a social e-commerce platform, we are committed to providing an international cloud-based intelligence system and independently developed the “YCloud” system.

We aim to provide technical and auto-billing management services to micro-business online stores in China through big data analytics, machine learning mechanisms, social network recommendations, and multi-channel data analysis.

We derive our revenue from service fees charged for transactions conducted through YCloud.

We receive 2%-3.5% of the total Gross Merchandise Volume (“GMV”) generated in the platform as a service fee through our agreement with both Weijiafu and Changtongfu, depending on the type of service and industry.

Gross Merchandise Volume is a term used in online retailing to indicate a total sales monetary-value for merchandise sold through a particular marketplace over a certain time frame.

We generally settle the service fee with Weijiafu and Changtongfu within the first ten days of each calendar month.

The global E-commerce SaaS industry is still growing and is in its early stage of development.

We may compete against businesses in varied sectors, many of which are larger than our Company and have a dominant and secure position in other industries or offer other goods and services to consumers and merchants which we do not.

However, most of our competitors only have individual areas of overlap with one of our core areas, including E-commerce SaaS, Store SaaS, Cloud Service, Integrated Payment Service, and Advertising Service, but none compete at all levels.

The YCloud technology possesses several competitive advantages as the following:

User marketing relationship tracking .

This function is dedicated to shaping users' own private domain traffic, turning users into sharers, and reach more potential users with existing users.

Community AI fission and management .

YCloud is a cloud intelligence system that allows all users to have socializing functions, such as group management, group fission, targeted advertising.

YCloud independently researches and develops intelligent robots that can share products with users on a regular basis.

Supply chain system .

YCloud aggregates the resources of actual users of system and categorizes them into four sections:

mall CPS, financial CPS, local life, and preferred mall.

YCloud then shares the pooled resources to all users to strengthens the value of individual users' own merchandise and services, and allows users to provide more possibilities to their consumers.

Payment scenario function .

YCloud system provides micro-business owners with multiple payment methods such as Alipay, WeChat, and UnionPay.

The total order amount is directly entered into the platform to collect funds in separate accounts.

Using YCloud’s technology support, the micro-business owners offer multiple channels of payments to their customers.

Live broadcast + short video system .

YCloud provides users with live broadcast technology functions and short video shooting functions.

YCloud users can share merchandise through live video broadcasts, allowing consumers to have a better perception of the merchandise.

Our primary competitor is China Youzan Limited, which offers online and offline merchants suites of comprehensive solutions comprising third-party payments and various SaaS products and comprehensive service through its e-commerce platform, like marketing and customer engagement tools facilitate the process of transactions between merchants and their customers.

We seek to differentiate ourselves from industry participants by focusing on micro-businesses and specific business industries, the simplicity of our YCloud series, and being recognized by our brand and technology.

Our Growth Strategy

Our ability to grow revenue is affected by, among other things, our ability to innovate and introduce new products and services that merchants and consumers value, consumer spending patterns, the expansion of multiple commerce channels, the growth of mobile devices and micro-business and consumer applications on those devices, the growth of consumers globally with internet and mobile access, the pace of transition from cash and checks to digital forms of payment, and our share of the digital payments market.

Our strategy to drive growth in our business includes the following:

Growing our core business:

the number of people running micro-businesses in China has increased from 60 million in 2019 to 260 million in 2022, which is estimated to further increase to 330 million in 2023.

https://wenku.baidu.com/view/1ff2df18ba4cf7ec4afe04a1b0717fd5370cb2cf.html,2/22/2021).

Through expanding our global capabilities, user base and scale, addressing YCloud users’ everyday needs related to accessing, managing, and moving money, and expanding the adoption of our solutions by micro-business and consumers;

we expect to grow significantly.

Expanding to new industries and sectors:

partnering with micro-businesses to help them grow and expand their business online and in consumer retail stores.

For example, the beauty industry includes cooperation opportunities with beauty professionals and national beauty chain salons;

the tourism industry includes potential cooperation opportunities with 30 million tour guides;

the hotel industry covers about 2 million homestays, inns and star-rated hotels;

live commerce industries encompass both celebrities and mass live broadcast categories and viewership is estimated to reach 234 million in 2020.

https://wenku.baidu.com/view/1ff2df18ba4cf7ec4afe04a1b0717fd5370cb2cf.html ;

https://baijiahao.baidu.com/s?id=1675280752121761141&wfr=spider&for=pc)

Forming strategic partnerships:

we seek to build new strategic partnerships to provide better experiences for our current customers, acquiring new customers by offering greater choice and flexibility, and, overall, reinforcing our role in the ecosystem.

We expect to continue collaborating and expanding into various new fields in the second quarter of 2021.

Seeking global expansion:

organically and through global strategic partnerships, we are expanding into new international markets.

We have accelerated our global deployment and carried out in-depth cooperation with many international social media platforms and social communication companies by demonstrating its strong technical strengths.

The companies we plan to negotiate with include Kakao Talk, Line, Whatsapp, Ohho and Bluechat.

Competitive Advantages

Our business is built on a strong foundation designed to drive growth and differentiate us from our competitors.

We believe that our competitive strengths include the following:

Scale -our scale allows us to drive organic growth, aggregated revenue management and low settlement cost.

Integration -our integrated platform enables application in diversified income scenarios, realized precision marketing, cross-platform integrated technical service capacities and strong integrated services for service enterprise business.

Efficiency- Our high-speed, high-efficiency, and full-category development maintains our leading position.

Technology -we have utilized digitalization, electronic management, electronic data exchange, big data analysis, AI fission technology, revenue management and other technologies to form a strong coordination effect.

Research and Development

Our research and development efforts are focused on improving and enhancing our existing product as well as developing new features of the product.

Because of our common, multi-tenant development architecture, we are able to provide our customers with the right product to help them grow their business.

As a company focusing on leading-edge cloud technology, the recruitment of R&D talent is always our first priority.

As of the date hereof, we have 46 personnel in R&D, accounting for 61% of the Company’s total employees.

We spent approximately RMB 8,807,995 (approximately $1,367,701) on research and development in the fiscal year 2021.

Intellectual Property

We rely on certain intellectual property rights to protect our technology and ensure our competitive position in our industry.

We have two registered copyrights, one registered trademark, and four registered domain names.

We own the following copyrights through our subsidiaries, as noted below:

Issue Country

2020SR0413838

WePay System V1.0

2020SR0318464

Yueshang Social E-commerce Revenue

Management System

2020SR1899615

Changtongfu Revenue Management System V1.0

2020SR1918178

Zhinengfu Revenue Management System V1.0

2021SR0044549

Micro-business Cloud Intelligent System V1.0

We own the following trademark through our subsidiaries:

Trademark Number

Expiration Date

Trademark Name

Issue Country

We have the right to use the following domain registration issued in the PRC:

As of the date of this annual report, there

has been no distribution of dividends or assets among the holding company or the subsidiaries.

We currently do not have any cash management

policies in place.

currently intend to retain all available funds and future earnings, if any, for the operation and expansion of our business and do not

anticipate declaring or paying any dividends in the foreseeable future.

Any future determination related to our dividend policy will

be made at the discretion of our board of directors after considering our financial condition, results of operations, capital requirements,

contractual requirements, business prospects and other factors the board of directors deems relevant, and subject to the restrictions

contained in any future financing instruments.

to the Wyoming Business Corporations Act and our bylaws, our board of directors may authorize and declare a dividend to shareholders

at such time and of such an amount as they think fit if they are satisfied, on reasonable grounds, that immediately following the dividend

the value of our assets will exceed our liabilities and we will be able to pay our debts as they become due.

There is no further Wyoming

statutory restriction on the amount of funds which may be distributed by us by dividend.

the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends

The laws and regulations of the PRC do not currently have any material impact on transfer of cash from NEXT TECHNOLOGY HOLDING INC.

to Hong Kong subsidiaries or from Hong Kong subsidiaries to NEXT TECHNOLOGY HOLDING INC.

There are no restrictions or limitation under

the laws of Hong Kong imposed on the conversion of HK dollar into foreign currencies and the remittance of currencies out of Hong Kong

or across borders and to U.S investors.

PRC regulations permit our PRC subsidiaries to pay dividends to Next Technology only out of their accumulated profits, if any, determined

in accordance with Chinese accounting standards and regulations.

In addition, each of our subsidiaries in China is required to set aside

at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered

Each of such entity in China is also required to further set aside a portion of its after-tax profits to fund the employee welfare

fund, although the amount to be set aside, if any, is determined at the discretion of its board of directors.

Although the statutory

reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings

of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation.

of Business and Industry

provide AI-enabled software development services to our customers in USA, Hong Kong, China and Singapore, which included developing,

designing and implementing various SAAS software solutions for business of all types, including industrials and other businesses.

analytics market is highly competitive and subject to rapidly changing technology and market conditions.

Our ability to compete successfully

depends on a number of factors within and outside of our control.

Some of these factors include software quality, performance and reliability;

the quality of our service and support teams;

marketing and prospecting effectiveness;

the ability to incorporate artificial intelligence

and other technically advanced features;

and our ability to differentiate our products.

Failure to perform in these or other areas may

reduce the demand for our offerings and materially adversely affect our revenue from both existing and prospective customers.

hold substantially all of our bitcoin in custody accounts at Japanese based, institutional-grade custodians that have demonstrated records

of regulatory compliance and information security.

Our bitcoin acquisition strategy generally involves acquiring bitcoin with our liquid

assets that exceed working capital requirements, and from time to time, subject to market conditions, issuing debt or equity securities

or engaging in other capital raising transactions with the objective of using the proceeds to purchase bitcoin.

view our bitcoin holdings as long-term holdings and expect to continue to accumulate bitcoin.

We have not set any specific target for

the amount of bitcoin we seek to hold, and we will continue to monitor market conditions in determining whether to engage in additional

financings to purchase additional bitcoin.

Industry and Market

is a digital asset that is issued by and transmitted through an open-source protocol, known as the Bitcoin protocol, collectively maintained

by a peer-to-peer network of decentralized user nodes.

This network hosts a public transaction ledger, known as the Bitcoin blockchain,

on which bitcoin holdings and all validated transactions that have ever taken place on the Bitcoin network are recorded.

bitcoin are stored in individual “wallet” functions, which associate network public addresses with one or more “private

keys” that control the transfer of bitcoin.

The Bitcoin blockchain can be updated without any single entity owning or operating

of New Bitcoin and Limits on Supply

bitcoin is created and allocated by the Bitcoin protocol through a “mining” process that rewards users that validate transactions

in the Bitcoin blockchain.

Validated transactions are added in “blocks” approximately every 10 minutes.

The mining process

serves to validate transactions and secure the Bitcoin network.

Mining is a competitive and costly operation that requires a large amount

of computational power to solve complex mathematical algorithms.

This expenditure of computing power is known as “proof of work.”

To incentivize miners to incur the costs of mining bitcoin, the Bitcoin protocol rewards miners that successfully validate a block of

transactions with newly generated bitcoin.

Bitcoin protocol limits the total number of bitcoin that can be generated over time to 21 million.

The current reward for miners that

successfully validate a block of transactions is 6.25 bitcoin per mined block.

Based on current mining rates, we anticipate the reward

will decrease by half to 3.125 bitcoin per mined block sometime in April 2024.

This decrease in mining reward is referred to as a bitcoin

halving, and it occurs after every 210,000 blocks are mined, which has historically occurred approximately every four years.

Modifications

to the Bitcoin Protocol

is an open-source network that has no central authority, so no one person can unilaterally make changes to the software that runs the

However, there is a core group of developers that maintain the code for the Bitcoin protocol, and they can propose changes to

the source code and release periodic updates and other changes.

Unlike most software that has a central entity that can push updates

to users, bitcoin is a peer-to-peer network in which individual network participants, called nodes, decide whether to upgrade the software

and accept the new changes.

As a practical matter, a modification becomes part of the Bitcoin protocol only if the proposed changes are

accepted by participants collectively having the most processing power, known as hash rate, on the network.

If a certain percentage of

the nodes reject the changes, then a “fork” takes place and participants can choose the version of the software they want

Industry Participants

primary Bitcoin industry participants are miners, investors and traders, digital asset exchanges and service providers, including custodians,

brokers, payment processors, wallet providers and financial institutions.

Miners range from bitcoin enthusiasts to professional mining operations that design and build dedicated mining machines and data centers,

including mining pools, which are groups of miners that act cohesively and combine their processing power to mine bitcoin blocks.

Bitcoin investors and traders include individuals and institutional investors who, directly or indirectly, purchase, hold,

and sell bitcoin or bitcoin-based derivatives.

On January 10, 2024, the Securities and Exchange Commission (“SEC”) issued

an order approving several applications for the listing and trading of shares of spot bitcoin exchange-traded products (“ETPs”)

national securities exchanges.

While the SEC had previously approved exchange-traded funds where the underlying assets were bitcoin

futures contracts, this order represents the first time the SEC has approved the listing and trading of ETPs that acquire, hold and sell

bitcoin directly.

ETPs can be bought and sold on a stock exchange like traditional stocks, and provide investors with another means of

gaining economic exposure to bitcoin through traditional brokerage accounts.

Asset Exchanges.

Digital asset exchanges provide trading venues for purchases and sales of bitcoin in exchange for fiat or other digital

Bitcoin can be exchanged for fiat currencies, such as the U.S.

dollar, at rates of exchange determined by market forces on bitcoin

trading platforms, which are not regulated in the same manner as traditional securities exchanges.

In addition to these platforms, over-the-counter

markets and derivatives markets for bitcoin also exist.

The value of bitcoin within the market is determined, in part, by the supply

of and demand for bitcoin in the global bitcoin market, market expectations for the adoption of bitcoin as a store of value, the number

of merchants that accept bitcoin as a form of payment, and the volume of peer-to-peer transactions, among other factors.

For a discussion

of risks associated with digital asset exchanges, see “Item 1A.

Risk Factors—Risks Related to Our Bitcoin Acquisition Strategy

and Holdings—Due to the unregulated nature and lack of transparency surrounding the operations of many bitcoin trading venues,

bitcoin trading venues may experience greater fraud, security failures or regulatory or operational problems than trading venues for

more established asset classes, which may result in a loss of confidence in bitcoin trading venues and adversely affect the value of

our bitcoin.”

Service providers offer a multitude of services to other participants in the Bitcoin industry, including custodial and trade

execution services, commercial and retail payment processing, loans secured by bitcoin collateral, and financial advisory services.

adoption of the Bitcoin network continues to materially increase, we anticipate that service providers may expand the currently available

range of services and that additional parties will enter the service sector for the Bitcoin network.

the business of providing AI-enable software development services and solutions, we derive our revenue from AI-software development and

technical supporting services.

AI-enable software development market is highly competitive and subject to rapidly changing technology and market conditions.

to compete successfully depends on a number of factors within and outside of our control.

Some of these factors include software quality,

performance and reliability;

the quality of our service and support teams;

marketing and prospecting effectiveness;

the ability to incorporate

artificial intelligence and other technically advanced features;

and our ability to differentiate our products.

Failure to perform in

these or other areas may reduce the demand for our offerings and materially adversely affect our revenue from both existing and prospective

have the right to use the following domain registration issued in the USA:

Expiration Date

Registration Agency

Alibaba Cloud Computing (Beijing) Co., Ltd.

wetradegroup.net

Alibaba Cloud Computing (Beijing) Co., Ltd.

ycloud.online

Alibaba Cloud Computing (Beijing) Co., Ltd.

Xiaoshang.tech

Our Employees

As of the date hereof and in the fiscal year 2022, we have, 35 full-time employees.

The following table sets forth the number of our employees by function:

Functional Area

Number of Employees

Human Resource

General and Administrative

Financial Department

Strategic Department

We provide employee benefits for each employee in accordance with Chinese law.

These include pension, medical, unemployment, work injury and maternity insurance, and a housing provident fund.

Our employees have not formed any employee union or association.

We believe we maintain a good working relationship with our employees and have not experienced any difficulty in recruiting staff for our operations.

We have experienced, and expect to continue to experience, seasonal fluctuations in our results of operations.

Our revenues tend to increase as spending rises during the holiday seasons and/or closer to the end-of-year as holiday spending increases in the micro-business industry.

We maintain certain insurance policies to safeguard us against risks and unexpected events.

For example, we provide social security insurance including pension insurance, unemployment insurance, work-related injury insurance and medical insurance for our employees in compliance with applicable PRC laws.

We do not maintain business interruption insurance or product liability insurance, which are not mandatory under PRC laws.

We do not maintain key man insurance, insurance policies covering damages to our network infrastructures or information technology systems nor any insurance policies for our properties.

During the fiscal years 2022 and 2021, we did not make any material insurance claims in relation to our business.

Legal Proceedings

There are no active legal proceedings pending or threatened against the Company.

However, from time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business.

Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise.

This section sets forth a summary of the principal PRC laws and regulations relevant to our business and operations in China.

Regulations on Overseas Listings

On February 17, 2023, CSRC promulgated the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises (the “Trial Measures”), which became effective on March 31, 2023.

On the same date, the CSRC circulated Supporting Guidance Rules No.

wetradegroup.technology

of the date hereof and in the fiscal year 2023, we have, 8 full-time employees.

The following table sets forth the number of our employees

Administrative

provide employee benefits for each employee in accordance with Hong Kong law.

These include pension, medical, unemployment, work

injury and maternity insurance, and a housing provident fund.

employees have not formed any employee union or association.

We believe we maintain a good working relationship with our employees and

have not experienced any difficulty in recruiting staff for our operations.

maintain certain insurance policies to safeguard us against risks and unexpected events.

For example, we provide social security insurance

including pension insurance, unemployment insurance, work-related injury insurance and medical insurance for our employees in compliance

with applicable Hong Kong and PRC laws.

We do not maintain business interruption insurance or product liability insurance, which are

not mandatory under Hong Kong and PRC laws.

We do not maintain key man insurance, insurance policies covering damages to our network

infrastructures or information technology systems nor any insurance policies for our properties.

During the fiscal years 2023 and 2022,

we did not make any material insurance claims in relation to our business.

mid-September 2023, Mr.

Zheng Dai, Mr.

Pijun Liu, and certain individuals under their control (the “Unauthorized Persons”)

had been falsely and repeatedly holding themselves out as representing and/or authorized to represent the Company.

For example, the Unauthorized

Persons caused to be filed certain current reports on Forms 8-K dated September 28, 2023 and October 10, 2023, in which they purported

to appoint new officers and directors.

These filings were false and should be disregarded.

On September 28, 2023, a derivative lawsuit was filed

by certain purported shareholders affiliated with the Unauthorized Persons in the United States District Court for the District of Wyoming

against certain officers and directors of the Company, seeking control of the Company.

This case was dismissed without prejudice on

October 18, 2023.

October 18, 2023, the same individuals who filed the above-described derivative suit filed a direct action against the Company in the

Chancery Court of the State of Wyoming (the “Chancery Court”), again seeking control of the Company.

The Company responded

to the lawsuit, sought a temporary restraining order restraining the plaintiff-shareholders and their affiliates (including the Unauthorized

Persons) from claiming be in control of the Company.

November 7, 2023, the Chancery Court issued a temporary restraining order substantially restraining the plaintiff-shareholders and their

affiliates from claiming to act on behalf of the Company.

The lawsuit remains pending as at reporting date.

On November 30, 2023, the Company

responded to plaintiffs’ arguments that they controlled the Company, pointing out that plaintiffs’ case (Mr.

Dai Zheng and

his affiliates) was largely built upon forged signatures and other fabricated materials.

In response, the plaintiffs withdrew their opposition

to the Company’s request for an injunction.

On January 5, 2024, the Chancery

Court entered a preliminary injunction order (attached hereto).

Specifically, the order restrained Mr.

Dai Zheng and his affiliates

from the following conduct:

(i) acting as or holding themselves

out as majority shareholders, directors, executives, or employees of the Company and its affiliates;

(ii) making any attempts to

contact the SEC, Nasdaq, government authorities, or make any filing or press release on behalf of the Company;

(iii) making any attempts to

change the board composition and executive team;

(iv) disseminating false statements

regarding the Company and its leadership;

(v) making any attempts to contact

the Company’s service providers, including auditors, stock transfer agents, and filing agents;

(vi) making any attempts to

issue the Company’s shares.

section sets forth a summary of the principal PRC laws and regulations relevant to our business and operations in China.

on Overseas Listings

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

(the “Trial Measures”), which became effective on March 31, 2023.

On the same date, the CSRC circulated Supporting Guidance

1 through No.

5, Notes on the Trial Measures, Notice on Administration Arrangements for the Filing of Overseas Listings by Domestic Enterprises and relevant CSRC Answers to Reporter Questions (collectively, the “Guidance Rules and Notice”) on the CSRC’s official website.

Pursuant to the Trial Measures, PRC domestic enterprises that have submitted valid applications for overseas offerings and listing but have not obtained the approval from the relevant overseas regulatory authority or overseas stock exchanges shall complete filings with the CSRC prior to their overseas offerings and listings.

According to the Notice on the Administrative Arrangements for the Filing of the Overseas Securities Offering and Listing by Domestic Companies from the CSRC, or “the CSRC Notice”, the domestic companies that have already been listed overseas before the effective date of the Trial Measures (namely, March 31, 2023) shall be deemed as existing issuers (the “Existing Issuers”).

Existing Issuers are not required to complete the filing procedures immediately, and they shall be required to file with the CSRC for any subsequent offerings.

On February 24, 2023, the CSRC, together with the MOF, National Administration of State Secrets Protection and National Archives Administration of China, revised the Provisions on Strengthening Confidentiality and Archives Administration for Overseas Securities Offering and Listing, which were issued by the CSRC and National Administration of State Secrets Protection and National Archives Administration of China in 2009, or the “Provisions.” The revised Provisions were issued under the title the “Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies”, and came into effect on March 31, 2023 together with the Trial Measures.

One of the major revisions to the revised Provisions is expanding their application to cover indirect overseas offering and listing, as is consistent with the Trial Measures.

The revised Provisions require that, among other things, (a) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according to law, and file with the secrecy administrative department at the same level;

and (b) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities including securities companies, securities service providers and overseas regulators, any other documents and materials that, if leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations.

In August 2006, six PRC regulatory authorities, including 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.

Our PRC legal counsel, Beijing DOCVIT Law Firm, has advised us that, based on its understanding of the current PRC laws and regulations, our corporate structure and arrangements are not subject to the M&A Rules.

However, our PRC legal counsel has further advised us that 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.

Regulations on Internet Information Security and Privacy Protection

In November 2016, the Standing Committee of the National People’s Congress, or the SCNPC, promulgated the Cyber Security Law of the PRC , or the Cyber Security Law, which became effective on June 1, 2017.

The Cyber Security Law requires that a network operator, which includes, among others, internet information services providers, take technical measures and other necessary measures in accordance with applicable laws and regulations and the compulsory requirements of the national and industrial standards to safeguard the safe and stable operation of its networks.

We are subject to such requirements as we are operating website and mobile application and providing certain internet services mainly through our mobile application.

The Cyber Security Law further requires internet information service providers to formulate contingency plans for network security incidents, report to the competent departments immediately upon the occurrence of any incident endangering cyber security and take corresponding remedial measures.

Internet information service providers are also required to maintain the integrity, confidentiality and availability of network data.

The Cyber Security Law reaffirms the basic principles and requirements specified in other existing laws and regulations on personal data protection, such as the requirements on the collection, use, processing, storage and disclosure of personal data, and internet information service providers being required to take technical and other necessary measures to ensure the security of the personal information they have collected and prevent the personal information from being divulged, damaged or lost.

Any violation of the Cyber Security Law may subject the internet information service provider to warnings, fines, confiscation of illegal gains, revocation of licenses, cancellation of filings, shutdown of websites or criminal liabilities.

As of the date hereof, the Company is in compliance with the Cyber Security Law.

PRC Laws and Regulations on Foreign Investment

Investment in the PRC by foreign investors and foreign-invested enterprises shall comply with the Catalogue for the Guidance of Foreign Investment Industries (2020 Revision) (the “Catalogue”), which was last amended and issued by MOFCOM and National Development and Reform Commission (NDRC) on December 27, 2020 and became effective since January 27, 2021, and the Special Management Measures for Foreign Investment Access (2019 version), or the Negative List, which came into effect on July 30, 2019.

The Catalogue and the Negative List contains specific provisions guiding market access for foreign capital and stipulates in detail the industry sectors grouped under the categories of encouraged industries, restricted industries and prohibited industries.

Any industry not listed on the Negative List is a permitted industry unless otherwise prohibited or restricted by other PRC laws or regulations.

On March 15, 2019, the National People’s Congress approved the Foreign Investment Law of the PRC, or the Foreign Investment Law, which came into effect on January 1, 2020, repealing simultaneously the Law of the PRC on Sino-foreign Equity Joint Ventures, the Law of the PRC on Wholly Foreign-owned Enterprises and the Law of the PRC on Sino-foreign Cooperative Joint Ventures.

The Foreign Investment Law adopts the management system of pre-establishment national treatment and negative list for foreign investment.

Policies in support of enterprises shall apply equally to foreign-funded enterprises according to laws and regulations.

Foreign investment enterprises shall be guaranteed that they could equally participate in the setting of standards, and the compulsory standards formulated by the State shall be equally applied.

Fair competition for foreign investment enterprises to participate in government procurement activities shall be protected.

5, Notes on the Trial Measures, Notice on Administration Arrangements for the Filing of Overseas Listings by

Domestic Enterprises and relevant CSRC Answers to Reporter Questions (collectively, the “Guidance Rules and Notice”) on the

CSRC’s official website.

Pursuant to the Trial Measures, PRC domestic enterprises that have submitted valid applications for overseas

offerings and listing but have not obtained the approval from the relevant overseas regulatory authority or overseas stock exchanges

shall complete filings with the CSRC prior to their overseas offerings and listings.

to the Notice on the Administrative Arrangements for the Filing of the Overseas Securities Offering and Listing by Domestic Companies

from the CSRC, or “the CSRC Notice”, the domestic companies that have already been listed overseas before the effective date

of the Trial Measures (namely, March 31, 2023) shall be deemed as existing issuers (the “Existing Issuers”).

Existing Issuers

are not required to complete the filing procedures immediately, and they shall be required to file with the CSRC for any subsequent offerings.

February 24, 2023, the CSRC, together with the MOF, National Administration of State Secrets Protection and National Archives Administration

of China, revised the Provisions on Strengthening Confidentiality and Archives Administration for Overseas Securities Offering and Listing,

which were issued by the CSRC and National Administration of State Secrets Protection and National Archives Administration of China in

2009, or the “Provisions.” The revised Provisions were issued under the title the “Provisions on Strengthening Confidentiality

and Archives Administration of Overseas Securities Offering and Listing by Domestic Companies”, and came into effect on March 31,

2023 together with the Trial Measures.

One of the major revisions to the revised Provisions is expanding their application to cover indirect

overseas offering and listing, as is consistent with the Trial Measures.

The revised Provisions require that, among other things, (a)

a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant

individuals or entities including securities companies, securities service providers and overseas regulators, any documents and materials

that contain state secrets or working secrets of government agencies, shall first obtain approval from competent authorities according

to law, and file with the secrecy administrative department at the same level;

and (b) a domestic company that plans to, either directly

or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and entities including securities

companies, securities service providers and overseas regulators, any other documents and materials that, if leaked, will be detrimental

to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable national regulations.

August 2006, six PRC regulatory authorities, including 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.

PRC legal counsel, Beijing DOCVIT Law Firm, has advised us that, based on its understanding of the current PRC laws and regulations,

our corporate structure and arrangements are not subject to the M&A Rules.

However, our PRC legal counsel has further advised us

that 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.

on Internet Information Security and Privacy Protection

November 2016, the Standing Committee of the National People’s Congress, or the SCNPC, promulgated the Cyber Security Law

of the PRC , or the Cyber Security Law, which became effective on June 1, 2017.

The Cyber Security Law requires that a network operator,

which includes, among others, internet information services providers, take technical measures and other necessary measures in accordance

with applicable laws and regulations and the compulsory requirements of the national and industrial standards to safeguard the safe and

stable operation of its networks.

We are subject to such requirements as we are operating website and mobile application and providing

certain internet services mainly through our mobile application.

The Cyber Security Law further requires internet information service

providers to formulate contingency plans for network security incidents, report to the competent departments immediately upon the occurrence

of any incident endangering cyber security and take corresponding remedial measures.

information service providers are also required to maintain the integrity, confidentiality and availability of network data.

Security Law reaffirms the basic principles and requirements specified in other existing laws and regulations on personal data protection,

such as the requirements on the collection, use, processing, storage and disclosure of personal data, and internet information service

providers being required to take technical and other necessary measures to ensure the security of the personal information they have

collected and prevent the personal information from being divulged, damaged or lost.

Any violation of the Cyber Security Law may subject

the internet information service provider to warnings, fines, confiscation of illegal gains, revocation of licenses, cancellation of

filings, shutdown of websites or criminal liabilities.

of the date hereof, the Company is in compliance with the Cyber Security Law.

Laws and Regulations on Foreign Investment

in the PRC by foreign investors and foreign-invested enterprises shall comply with the Catalogue for the Guidance of Foreign Investment

Industries (2020 Revision) (the “Catalogue”), which was last amended and issued by MOFCOM and National Development and Reform

Commission (NDRC) on December 27, 2020 and became effective since January 27, 2021, and the Special Management Measures for Foreign Investment

Access (2019 version), or the Negative List, which came into effect on July 30, 2019.

The Catalogue and the Negative List contains specific

provisions guiding market access for foreign capital and stipulates in detail the industry sectors grouped under the categories of encouraged

industries, restricted industries and prohibited industries.

Any industry not listed on the Negative List is a permitted industry unless

otherwise prohibited or restricted by other PRC laws or regulations.

March 15, 2019, the National People’s Congress approved the Foreign Investment Law of the PRC, or the Foreign Investment Law, which

came into effect on January 1, 2020, repealing simultaneously the Law of the PRC on Sino-foreign Equity Joint Ventures, the Law of the

PRC on Wholly Foreign-owned Enterprises and the Law of the PRC on Sino-foreign Cooperative Joint Ventures.

The Foreign Investment Law

adopts the management system of pre-establishment national treatment and negative list for foreign investment.

Policies in support of

enterprises shall apply equally to foreign-funded enterprises according to laws and regulations.

Foreign investment enterprises shall

be guaranteed that they could equally participate in the setting of standards, and the compulsory standards formulated by the State shall

be equally applied.

Fair competition for foreign investment enterprises to participate in government procurement activities shall be

The Foreign Investment Law also stipulates the protection on intellectual property rights and trade secrets.

The State also establishes information reporting system and national security review system according to the Foreign Investment Law.

PRC Laws and Regulations on Wholly Foreign-Owned Enterprises

The establishment, operation and management of corporate entities in China are governed by the PRC Company Law, which was promulgated by the SCNPC on December 29, 1993 and became effective on July 1, 1994.

It was last amended on October 26, 2018 and the amendments became effective on October 26, 2018.

Under the PRC Company Law, companies are generally classified into two categories, namely, limited liability companies and joint stock limited companies.

The PRC Company Law also applies to limited liability companies and joint stock limited companies with foreign investors.

Where there are otherwise different provisions in any law on foreign investment, such provisions shall prevail.

The Law of the PRC on Wholly Foreign-invested Enterprises was promulgated and became effective on April 12, 1986, and was last amended and became effective on October 1, 2016.

The Implementing Regulations of the PRC Law on Foreign-invested Enterprises were promulgated by the State Council on October 28, 1990.

The State also

establishes information reporting system and national security review system according to the Foreign Investment Law.

Laws and Regulations on Wholly Foreign-Owned Enterprises

establishment, operation and management of corporate entities in China are governed by the PRC Company Law, which was promulgated by

the SCNPC on December 29, 1993 and became effective on July 1, 1994.

It was last amended on October 26, 2018 and the amendments became

effective on October 26, 2018.

Under the PRC Company Law, companies are generally classified into two categories, namely, limited liability

companies and joint stock limited companies.

The PRC Company Law

also applies to limited liability companies and joint stock limited

companies with foreign investors.

Where there are otherwise different provisions in any law on foreign investment, such provisions shall

Law of the PRC on Wholly Foreign-invested Enterprises was promulgated and became effective on April 12, 1986, and was last amended and

became effective on October 1, 2016.

The Implementing Regulations of the PRC Law on Foreign-invested Enterprises were promulgated by

the State Council on October 28, 1990.

They were last amended on February 19, 2014 and the amendments became effective on March 1, 2014.

The Provisional Measures on Administration of Filing for Establishment and Change of Foreign Investment Enterprises were promulgated by MOFCOM and became effective on October 8, 2016, and were last amended on July 20, 2017 with immediate effect.

The above-mentioned laws form the legal framework for the PRC Government to regulate Foreign-invested Enterprises.

These laws and regulations govern the establishment, modification, including changes to registered capital, shareholders, corporate form, merger and split, dissolution and termination of Foreign-invested Enterprises.

According to the above regulations, a Foreign-invested Enterprise should get approval by MOFCOM before its establishment and operation.

Yueshang Beijing is a Foreign-invested Enterprise since established, and has obtained the approval of the local administration of MOFCOM.

Its establishment and operation are in compliance with the above-mentioned laws.

Each of Yueshang Hainan and Yueshang Hunan is a PRC domestic company, and it is not subject to the record-filling or examination applicable to Foreign-invested Enterprises.

PRC Laws and Regulations on Trademarks

The Trademark Law of the PRC was adopted at the 24th meeting of the SCNPC on August 23, 1982.

Three amendments were made on February 22, 1993, October 27, 2001 and August 30, 2013.

The last amendment was implemented on May 1, 2014.

The Regulations on the Implementation of the Trademark Law of the PRC were promulgated by the State Council of the People’s Republic of China on August 3, 2002, which took effect on September 15, 2002.

It was revised on April 29, 2014 and became effective as of May 1, 2014.

According to the Trademark Law and the implementing regulations, a trademark which has been approved and registered by the trademark office is a registered trademark, including a trademark of goods, services, collective trademark and certification trademark.

The trademark registrant shall enjoy the exclusive right to use the trademark and shall be protected by law.

The trademark law also specifies the scope of registered trademarks, procedures for registration of trademarks and the rights and obligations of trademark owners.

We are currently holding 7 registered trademarks and enjoy the corresponding rights.

PRC Laws and Regulations on Copyrights

The Copyright Law of the People’s Republic of China (Revised in 2010), or the Copyright Law, provides that Chinese citizens, legal persons, or other organizations shall, whether published or not, enjoy copyright in their works, which include, among others, works of literature, art, natural science, social science, engineering technology and computer software.

Copyright owners enjoy certain legal rights, including right of publication, right of authorship and right of reproduction.

The purpose of the Copyright Law aims to encourage the creation and dissemination of works that are beneficial for the construction of socialist spiritual civilization and material civilization and promote the development and prosperity of Chinese culture.

The term of protection for copyrighted software of legal persons is fifty years and ends on December 31 of the 50th year from the date of first publishing of the software.

In order to further implement the Computer Software Protection Regulations promulgated by the State Council in 2001, and amended subsequently, the State Copyright Bureau issued the Computer Software Copyright Registration Procedures in 2002, which apply to software copyright registration, license contract registration and transfer contract registration.

As of the date hereof, we had registered 5 copyright of works in China.

PRC Laws and Regulations on Domain Names

The domain names are protected under the Administrative Measures on the Internet Domain Names of China promulgated by MIIT on November 5, 2004 and effective on December 20, 2004, and will be replaced by the Administrative Measures on the Internet Domain Names promulgated by MIIT on August 24, 2017, which became effective on November 1, 2017.

MIIT is the major regulatory body responsible for the administration of the PRC Internet domain names, under supervision of which China Internet Network Information Center, or CNNIC, is responsible for the daily administration of CN domain names and Chinese domain names.

On September 25, 2002, CNNIC promulgated the Implementation Rules of Registration of Domain Name, or the CNNIC Rules, which was renewed on June 5, 2009 and May 29, 2012, respectively.

Pursuant to the Administrative Measures on the Internet Domain Names and the CNNIC Rules, the registration of domain names adopts the “first-to-file” principle and the registrant shall complete the registration via the domain name registration service institutions.

In the event of a domain name dispute, the disputed parties may lodge a complaint to the designated domain name dispute resolution institution to trigger the domain name dispute resolution procedure in accordance with the CNNIC Measures on Resolution of the Top Level Domains Disputes, file a suit to the People’s Court or initiate an arbitration procedure.

As of the date hereof, we have registered 6 domain names in China.

PRC Laws and Regulations on Foreign Exchange

Registration of Foreign Investment Enterprises

Pursuant to the Notice of State Administration of Foreign Exchange on Promulgation of the Provisions on Foreign Exchange Control on Direct Investments in China by Foreign Investors promulgated by the SAFE, or the Notice, upon establishment of a foreign investment enterprise pursuant to the law, registration formalities shall be completed with the foreign exchange bureau.

Upon completion of registration formalities by the entities involved in direct investments in China, the entities may open accounts for direct investments in China such as preliminary expense account, capital fund account and asset realization account, etc.

The Provisional Measures on Administration of Filing for Establishment and Change of Foreign Investment Enterprises were promulgated

by MOFCOM and became effective on October 8, 2016, and were last amended on July 20, 2017 with immediate effect.

The above-mentioned

laws form the legal framework for the PRC Government to regulate Foreign-invested Enterprises.

These laws and regulations govern the

establishment, modification, including changes to registered capital, shareholders, corporate form, merger and split, dissolution and

termination of Foreign-invested Enterprises.

to the above regulations, a Foreign-invested Enterprise should get approval by MOFCOM before its establishment and operation.

Laws and Regulations on Foreign Exchange

of Foreign Investment Enterprises

to the Notice of State Administration of Foreign Exchange on Promulgation of the Provisions on Foreign Exchange Control on Direct Investments

in China by Foreign Investors promulgated by the SAFE, or the Notice, upon establishment of a foreign investment enterprise pursuant

to the law, registration formalities shall be completed with the foreign exchange bureau.

Upon completion of registration formalities

by the entities involved in direct investments in China, the entities may open accounts for direct investments in China such as preliminary

expense account, capital fund account and asset realization account, etc.

with the bank based on the actual needs.

Upon completion of such registration formalities, foreign investment enterprises could also conduct settlement when contributing foreign exchange funds, and remit funds overseas in the event of capital reduction, liquidation, advance recovery of investment, profit distribution, etc.

As of the date of hereof, Yueshang Beijing has completed the foreign exchange registration formalities upon establishment.

Subsequently, WeTrade Technology, the sole shareholder of Yueshang Beijing, is able to contribute capital to or receive distributions and dividends from Yueshang Beijing.

PRC Laws and Regulations on Dividend Distribution

The principal regulations governing distribution of dividends of foreign-invested enterprises include the Foreign-Invested Enterprise Law, that became effective on January 1, 2020, and its implementation rules.

Under these laws and regulations, wholly foreign-owned enterprises in China may pay dividends only out of their accumulated after-tax profits, if any, determined in accordance with PRC accounting standards and regulations.

In addition, when a wholly foreign-owned enterprise in China distributes its after-tax profits of a fiscal year, it shall allocate 10% of the profits to the company’s statutory common reserve fund.

If the accumulated amount of the company’s statutory reserve fund is more than 50% of the company’s registered capital, the company is no longer required to allocate more funds to the reserve.

Wholly foreign-owned companies may, at their discretion, allocate a portion of their after-tax profits based on PRC accounting standards to staff welfare and bonus funds.

Upon completion of

such registration formalities, foreign investment enterprises could also conduct settlement when contributing foreign exchange funds,

and remit funds overseas in the event of capital reduction, liquidation, advance recovery of investment, profit distribution, etc.

Laws and Regulations on Dividend Distribution

principal regulations governing distribution of dividends of foreign-invested enterprises include the Foreign-Invested Enterprise Law,

that became effective on January 1, 2020, and its implementation rules.

Under these laws and regulations, wholly foreign-owned enterprises

in China may pay dividends only out of their accumulated after-tax profits, if any, determined in accordance with PRC accounting standards

and regulations.

In addition, when a wholly foreign-owned enterprise in China distributes its after-tax profits of a fiscal year, it

shall allocate 10% of the profits to the company’s statutory common reserve fund.

If the accumulated amount of the company’s

statutory reserve fund is more than 50% of the company’s registered capital, the company is no longer required to allocate more

funds to the reserve.

Wholly foreign-owned companies may, at their discretion, allocate a portion of their after-tax profits based on

PRC accounting standards to staff welfare and bonus funds.

These reserves are not distributable as cash dividends.

PRC Laws and Regulations on Taxation

Enterprise Income Tax

The Enterprise Income Tax Law of the People’s Republic of China (the “EIT Law”) was promulgated by the Standing Committee of the National People’s Congress on March 16, 2007 and became effective on January 1, 2008, and was later amended on February 24, 2017 and on December 29, 2018 separately.

The Implementation Rules of the EIT Law (the “Implementation Rules”) were promulgated by the State Council on December 6, 2007 and became effective on January 1, 2008.

According to the EIT Law and the Implementation Rules, enterprises are divided into resident enterprises and non-resident enterprises.

Resident enterprises shall pay enterprise income tax on their incomes obtained in and outside the PRC at the rate of 25%.

Non-resident enterprises setting up institutions in the PRC shall pay enterprise income tax on the incomes obtained by such institutions in and outside the PRC at the rate of 25%.

Non-resident enterprises with no institutions in the PRC, and non-resident enterprises whose incomes having no substantial connection with their institutions in the PRC, shall pay enterprise income tax on their incomes obtained in the PRC at a reduced rate of 10%.

The Arrangement between the PRC and Hong Kong Special Administrative Region for the Avoidance of Double Taxation the Prevention of Fiscal Evasion with respect to Taxes on Income (the “Arrangement”) was promulgated by the State Administration of Taxation (“SAT”) on August 21, 2006 and came into effect on December 8, 2006.

According to the Arrangement, a company incorporated in Hong Kong will be subject to withholding tax at the lower rate of 5% on dividends it receives from a company incorporated in the PRC if it holds a 25% interest or more in the PRC company.

The Notice on the Understanding and Identification of the Beneficial Owners in the Tax Treaty (the “Notice”) was promulgated by SAT and became effective on October 27, 2009.

According to the Notice, a beneficial ownership analysis will be used based on a substance-over-form principle to determine whether or not to grant tax treaty benefits.

Yueshang Beijing and its subsidiaries are resident enterprises and pay EIT tax at the rate of 25% in the PRC.

It is more likely than not that the Company and its offshore subsidiary would be treated as a non-resident enterprise for PRC tax purposes.

Value-added Tax

Pursuant to the Provisional Regulations on Value-added Tax of the PRC, or the VAT Regulations, which were promulgated by the State Council on December 13, 1993, took effect on January 1, 1994, and were amended on November 10, 2008, February 6, 2016, and November 19, 2017, respectively, and the Rules for the Implementation of the Provisional Regulations on Value-added Tax of the PRC, which were promulgated by the MOF on December 25, 1993, and were amended on December 15, 2008, and October 28, 2011, respectively, entities and individuals that sell goods or labor services of processing, repair or replacement, sell services, intangible assets, or immovables, or import goods within the territory of the People’s Republic of China are taxpayers of value-added tax.

The VAT rate is 17% for taxpayers selling goods, labor services, or tangible movable property leasing services or importing goods, except otherwise specified;

11% for taxpayers selling services of transportation, postal, basic telecommunications, construction and lease of immovable, selling immovable, transferring land use rights, selling and importing other specified goods including fertilizers;

Laws and Regulations on Taxation

Enterprise Income Tax Law of the People’s Republic of China (the “EIT Law”) was promulgated by the Standing Committee

of the National People’s Congress on March 16, 2007 and became effective on January 1, 2008, and was later amended on February

24, 2017 and on December 29, 2018 separately.

The Implementation Rules of the EIT Law (the “Implementation Rules”) were promulgated

by the State Council on December 6, 2007 and became effective on January 1, 2008.

According to the EIT Law and the Implementation Rules,

enterprises are divided into resident enterprises and non-resident enterprises.

Resident enterprises shall pay enterprise income tax

on their incomes obtained in and outside the PRC at the rate of 25%.

Non-resident enterprises setting up institutions in the PRC shall

pay enterprise income tax on the incomes obtained by such institutions in and outside the PRC at the rate of 25%.

Non-resident enterprises

with no institutions in the PRC, and non-resident enterprises whose incomes having no substantial connection with their institutions

in the PRC, shall pay enterprise income tax on their incomes obtained in the PRC at a reduced rate of 10%.

Arrangement between the PRC and Hong Kong Special Administrative Region for the Avoidance of Double Taxation the Prevention of Fiscal

Evasion with respect to Taxes on Income (the “Arrangement”) was promulgated by the State Administration of Taxation (“SAT”)

on August 21, 2006 and came into effect on December 8, 2006.

According to the Arrangement, a company incorporated in Hong Kong will be

subject to withholding tax at the lower rate of 5% on dividends it receives from a company incorporated in the PRC if it holds a 25%

interest or more in the PRC company.

The Notice on the Understanding and Identification of the Beneficial Owners in the Tax Treaty (the

“Notice”) was promulgated by SAT and became effective on October 27, 2009.

According to the Notice, a beneficial ownership

analysis will be used based on a substance-over-form principle to determine whether or not to grant tax treaty benefits.

to the Provisional Regulations on Value-added Tax of the PRC, or the VAT Regulations, which were promulgated by the State Council on

December 13, 1993, took effect on January 1, 1994, and were amended on November 10, 2008, February 6, 2016, and November 19, 2017, respectively,

and the Rules for the Implementation of the Provisional Regulations on Value-added Tax of the PRC, which were promulgated by the MOF

on December 25, 1993, and were amended on December 15, 2008, and October 28, 2011, respectively, entities and individuals that sell goods

or labor services of processing, repair or replacement, sell services, intangible assets, or immovables, or import goods within the territory

of the People’s Republic of China are taxpayers of value-added tax.

The VAT rate is 17% for taxpayers selling goods, labor services,

or tangible movable property leasing services or importing goods, except otherwise specified;

11% for taxpayers selling services of transportation,

postal, basic telecommunications, construction and lease of immovable, selling immovable, transferring land use rights, selling and importing

other specified goods including fertilizers;

6% for taxpayers selling services or intangible assets.

According to the Notice on the Adjustment to the Value-added Tax Rates issued by the SAT and the MOF on April 4, 2018, where taxpayers make VAT taxable sales or import goods, the applicable tax rates shall be adjusted from 17% to 16% and from 11% to 10%, respectively.

Subsequently, the Notice on Policies for Deepening Reform of Value-added Tax was issued by the SAT, the MOF and the General Administration of Customs on March 30, 2019 and took effective on April 1, 2019, which further adjusted the applicable tax rate for taxpayers making VAT taxable sales or importing goods.

to the Notice on the Adjustment to the Value-added Tax Rates issued by the SAT and the MOF on April 4, 2018, where taxpayers make VAT

taxable sales or import goods, the applicable tax rates shall be adjusted from 17% to 16% and from 11% to 10%, respectively.

Subsequently,

the Notice on Policies for Deepening Reform of Value-added Tax was issued by the SAT, the MOF and the General Administration of Customs

on March 30, 2019 and took effective on April 1, 2019, which further adjusted the applicable tax rate for taxpayers making VAT taxable

sales or importing goods.

The applicable tax rates shall be adjusted from 16% to 13% and from 10% to 9%, respectively.

The VAT rate applicable to the company is currently 6%;

The VAT rate applicable

to the company is currently 6%;

the income tax rate applicable to the company is 25%.

We are also eligible for receiving tax refund according to certain favorable government policies starting from 2021.

Dividend Withholding Tax

The Enterprise Income Tax Law states that since January 1, 2008, an income tax rate of 10% will normally be applicable to dividends declared to non-PRC resident investors that do not have an establishment or place of business in the PRC, or that have such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business, to the extent such dividends are derived from sources within the PRC.

Pursuant to an Arrangement Between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Incomes (“Double Tax Avoidance Arrangement”) and other applicable PRC laws, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have satisfied the relevant conditions and requirements under such Double Tax Avoidance Arrangement and other applicable laws, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives from a PRC resident enterprise may be reduced to 5%.

However, based on the Circular on Certain Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties (the “SAT Circular 81”) issued on February 20, 2009 by SAT, if the relevant PRC tax authorities determine, in their discretion, that a company benefits from such reduced income tax rate due to a structure or arrangement that is primarily tax-driven, such PRC tax authorities may adjust the preferential tax treatment.

According to the Circular on Several Questions regarding the “Beneficial Owner” in Tax Treaties, which was issued on February 3, 2018 by the SAT and took effect on April 1, 2018, when determining the applicant’s status of the “beneficial owner” regarding tax treatments in connection with dividends, interests or royalties in the tax treaties, several factors, including without limitation, whether the applicant is obligated to pay more than 50% of his or her income in twelve months to residents in third country or region, whether the business operated by the applicant constitutes the actual business activities, and whether the counterparty country or region to the tax treaties does not levy any tax or grant tax exemption on relevant incomes or levy tax at an extremely low rate, will be taken into account, and it will be analyzed according to the actual circumstances of the specific cases.

This circular further provides that applicants who intend to prove his or her status of the “beneficial owner” shall submit the relevant documents to the relevant tax bureau according to the Announcement on Issuing the Measures for the Administration of Non-Resident Taxpayers’ Enjoyment of the Treatment under Tax Agreements.

We have not commenced the application process for a Hong Kong tax resident certificate from the relevant Hong Kong tax authority, and there is no assurance that we will be granted such a Hong Kong tax resident certificate.

We have not filed required forms or materials with the relevant PRC tax authorities to prove that we should enjoy the 5% PRC withholding tax rate.

PRC Laws and Regulations on Employment and Social Welfare

Labor Law of the PRC

Pursuant to the Labor Law of the PRC, which was promulgated by the Standing Committee of the NPC on July 5, 1994 with an effective date of January 1, 1995 and was last amended on August 27, 2009 and the Labor Contract Law of the PRC, which was promulgated on June 29, 2007, became effective on January 1, 2008 and was last amended on December 28, 2012, with the amendments coming into effect on July 1, 2013, enterprises and institutions shall ensure the safety and hygiene of a workplace, strictly comply with applicable rules and standards on workplace safety and hygiene in China, and educate employees on such rules and standards.

Furthermore, employers and employees shall enter into written employment contracts to establish their employment relationships.

Employers are required to inform their employees about their job responsibilities, working conditions, occupational hazards, remuneration and other matters with which the employees may be concerned.

Employers shall pay remuneration to employees on time and in full accordance with the commitments set forth in their employment contracts and with the relevant PRC laws and regulations.

We have entered into written employment contracts with all the employees and performed their obligations under the relevant PRC laws and regulations.

Social Insurance and Housing Fund

Pursuant to the Social Insurance Law of the PRC, which was promulgated by the Standing Committee of the NPC on October 28, 2010 and became effective on July 1, 2011, employers in the PRC shall provide their employees with welfare schemes covering basic pension insurance, basic medical insurance, unemployment insurance, maternity insurance, and occupational injury insurance.

We have been complying with local regulations regarding social security and employee insurance.

According to the Interim Regulations on the Collection and Payment of Social Insurance Premiums, the Regulations on Work Injury Insurance, the Regulations on Unemployment Insurance and the Trial Measures on Employee Maternity Insurance of Enterprises, enterprises in the PRC shall provide benefit plans for their employees, which include basic pension insurance, unemployment insurance, maternity insurance, work injury insurance and basic medical insurance.

An enterprise must provide social insurance by processing social insurance registration with local social insurance agencies, and shall pay or withhold relevant social insurance premiums for or on behalf of employees.

The Law on Social Insurance of the PRC, which was promulgated by the SCNPC on October 28, 2010, became effective on July 1, 2011, and was most recently updated on December 29, 2018, has consolidated pertinent provisions for basic pension insurance, unemployment insurance, maternity insurance, work injury insurance and basic medical insurance, and has elaborated in detail the legal obligations and liabilities of employers who do not comply with relevant laws and regulations on social insurance.

Without force majeure reasons, employers must not suspend or reduce their payment of social insurance for employees, otherwise, competent governmental authorities will have the power to enforce employers to pay up social insurance within a prescribed time limit, and a fine of 0.05% of the unpaid social insurance can be charged on the part of the employers per day commencing from the first day of default.

Provided that the employers still fail to make the payment within the prescribed time limit, a fine of over one time and up to three times of the unpaid sum of social insurance can be charged.

According to the Regulations on the Administration of Housing Provident Fund, which was promulgated by the State Counsel and became effective on April 3, 1999, and was amended on March 24, 2002 and was partially revised on March 24, 2019 by Decision of the State Council on Revising Some Administrative Regulations (Decree No.

710 of the State Council), housing provident fund contributions by an individual employee and housing provident fund contributions by his or her employer shall belong to the individual employee.

Registration by PRC companies at the applicable housing provident fund management center is compulsory and a special housing provident fund account for each of the employees shall be opened at an entrusted bank.

The employer shall timely pay up and deposit housing provident fund contributions in full amount and late or insufficient payments shall be prohibited.

The employer shall process housing provident fund payment and deposit registrations with the housing provident fund administration center.

Under the circumstances where financial difficulties do exist due to which an employer is unable to pay or pay up housing provident funds, permission of labor union of the employer and approval of the local housing provident funds commission must first be obtained before the employer can suspend or reduce their payment of housing provident funds.

With respect to companies who violate the above regulations and fail to process housing provident fund payment and deposit registrations or open housing provident fund accounts for their employees, such companies shall be ordered by the housing provident fund administration center to complete such procedures within a designated period.

We are also eligible for receiving tax refund according

to certain favorable government policies starting from 2021.

Withholding Tax

Enterprise Income Tax Law states that since January 1, 2008, an income tax rate of 10% will normally be applicable to dividends declared

to non-PRC resident investors that do not have an establishment or place of business in the PRC, or that have such establishment or place

of business but the relevant income is not effectively connected with the establishment or place of business, to the extent such dividends

are derived from sources within the PRC.

to an Arrangement Between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation

and the Prevention of Fiscal Evasion with Respect to Taxes on Incomes (“Double Tax Avoidance Arrangement”) and other applicable

PRC laws, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have satisfied the relevant conditions

and requirements under such Double Tax Avoidance Arrangement and other applicable laws, the 10% withholding tax on the dividends the

Hong Kong resident enterprise receives from a PRC resident enterprise may be reduced to 5%.

However, based on the Circular on Certain

Issues with Respect to the Enforcement of Dividend Provisions in Tax Treaties (the “SAT Circular 81”) issued on February

20, 2009 by SAT, if the relevant PRC tax authorities determine, in their discretion, that a company benefits from such reduced income

tax rate due to a structure or arrangement that is primarily tax-driven, such PRC tax authorities may adjust the preferential tax treatment.

According to the Circular on Several Questions regarding the “Beneficial Owner” in Tax Treaties, which was issued on February

3, 2018 by the SAT and took effect on April 1, 2018, when determining the applicant’s status of the “beneficial owner”

regarding tax treatments in connection with dividends, interests or royalties in the tax treaties, several factors, including without

limitation, whether the applicant is obligated to pay more than 50% of his or her income in twelve months to residents in third country

or region, whether the business operated by the applicant constitutes the actual business activities, and whether the counterparty country

or region to the tax treaties does not levy any tax or grant tax exemption on relevant incomes or levy tax at an extremely low rate,

will be taken into account, and it will be analyzed according to the actual circumstances of the specific cases.

This circular further

provides that applicants who intend to prove his or her status of the “beneficial owner” shall submit the relevant documents

to the relevant tax bureau according to the Announcement on Issuing the Measures for the Administration of Non-Resident Taxpayers’

Enjoyment of the Treatment under Tax Agreements.

have not commenced the application process for a Hong Kong tax resident certificate from the relevant Hong Kong tax authority, and there

is no assurance that we will be granted such a Hong Kong tax resident certificate.

We have not filed required forms or materials with

the relevant PRC tax authorities to prove that we should enjoy the 5% PRC withholding tax rate.

Laws and Regulations on Employment and Social Welfare

Law of the PRC

to the Labor Law of the PRC, which was promulgated by the Standing Committee of the NPC on July 5, 1994 with an effective date of January

1, 1995 and was last amended on August 27, 2009 and the Labor Contract Law of the PRC, which was promulgated on June 29, 2007, became

effective on January 1, 2008 and was last amended on December 28, 2012, with the amendments coming into effect on July 1, 2013, enterprises

and institutions shall ensure the safety and hygiene of a workplace, strictly comply with applicable rules and standards on workplace

safety and hygiene in China, and educate employees on such rules and standards.

Furthermore, employers and employees shall enter into

written employment contracts to establish their employment relationships.

Employers are required to inform their employees about their

job responsibilities, working conditions, occupational hazards, remuneration and other matters with which the employees may be concerned.

Employers shall pay remuneration to employees on time and in full accordance with the commitments set forth in their employment contracts

and with the relevant PRC laws and regulations.

We have entered into written employment contracts with all the employees and performed

their obligations under the relevant PRC laws and regulations.

Insurance and Housing Fund

to the Social Insurance Law of the PRC, which was promulgated by the Standing Committee of the NPC on October 28, 2010 and became effective

on July 1, 2011, employers in the PRC shall provide their employees with welfare schemes covering basic pension insurance, basic medical

insurance, unemployment insurance, maternity insurance, and occupational injury insurance.

We have been complying with local regulations

regarding social security and employee insurance.

to the Interim Regulations on the Collection and Payment of Social Insurance Premiums, the Regulations on Work Injury Insurance, the

Regulations on Unemployment Insurance and the Trial Measures on Employee Maternity Insurance of Enterprises, enterprises in the PRC shall

provide benefit plans for their employees, which include basic pension insurance, unemployment insurance, maternity insurance, work injury

insurance and basic medical insurance.

An enterprise must provide social insurance by processing social insurance registration with local

social insurance agencies, and shall pay or withhold relevant social insurance premiums for or on behalf of employees.

The Law on Social

Insurance of the PRC, which was promulgated by the SCNPC on October 28, 2010, became effective on July 1, 2011, and was most recently

updated on December 29, 2018, has consolidated pertinent provisions for basic pension insurance, unemployment insurance, maternity insurance,

work injury insurance and basic medical insurance, and has elaborated in detail the legal obligations and liabilities of employers who

do not comply with relevant laws and regulations on social insurance.

Without force majeure reasons, employers must not suspend or reduce

their payment of social insurance for employees, otherwise, competent governmental authorities will have the power to enforce employers

to pay up social insurance within a prescribed time limit, and a fine of 0.05% of the unpaid social insurance can be charged on the part

of the employers per day commencing from the first day of default.

Provided that the employers still fail to make the payment within

the prescribed time limit, a fine of over one time and up to three times of the unpaid sum of social insurance can be charged.

to the Regulations on the Administration of Housing Provident Fund, which was promulgated by the State Counsel and became effective on

April 3, 1999, and was amended on March 24, 2002 and was partially revised on March 24, 2019 by Decision of the State Council on Revising

Some Administrative Regulations (Decree No.

710 of the State Council), housing provident fund contributions by an individual employee

and housing provident fund contributions by his or her employer shall belong to the individual employee.

Registration by PRC companies

at the applicable housing provident fund management center is compulsory and a special housing provident fund account for each of the

employees shall be opened at an entrusted bank.

employer shall timely pay up and deposit housing provident fund contributions in full amount and late or insufficient payments shall

be prohibited.

The employer shall process housing provident fund payment and deposit registrations with the housing provident fund administration

Under the circumstances where financial difficulties do exist due to which an employer is unable to pay or pay up housing provident

funds, permission of labor union of the employer and approval of the local housing provident funds commission must first be obtained

before the employer can suspend or reduce their payment of housing provident funds.

With respect to companies who violate the above regulations

and fail to process housing provident fund payment and deposit registrations or open housing provident fund accounts for their employees,

such companies shall be ordered by the housing provident fund administration center to complete such procedures within a designated period.

Those who fail to process their registrations within the designated period shall be subject to a fine ranging from RMB10,000 to RMB50,000.

When companies breach these regulations and fail to pay up housing provident fund contributions in full amount as due, the housing provident fund administration center shall order such companies to pay up within a designated period, and may further apply to the People's Court for mandatory enforcement against those who still fail to comply after the expiry of such period.

Our PRC subsidiaries are in compliance with PRC’s social insurance and housing fund regulations.

Regulations Related to our Business Operations in Hong Kong

Business registration requirement

The Business Registration Ordinance (Chapter 310 of the Laws of Hong Kong) requires every person carrying on any business to make an application to the Commissioner of Inland Revenue in the prescribed manner for the registration of that business.

The Commissioner of Inland Revenue must register each business for which a business registration application is made and as soon as practicable after the prescribed business registration fee and levy are paid and issue a business registration certificate or branch registration certificate for the relevant business or the relevant branch, as the case may be.

The Company has applied and received business registration certificate in HK and is in compliance with such regulations.

Regulations related to Hong Kong Taxation

Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong)

Under the Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong), where an employer commences to employ in Hong Kong an individual who is or is likely to be chargeable to tax, or any married person, the employer shall give a written notice to the Commissioner of Inland Revenue not later than three months after the date of commencement of such employment.

Where an employer ceases or is about to cease to employ in Hong Kong an individual who is or is likely to be chargeable to tax, or any married person, the employer shall give a written notice to the Commissioner of Inland Revenue not later than one month before such individual ceases to be employed in Hong Kong.

Capital gains tax

No tax is imposed in Hong Kong in respect of capital gains from the sale of shares.

Trading gains from the sale of shares by persons carrying on a trade, profession or business in Hong Kong, where such gains are derived from or arise in Hong Kong, will be subject to Hong Kong profits tax which is imposed at the rates of 8.25% on assessable profits up to HKD 2,000,000 and 16.5% on any part of assessable profits over HKD 2,000,000 on corporations from the year of assessment commencing on or after 1 April 2018.

Certain categories of taxpayers (for example, financial institutions, insurance companies and securities dealers) are likely to be regarded as deriving trading gains rather than capital gains unless these taxpayers can prove that the investment securities are held for long-term investment purposes.

Stamp Duty Ordinance (Chapter 117 of the Laws of Hong Kong)

Under the Stamp Duty Ordinance (Chapter 117 of the Laws of Hong Kong), the Hong Kong stamp duty currently charged at the ad valorem rate of 0.1% on the higher of the consideration for or the market value of the shares, will be payable by the purchaser on every purchase and by the seller on every sale of Hong Kong shares (in other words, a total of 0.2% is currently payable on a typical sale and purchase transaction of Hong Kong shares).

In addition, a fixed duty of HKD 5 is currently payable on any instrument of transfer of Hong Kong shares.

Where one of the parties is a resident outside Hong Kong and does not pay the ad valorem duty due by it, the duty not paid will be assessed on the instrument of transfer (if any) and will be payable by the transferee.

If no stamp duty is paid on or before the due date, a penalty of up to ten times the duty payable may be imposed.

As of the date hereof, the Company is in compliance with the regulations regarding Hong Kong taxation.

Not applicable as we are a smaller reporting company.

When companies breach these regulations and fail to pay up housing provident fund contributions in full amount as due, the housing provident

fund administration center shall order such companies to pay up within a designated period, and may further apply to the People's Court

for mandatory enforcement against those who still fail to comply after the expiry of such period.

PRC subsidiary is in compliance with PRC’s social insurance and housing fund regulations.

Related to our Business Operations in Hong Kong

registration requirement

Business Registration Ordinance (Chapter 310 of the Laws of Hong Kong) requires every person carrying on any business to make an application

to the Commissioner of Inland Revenue in the prescribed manner for the registration of that business.

The Commissioner of Inland Revenue

must register each business for which a business registration application is made and as soon as practicable after the prescribed business

registration fee and levy are paid and issue a business registration certificate or branch registration certificate for the relevant

business or the relevant branch, as the case may be.

The Company has applied and received business registration certificate in HK and

is in compliance with such regulations.

related to Hong Kong Taxation

Revenue Ordinance (Chapter 112 of the Laws of Hong Kong)

the Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong), where an employer commences to employ in Hong Kong an individual

who is or is likely to be chargeable to tax, or any married person, the employer shall give a written notice to the Commissioner of Inland

Revenue not later than three months after the date of commencement of such employment.

Where an employer ceases or is about to cease

to employ in Hong Kong an individual who is or is likely to be chargeable to tax, or any married person, the employer shall give a written

notice to the Commissioner of Inland Revenue not later than one month before such individual ceases to be employed in Hong Kong.

tax is imposed in Hong Kong in respect of capital gains from the sale of shares.

gains from the sale of shares by persons carrying on a trade, profession or business in Hong Kong, where such gains are derived from

or arise in Hong Kong, will be subject to Hong Kong profits tax which is imposed at the rates of 8.25% on assessable profits up to HKD

2,000,000 and 16.5% on any part of assessable profits over HKD 2,000,000 on corporations from the year of assessment commencing on or

after 1 April 2018.

Certain categories of taxpayers (for example, financial institutions, insurance companies and securities dealers)

are likely to be regarded as deriving trading gains rather than capital gains unless these taxpayers can prove that the investment securities

are held for long-term investment purposes.

Duty Ordinance (Chapter 117 of the Laws of Hong Kong)

the Stamp Duty Ordinance (Chapter 117 of the Laws of Hong Kong), the Hong Kong stamp duty currently charged at the ad valorem rate of

0.1% on the higher of the consideration for or the market value of the shares, will be payable by the purchaser on every purchase and

by the seller on every sale of Hong Kong shares (in other words, a total of 0.2% is currently payable on a typical sale and purchase

transaction of Hong Kong shares).

In addition, a fixed duty of HKD 5 is currently payable on any instrument of transfer of Hong Kong

Where one of the parties is a resident outside Hong Kong and does not pay the ad valorem duty due by it, the duty not paid will

be assessed on the instrument of transfer (if any) and will be payable by the transferee.

If no stamp duty is paid on or before the due

date, a penalty of up to ten times the duty payable may be imposed.

of the date hereof, the Company is in compliance with the regulations regarding Hong Kong taxation.

applicable as we are a smaller reporting company.

UNRESOLVED STAFF COMMENTS

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business